WASHINGTON — Nearly 60 million Social Security recipients will get benefit increases averaging $20 a month in January, the third straight year of historically small increases.
The 1.7 percent cost-of-living adjustment will also raise government benefits for millions of disabled veterans, federal retirees and people drawing disability payments.
Social Security is financed by a 12.4 percent payroll tax on the first $117,000 of a worker’s wages — half is paid by the worker and half is paid by the employer. Next year, the wage cap will increase to $118,500, the Social Security Administration said.
Congress enacted automatic increases in payments to beneficiaries in 1975, when inflation was high and there was a lot of pressure to regularly raise benefits.
For the first 35 years, the cost-of-living adjustment was less than 2 percent only three times. Next year, it will be less than 2 percent for the third straight year, and the fifth time in six years.
This year’s increase was 1.5 percent; the year before, it was 1.7 percent.