Public Benefits & Tax Updates for the New Year
How have the benefit programs that impact older adults changed their payouts for 2024? This article gives you a quick recap of the major changes to the public benefit programs our clients interact with most and the tax updates that imact our clients the most.
Social Security Benefits Increase in 2024
More than 71 million Americans will see a 3.2% increase in their Social Security benefits and Supplemental Security Income (SSI) payments in 2024. On average, Social Security retirement benefits will increase by more than $50 per month starting in January.
Federal benefit rates increase when the cost-of-living rises, as measured by the Department of Labor’s Consumer Price Index (CPI-W). The CPI-W rises when inflation increases, leading to a higher cost-of-living. This change means prices for goods and services, on average, are higher. The cost-of-living adjustment (COLA) helps to offset these costs.
If you receive Social Security benefits, you should have already received your COLA notice. They were mailed throughout the month of December to retirement, survivors, and disability beneficiaries, SSI recipients, and representative payees. If you have misplaced your COLA letter and want to know your new benefit amount, you can securely obtain your Social Security COLA notice online using the Message Center in your personal account, which can be created through ssa.gov.
Read more about the 2024 COLA here.
VA Aid & Attendance Benefits Increased December 1
Benefits related to VA Pension with an Aid & Attendance allowance increased on December 1, 2023. The VA Pension with Aid & Attendance can provide up to $2,727 per month to a single veteran, $1,478 per month to a surviving spouse, and $3,649 to two veterans married to each other. Also, a healthy veteran with a sick spouse can be eligible for up to $1,806 per month.
VETERAN WITH A DEPENDENT:
Basic Improved Pension - $1,806 monthly | $21,674 annually
Housebound - $2,112 monthly | $25,348 annually
Aid and Attendance - $2,727 monthly | $32,729 annually
SINGLE VETERAN:
Basic Improved Pension - $1,379 | $16,551
Housebound - $1,685 | $20,226
Aid and Attendance - $2,300 | $27,609
SURVIVING SPOUSE:
Basic Improved Pension - $925 | $11,102
Housebound - $1,130 | $13,568
Aid and Attendance - $1,478 | $17,743
HEALTHY VETERAN WITH ILL SPOUSE: $1,806 monthly | $21,674 annually
MARRIED VETERANS (if both are in need of A&A): $3,649 monthly | $43,791 annually
FOR EACH ADDITIONAL DEPENDENT: $235 monthly | $2,831 annually
This section of the Kimbrough Law website explains more about these benefits.
Federal Estate Tax Limit & Gift Tax Exclusion Limit Increasing in 2024
Under 2023 tax law, when you die, you can leave up to $12.92 million (less any amounts previously given in excess of the annual exclusions) to your relatives or friends free of any federal estate tax. The table below summarizes the new exclusion amounts for each type of tax.
Year | Estate Tax Lifetime Exemption | Gift Tax & GST Tax Annual Exlusion per Donee |
Previous Year (2023) | $12,920,000 | $17,000 |
New (2024) | $13,610,000 | $18,000 |
This article on the Kimbrough Law blog explains more.
More Medicare Prescription Drug Help for Beneficiaries in 2024 – Including Out-of-Pocket Cap
The Inflation Reduction Act of 2022 (IRA), signed into law by President Biden on August 16, 2023, is already providing cost-savings for Medicare beneficiaries in 2023, including a monthly cap of $35 for covered insulin and free vaccines for certain conditions.
Additional changes went into effect in January 2024. Here's a recap of the changes as listed on the www.medicare.gov website:
If you have drug costs high enough to reach the catastrophic coverage phase in your Medicare drug coverage, you won’t have to pay a copayment or coinsurance, starting in 2024. Once your out-of-pocket spending reaches $8,000 (including certain payments made by other people or entities, including Medicare’s Extra Help program, on your behalf), you’ll automatically get “catastrophic coverage.” This means you won’t have to pay a copayment or coinsurance for covered Part D drugs for the rest of the calendar year.
Extra Help affording prescription drug coverage (the Part D Low-Income Subsidy (LIS) program) will expand to cover more drug costs for people with limited resources who earn less than 150% of the federal poverty level, starting in 2024. People who qualify for Extra Help generally will pay no more than $4.50 for each generic drug and $11.20 for each brand-name drug.
In 2025, the annual Part D out-of-pocket cap will be lowered to $2,000. Individuals will also have the option to pay out-of-pocket costs in monthly amounts over the plan year, instead of when they happen.
In addition, the drug price negotiation program created by the Inflation Reduction Act allows Medicare to use its bargaining power to negotiate the prices of prescription drugs for the first time. In August 2023, CMS announced the first 10 drugs that have been selected for negotiation. In October, the drug companies that manufacture all 10 of the selected drugs chose to participate in the program. Unfortunately, drug manufacturers have filed multiple lawsuits around the country alleging various constitutional claims.
Questions about public benefits that impact you? Kimbrough Law can help. Give us a call at 706.850.6910.
