WASHINGTON (AP) – Social Security checks for nearly 49 million retirees are going up by 3.3 percent next year – an average increase of $33 per month though rising health care costs will take a bite out of the gain.

The monthly benefit for the typical retiree will rise to $1,044 from an average of $1,011 this year.

The cost of living adjustment announced Wednesday by the Social Security Administration will go to more than 53 million people. Nearly 49 million receive Social Security benefits and the rest Supplemental Security Income payments aimed at the poor.

The 3.3 percent increase compares with a 4.1 percent benefit rise in for 2006, which had been the biggest increase in 15 years.

Benefit payments, which have been tied to inflation since 1975, surged by double-digit amounts in the high-inflation years of 1980 and 1981 but increases have been more moderate in recent years as the Federal Reserve has had more success keeping inflation under control.

The COLA amount is based on the change in the Consumer Price Index from the July-September quarter of this year compared with the same quarter in 2005.

Last year, prices surged in September, reflecting a big spike in energy costs after Hurricane Katrina.

But this year, energy prices, which initially leaped because of rising Mideast tensions, have been falling since late summer. Those declines helped pull consumer prices down by 0.5 percent in September, the biggest drop in 10 months.

Falling energy prices should help retirees deal with winter heating bills, which for the first time in a number of years are expected to be lower this winter.

The average retired couple, both receiving Social Security benefits, will see their monthly check go from $1,658 to $1,713.

The standard SSI payment will go from $603 to $623 per month for an individual, and from $904 to $934 for a couple.

The average monthly check for a disabled worker will rise from $947 to $979.

Eleven million taxpayers will pay higher taxes next year because the maximum amount of Social Security earnings subject to the payroll tax will rise from $94,200 to $97,500. In all, an estimated 163 million workers will pay Social Security taxes in 2007.

The $33 per month average monthly increase for Social Security retirees in 2007 compares with a $39 rise for 2006.

Part of the 2007 gain will be eaten up by a $5 increase in the payments retirees must make for Medicare Part B insurance, which pays for their doctors’ visits and other outpatient care.

The increase will push the monthly premium for most Medicare recipients to $93.50, a rise of 5.6 percent. But that is down from the double-digit increases over the past three years when health care costs far outpaced overall inflation.

About 1.5 million Medicare beneficiaries, those making more than $80,000 annually, will pay an additional $12.50 to $68.60 per month above the $93.50 premium. As part of the 2003 drug benefit law, higher-income Medicare patients for the first time will face a larger premium based on a sliding scale.

“Seniors are being asked to foot more and more of the bill while the larger issue of controlling runaway health care costs languishes largely ignored in Washington,” said Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare.

The administration has said the monthly premium for prescription drug coverage, known as Part D, should average $24 next year, the same as this year, a forecast Democrats contend is misleading. They estimate that the bulk of Medicare recipients are in drug plans which will increase on average by about $5 per month.

Still, economists said most seniors will be facing better prospects in terms of inflation in 2007 than last year, when the price of natural gas and home heating oil were soaring.

Advocates for the elderly said that the cost of living adjustment was a critical safety net for the nearly one-third of retirees who rely on Social Security for 90 percent or more of their income.

“The fundamental value of Social Security is becoming even more critical as America’s traditional pension system declines,” said David Sloane, government relations director for AARP, which represents people 50 and older. “The COLA is critical for maintaining purchasing power over time.”

President Bush, who pledged to make overhaul of Social Security and Medicare top priorities in his second term, has failed to make headway in Congress with a plan to offer private savings accounts for younger workers.

Democrats said Wednesday Bush will have to drop the idea of partially privatizing Social Security if he wants to get any legislation passed in his last two years in office.

“Social Security’s guarantee continues to be threatened by the president and his congressional allies, who believe in a privatization scheme that would over time eliminate Social Security’s guaranteed benefit for most people,” said Rep. Sander Levin, D-Mich.

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On the Net:

Social Security Administration: http://www.socialsecurity.gov

AP-ES-10-18-06 1450EDT