The Social Security Administration (SSA) has announced that recipients of Social Security benefits will see a 5.9% increase in benefits in 2022. This represents the largest increase in Social Security since at least 2008. This increase in benefits will affect retirees collecting Social Security retirement benefits, as well as people collecting disability benefits through Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI).
What is the Increase in Social Security Benefits?
This increase in benefits will take place at the beginning of the new year, in January 2022. Anyone who receives benefits through the SSA, including all SSDI and SSI recipients, will see a commensurate increase in their payments. As a result, everyone should see about a 6% increase in the amount of money they receive from Social Security from now on.
Why Are Benefits Increasing?
The benefits are increasing as a result of something known as the Cost of Living Adjustment, also known as the COLA for short. The COLA is an automatic adjustment applied to Social Security every year, intended to increase benefits to match the increase in the cost of living. This allows Social Security benefits to continually increase without needing to go through Congress or administrative procedures to ensure benefits keep up with the cost of living.
What Determines the COLA?
The Cost of Living Adjustment, as the name suggests, is based on changes in the cost of living, as determined by something known as the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The CPI-W is calculated based on a number of factors, including the cost of goods and services, fees from utilities such as water and sewage services, as well as costs from excise taxes. The more the CPI-W goes up, the more the COLA goes up to match.
How Does This Affect SSDI and SSI Recipients?
In basic terms, this means that SSDI and SSI recipients should see an increase in the amount of money they receive from the SSA. These changes may help people surviving on disability benefits to pay for their expenses. Anyone who is looking to apply for SSDI or SSI benefits will see the increase, should they be approved. However, before you try to apply for Social Security disability benefits, you should speak to a lawyer with knowledge of Social Security law, who can give your application the best chances possible of being accepted.
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Yeah but Medicare will take most of the increase.