The Social Security Administration has announced that beneficiaries of its retirement and disability programs will receive a cost of living adjustment (COLA) of 5.9% next year after inflation brought about by COVID woes.
This is the largest COLA in 39 years. In the past 10 years, the COLA has averaged just 1.65%, according to the Associated Press. The purpose of the COLA is to help beneficiaries deal with increasing prices for food, gas and other necessary goods and services.
One person interviewed by the AP retired about 10 years ago and has seen her cost of living jump this year. She is worried that her food costs will keep her from affording her medication. The COLA will help.
How will the COLA affect Social Security Disability recipients?
According to the Social Security Administration, the estimated average monthly Social Security benefit for a disabled worker will rise from $1,282 (2021) to $1,358 (2022).
However, the exact amount of increase you will see in your benefits depends on a couple of factors. First, it will depend on whether you receive Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI).
For example, the standard SSI payment for an individual will rise from $794 to $841 per month next year. If you are on SSDI, your total benefit depends on the income you received while you were working, although they will max out at $3,345 per month next year.
In addition to raising the monthly benefit, the COLA affects the income you can receive while still maintaining your benefits. For example, a non-blind person receiving Social Security Disability benefits can earn $1,350 per month after the COLA, up from $1,310. A blind beneficiary will be able to earn $2,260 per month in 2022.
The COLA also affects the amount beneficiaries can earn from work. Currently, it’s $940 per month. After next year’s COLA, that will rise to $970 per month. The COLA does not affect the $2,000 individual/$3,000 couple resource limit for SSD beneficiaries.
This COLA is pretty substantial, compared to previous years. It may not sound like a lot to some people, but the extra $76 per month for the average worker with a disabling condition will make it easier for many beneficiaries to make ends meet.