Record-Breaking COLA – January 2022

My name is Jessica. I am a Solutions Manager from Managed Outsource Solutions and I am here to talk to you about the record-breaking COLA introduced as of January 2022.

00:13 Cost-Of-Living Adjustment (COLA) Update 2022

The SSA (Social Security Administration) has announced a record-breaking 5.9% increase in social security retirement, social security disability (SSDI), and supplemental security income (SSI) benefits for 2022. This is the largest cost-of-living adjustment (COLA) hike since 1982. It is expected that 70% of Americans would benefit from this increase. Social security disability insurance benefits (SSDI) and Supplemental Security Income (SSI) provide economic support to millions of Americans unable to work and earn wages due to a disability or illness. The eligibility of the beneficiaries is determined based on comprehensive medical record review. The increased payments to Social Security Retirement and Disability beneficiaries will begin in January 2022, whereas that for SSI recipients has already commenced from December 30, 2021.

The exceptionally high COLA indicates that inflation rate is on the rise, which was triggered by the COVID-19 pandemic. This subsequently raised the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers), leading to the increased prices of goods and services like energy, water, food, health care, housing etc. COLA helps to cover these expenses by keeping in tandem the benefit rates and cost of living. It ensures that purchasing power is not eroded by inflation.

2021 was a year of surging inflation and the increase in price of everything from food to rent threw senior citizens and persons with disabilities into disarray. It was a struggle amid the rising inflation with a 1.3% cost-of-living adjustment last January, which was the least in recent history.

02:21 Vital COLA Information for 2022 as per SSA.gov

• 9% COLA made available to more than 64 million Social Security beneficiaries in January 2022.
• Increased payments for 8 million SSI beneficiaries started from December 30, 2021.
• The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $ 147,000.
• The earnings limit for workers who are younger than “full” retirement age will increase to $19,560.
• The earnings limit for people reaching their “full” retirement age in 2022 will increase to $ 51,960.
• There is no limit on earnings for workers who are “full” retirement age or older for the entire year.

03:22 Social Security COLA Increase Estimate

• The main beneficiaries are retired workers because among the 65 million beneficiaries, 47 million come under this category. Each retired worker will receive 92 dollars extra, bringing the total to 1,657 dollars per month.
• Next come the disabled workers that comprise 8 million, who will receive an extra 76 dollars per month. The average disabled worker will be receiving 1,358 dollars per month as of January 2022.
• The average widow’s or widower’s benefits will increase by $86, which translates to $1,553 per month. The Social Security checks will be sent according to the month of birth of the beneficiaries. The complete schedule of benefit payments in the year 2022 is available on the ssa.gov website.

The SSI monthly maximum increased from $794 per month in 2021 for an individual to a monthly amount of $841 in 2022; for a couple this has increased from $794 and $1,191 in 2021 to $1,261 per month. This increase will be available to more than 7.8 million Americans receiving SSI benefits. In states that pay a supplementary SSI payment, the payment amounts are higher.

As a provider of medical record review for social security disability attorneys, we keep abreast with such periodic updates posted by the SSA. The SSA adjusts social security payments each year to keep up with inflation as calculated by the CPI-W. The 5.9% COLA adjustment for the year 2022 is considerably more than 1.3% of 2021. Earlier COLA adjustments have ranged from zero in 2010, 2011, and 2016; to 5.8% in 2009; and 14.3% in 1980. The current COLA increase has come as good news in the midst of the COVID-19 pandemic and economic slowdown in the United States. Millions of Americans will receive a check for an amount greater than what they received in the year 2021. Beneficiaries can find out the benefit amount they will receive in 2022 by logging into their My Social Security Account.

Thank you for listening!

We hope you have a wonderful rest of the day!