Every year the social security authority adjusts the amount it pays to beneficiaries based on the year-over-year increase in the consumer price index for urban wage earners and white-collar workers (CPI-W) from the third quarter. Wednesday morning the US Bureau of Labor Statistics released September data with an increase of 5.9 percent.
Shortly after this press release, the Social Security Administration announced a 5.9 percent increase in the cost of living (COLA) for 2022. What does this mean for the beneficiaries?
A 5.9 percent increase in COLA 2022 means an average of $ 92 more per month in benefits
The monthly average increase for all retired workers will increase by $ 92 in 2022. increase from $ 1,565 to $ 1,657. That’s more than four times the increase for 2021 when it was $ 20. The maximum monthly payout amount in 2022 for those who have reached full retirement age (FRA) will increase by $ 197. Increase to $ 3,345 from $ 3,148 in 2021.
For those receiving disability insurance, the threshold is increased by US $ 40 for non-blind beneficiaries and by US $ 70 for blind beneficiaries. This equates to $ 1,350 or $ 2,260 per month. Those who receive trial work benefits can receive an additional $ 30 per month for a total of $ 970.
The federal standard Supplemental Support Income (SSI) payments will rise to $ 841 per month for individuals, an increase of $ 47. For couples, they could get an additional $ 70 per month for a total of $ 1,261 in 2022.
The social security authority will send the beneficiaries a letter from the beginning of December stating their new level of benefits. Most beneficiaries who have an online account through my social security account can, however, see their COLA notification there. For beneficiaries who receive Medicare, The Social Security Administration will not be able to calculate the new benefit until after the Medicare premium amounts are announced for 2022. For a full overview of the changes for 2022 the social security authority provides a leaflet.
How was the COLA 2022 calculated?
The increase in the annual COLA is calculated using the VPI-W, however, the Social Security Administration only uses the third quarter of each year to calculate COLA. By comparing the previous year’s changes in the three months in the third quarter, July, August and September, the agency formulates the amount of the increase in performance for the next year.
The COLA is applied to payments made to more than 64 million social security recipients as of January 2022. However, the first recipients of payments based on COLA 2022 will be the around 8 million supplementary support income beneficiaries whose payments will begin on December 30, 2021. The social security administration reminds beneficiaries that some beneficiaries receive both social security and supplementary support income.