In 1972, Congress passed legislation to provide automatic increases linked to a rise in consumer prices. Recipients would no longer have to wait for Congress to take action to receive an increase. The first automatic increases to Social Security benefits took effect in 1975. After 1982, cost of living adjustments (“COLAs”) were effective for December of each year and received by beneficiaries in January. Legislation enacted in 1973 provides for cost-of-living adjustments or COLAs. With COLAs, Social Security and Supplemental Security Income (SSI) benefits keep pace with inflation.
Last week the Social Security Administration (SSA) announced that the nearly 70 million recipients will see a COLA of 5.9% in 2022, the largest increase since 1982. Listed below are some of the notable changes that will take effect in January 2022 for Social Security recipients -
- The average individual retired Social Security beneficiary is expected to see a monthly benefit jump from $1,565 to $1,657, an increase of roughly $92 per month or $1,104 for the year.
- As a result of the COLA, the maximum monthly benefit a single recipient can get at full retirement age will also grow. That benefit will increase from $3,148 per month in 2021 to $3,345 per month in 2022.
- Disabled workers will also see a rise in their monthly benefit amount from $1,282 per month to $1,358 per month.
- The maximum SSDI monthly benefit for 2021 was $3,148. In 2022 the maximum SSDI monthly benefit will be $3,333.
- In 2022 it will take $1,510 to earn a single Social Security credit, up $40 from 2021.
- If you are under full retirement age and working while also receiving monthly Social Security benefits, in 2022 you will be able to earn up to $19,560 ($1,630 per month) before the Social Security Administration deducts $1 from your benefits for every $2 you earn.
- Disability income thresholds (commonly referred to as “substantial gainful activity”) will also increase. In 2022, non-blind disabled workers will be allowed to earn up to $1,350 per month without their benefits being stopped, up from $1,310 a month this year. Disabled blind beneficiaries will be allowed to earn $2,260 per month in 2022 without their benefits being stopped. That's $70 a month higher than in 2021.
- Taxes on workers’ wages finance Social Security. Workers pay 2% of their earnings to fund the benefit (employers pay the same). Next year, the maximum amount of earnings subject to the Social Security tax will increase from $142,800 to $147,000.
- In 2022 SSA’s full retirement age will increase by 2 months from 66 years and 10 months for persons born in 1959 to 67 years for anyone born in 1960 or later. This will be the 12th and final increase to SSA’s full retirement age.
- Beneficiaries receiving Supplemental Security Income (SSI) will also see an increase in their monthly payment. SSI is a federal program that aids the aged, blind, and people with disabilities who have little or no income by providing them funds for food, clothing, and shelter. The individual amount grows by $47 a month, from $794 to $841. The amount for couples rises by $70, from $1,191 to $1,261.
The Social Security Administration has redesigned Social Security statements to include more information and be easier to read. The new Social Security statements provide personalized estimates of your future Social Security benefit at nine different potential claiming ages, as opposed to three ages on the previous statements. Your Social Security statement also contains information about your earnings history, taxes paid, Medicare eligibility, and disability and survivor's benefits. The statement can be viewed online via a my Social Security account and will be mailed to workers aged 60 and older who don't have a my Social Security account.
In addition to dealing with short-term disability benefits, long-term disability benefits, and health insurance denials, many of our clients are also trying to keep up with changes to their Social Security benefits. If you are concerned about how these changes may affect your own insurance benefits, please contact Kantor & Kantor for a no-cost consultation or use our online contact form.