The Social Security Administration (SSA) released changes to its social security benefits and supplemental security income (SSI) programs. Announced each year in October, the changes are based on cost-of-living adjustments (COLA) to ensure benefits keep pace with inflation.
Social security benefits recipients should have seen these changes reflected in their monthly payments beginning in January (December 30, 2021, for recipients of supplemental security income). The announced changes affect monthly benefit amounts and taxable earning levels for social security and Medicare taxes. Other aspects of the program, such as SSI resource limits and tax rates, remain the same.
Here’s what recipients need to know for 2022. For detailed information on how these changes affect individual benefit payments, log on to your my Social Security account and check the message center, or look for the mailed COLA notice SSA sent in December.
2022 cost-of-living adjustments to social security benefits
The SSA first implemented COLA adjustments in 1975. Adjustments are tied to increases, if any, that occurred in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) between the third quarter of the prior year through the third quarter of the current year; in this case, changes in the CPI-W between October 2020 and September 2021.
The 2022 COLA is 5.9%, more than 4.5 times higher than the 1.3% COLA increase for 2021. With this increase, the SSA estimates that the average benefit paid to all retired beneficiaries for 2022 will be $1,675, or $2,753 to an aged couple (where both spouses receive benefits). The average monthly benefit for disabled workers increases to $1,358. Again, your my Social Security account or the SSA’s December COLA notice will have information on how the adjustments will affect individual payments.
The maximum earnings for social security taxes will also increase this year, from $142,800 in 2021 up to $147,000 in 2022.
The combined social security and Medicare tax rate remains unchanged at 7.65% for employees, or 15.3% for self-employed individuals.
Supplemental security income (SSI) increases for 2022
Monthly benefits for supplemental security income recipients will increase to $841 for individuals, or $1,261 for married couples, an increase of $47 and $70, respectively, over 2021 benefit amounts.
Resource limits for supplemental security income recipients will remain the same, at $2,000 for individuals and $3,000 for couples. Resources generally include cash, money held in bank accounts and stocks, the value of land and life insurance policies, vehicles, and any other tangible or intangible asset that could be converted to cash and used to pay for food or shelter.
There are, however, exceptions to what the SSA considers a resource. For example, the SSA excludes the value of one personal vehicle as well as your home’s value.
Visit the SSA website for more information on countable and non-countable resources.
Social security disability insurance (SSDI) increases for 2022
Several changes have also been made to the social security disability insurance (SSDI) program for 2022. Social Security Disability Insurance benefits are based on the recipient’s average lifetime earnings, so the information below is the SSA’s estimates of average benefit awards. Check your my Social Security account online or the SSA’s mailed COLA notice for specifics on individual benefits payment.
In 2022, the SSA estimates that the average SSDI payment will be $1,358; that amount increases to $2,383 for married disabled workers who have at least one child.
Also increasing for 2022 are limits on substantial gainful activity (SGA). Substantial gainful activity is the maximum amount SSDI recipients can earn while remaining eligible for benefits. In 2022, SSDI recipients can earn up to $1,350 per month (up to $2,260 if the recipient is blind) and still receive SSDI benefits. This is a $40 increase ($70 for recipients who are blind) from 2021 limits.
Social security disability insurance recipients participating in a Trial Work Period (TWP), which lets beneficiaries “trial” working for a short period to determine if they can return full-time, can now earn up to $970 a month – a $30 increase over 2021 limits – and remain eligible for SSDI benefits.
Visit the SSA Fact Sheet for more information on changes to the social security benefits program for 2022.
Fortunately expert organizations such as the Good Law Group are highly skilled and experienced in not only using Social Security laws when fighting your case, but also in taking account of rulings to help you exercise your rights whenever and wherever you have a problem. Call the Good Law Group for a complimentary case evaluation (847) 577-4476.