After all the damage the pandemic has caused the US economy, the Social Security Administration (SSA) has officially confirmed that there is a record-breaking cost of living adjustment (COLA) to take effect from January 2022 next year.
Therefore, it is estimated that about 70 million people, who will receive benefits in 2022, will see their monthly aid increase by 5.9 percent. This increase is the largest annual COLA since 1982, only came close in 2009 with an adjustment of 5.8.
The reason behind the massive adjustment needed is simple: the pandemic has caused consumer prices rise, with rising energy prices as well as water, food, housing and healthcare. The higher the consumption costs, the higher the money needed to cover the costs.
BREAKING: US inflation rose 6.2% in October from a year ago. That is the highest inflation in 31 years.
Inflation rose 0.9% in October alone, a much larger increase than 0.4% in September and 0.3% in August.
Prices for food, energy, shelter, used cars and new cars are rising.
— Heather Long (@byHeatherLong) Nov 10, 2021
Why is COLA important?
According to the SSA, COLA was first deployed to ensure that the “purchasing power of social security and supplementary income provisions (SSI) is not eroded by inflationmeaning that COLA’s goal is to make all the adjustments necessary to ensure that the benefits beneficiaries receive go hand in hand with the ups and downs of the economy. In this way inflation does not devalue aid, but the COLA is never negative.
The consumer price index for urban wage earners and white-collar workers (CPI-W) is controlled from the third quarter (July to September) from the last year to the third quarter of the current year. In this period economically fluctuations happen, consumer prices can rise, in which case COLA rises, it can fall or stay the same, and no COLA is needed. This means that actual Social Security benefits move with the economy accordingly, but recipients will not lose their purchasing power and see their benefits diminish.
8 million disabled people will see their SSI increase
In addition to the main group of beneficiaries, retirees, another large group will benefit from the 5.9 percent increase, the disabled. The SSA estimates that approximately 8 million people are claiming disability benefits and will therefore see their assistance increase from January 2022.
People with general disabilities receive an additional $76 each month ranging from $1,282 dollars per month to $1,358. Further, disabled workers who are married and have one or more children see their income increase by $133 each month, shifting from $2,250 to $2,383. note that the additional amount each group receives varies according to the 5.9 percent of the initial eligible amount.
SS Disability Benefits
|Group||Benefits in 2021||Benefits in 2022|
|Disabled employee, spouse and one or more children||$2,250.00||$2,383.00|
|All disabled employees||$1,282.00||$1,358.00|