Midwest Disability, P.A. Midwest Disability, P.A. Midwest Disability, P.A.

Social Security Recipients Get Benefit Increase

In October 2011, the Social Security Administration (SSA) announced that Social Security benefit recipients will receive a cost of living adjustment (COLA) for the first time since 2009. Those who receive Social Security disability benefits should know by how much their benefits will increase and how the SSA calculated the increase.

Increase in Benefit Payments

The SSA will increase the benefits payments to those receiving Social Security and Supplemental Security Income (SSI) by 3.6 percent. The increase goes into effect in January 2012 for Social Security recipients and December 30, 2011 for SSI recipients.

The average Social Security Disability Insurance (SSDI) monthly payment was $1,070.40 in September 2011, according to the SSA. A 3.6 percent increase would mean about $38.50 per month, or approximately $462 per year.

However, increases in Medicare premium rates are also scheduled to go into effect in 2012, which may offset the benefit increase completely for some recipients.

Cost of Living Adjustment

Since the 1972 Social Security Amendments went into effect in 1975, the SSA has periodically granted a cost of living adjustment (COLA) to benefit recipients, wherein the SSA adjusts the amount of benefits it pays out in order to ensure that inflation does not reduce the purchasing power of Social Security benefits.

Inflation makes prices for necessities, such as food and clothing, increase. The SSA needs to give a COLA because, if the amount of benefit money people received stayed the same, they would not be able to afford to buy as much.

Calculating Cost of Living Increase

The SSA calculates the COLA by comparing the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the previous year, as determined by the Bureau of Labor Statistics (BLS), to the third quarter of the current year.

The reason the 2012 increase in benefits is the first since 2009 is that prices did not rise above the levels they were at in the third quarter of 2008 until the third quarter of 2011.

An increase in monthly benefits will help recipients keep up with rising prices and allow them to afford the necessities of life even though they cannot work. If you are disabled and cannot work, contact an experienced Social Security attorney who can help you get the benefits you need.

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Coon Rapids, MN 55448
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