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Social Security Announces Small Cost of Living Increase

Social Security disability recipients will see their smallest cost of living increase in four years come 2021.

In November, the Social Security Administration announced that it was setting its annual cost of living adjustment to benefits at 1.3 percent.

For the average Social Security Disability Insurance recipient getting $1,236 a month, that means a monthly benefit increase of only about $16. That also doesn't account for the annual increase in Medicare benefits, which essentially eats up that extra money.

Supplemental Security Income benefits, which were capped at $783 per month in 2020 will increase by only $9 to $794.

Part of the reason for the low increase in benefits is due to how COLA is calculated by Social Security and the ongoing economic impact of the Covid-19 pandemic. The agency looks at the third quarter Consumer Price Index for Urban Wage Earners and Clerical Workers to determine how much benefits should increase the following year.

One of the main components of CPI-W is fuel prices, which have been hit hard by the increased numbers of workers who have been staying home most of the year.

As frustrating as the small cost of living adjustment is sure to be for those already receiving benefits, there is some good news for those with pending applications.

Social Security has also announced that it is raising its monthly substantial gainful activity (SGA) amount quite a bit from $1,260 to $1,310 in 2021.

SGA is the amount that non-blind individuals can make from working each month while still qualifying for benefits, so it should help more disabled part-time workers be approved for disability insurance next year.

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In Minnesota, we handle Social Security Disability Insurance (SSDI) claims. Throughout the nation, we handle SSDI applications and appeals for people from Ohio to Kansas, North Dakota to Texas and everywhere in between.


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Coon Rapids, MN 55448

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