The Social Security Administration (SSA) recently announced, in an effort to combat the increasing inflation rate, that a significant cost-of-living adjustment (COLA) is likely by the end of 2022. The COLA will potentially be as high as 8%, which would mark the largest COLA adjustment since 1981 (when beneficiaries received an 11.2% adjustment). While the COLA adjustment is not official, if an increase is approved, it would take effect in December 2022 and the increased benefits would be paid out beginning in January 2023. SSA provided a 5.9% COLA adjustment in January 2022, the biggest increase since 1982, but a larger COLA adjustment may now be needed since the rate of inflation has far exceeded that 5.9% bump.
Most years when a COLA adjustment is approved, it averages 3.8%, but an adjustment closer to 8% is more likely by the end of 2022. Despite the possibility of a significant COLA adjustment, Medicare premiums continue to rise and may eat into some of the increased benefits received from a potential COLA adjustment. An official determination on COLA adjustments for 2022 will likely not be made until later this year. Henson Fuerst will provide updated information once SSA clarifies its intention regarding a COLA adjustment for 2022. If you have any questions about the impact of a COLA adjustment on your Social Security disability benefits, please contact the Social Security disability lawyers at Henson Fuerst today.