Each year, the Social Security Administration assesses the state of Social Security taxes and payouts. Adjustments to these rates occur when there is a need to accommodate inflation and cost-of-living expenses. If the cost-of-living increases, Social Security payouts change to reflect this. As such, Social Security recipients can expect their paychecks to increase in the upcoming year.
Why Are Social Security Paychecks Increasing?
The cost-of-living adjustment, or COLA, affects changes in Social Security payments. COLA takes into account price changes in everyday consumer essentials. This includes pricing increases for food, transportation, healthcare, housing, education, among others. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) records percentage increases in these areas. The Bureau of Labor Statistics uses this information to calculate changes in Supplemental Security Income (SSI). If there is no increase in cost-of-living, there is no COLA for that year.
Changes in cost-of-living affect COLA so that Social Security benefits remain effective. Without this adjustment, Social Security benefits would not keep up with inflation. The COLA was first enacted in 1972 to protect Social Security recipients from inflation. In 1975, COLA became an automatic and routine adjustment.
What Can I Expect from the Social Security Paycheck Increase?
The Social Security Administration announced recently that COLA is set to increase by 1.6% in 2020. This means that the maximum SSI Federal payment standard for an individual will increase from $771 per month to $783 per month. For couples, this maximum will increase from $1,157 per month to $1,175 per month. These changes will go into effect in January of 2020.
Increases in COLA will affect both Social Security and SSI recipients. Currently, there are 63 million Social Security beneficiaries in the US. There are also 8 million recipients of SSI currently. This means that the 2020 COLA will affect 69 million Americans.
What Timeline Can I Expect for the COLA Increase?
The COLA increase will go into effect for Social Security recipients sometime in January of 2020. For SSI recipients, this change goes into effect on December 31 of 2019.
If you are a beneficiary of either of these benefits, you can expect a notification in early December about how these changes will affect you. Beneficiaries of Social Security who are receiving Medicare will not receive this notification until later. This is because 2020 Medicare premium amounts will affect your COLA payments. After the government announces new Medicare premiums, the Social Security Administration will calculate your new COLA payments. You should receive notification of this calculation in late December.
How Will the 2020 COLA Affect Me?
To find your new benefit amounts, you can access your my Social Security account online. This portal allows you to access your account information and opt into or out of certain services. It also provides a convenient way to receive your COLA notification.
You can also speak with an experienced Oklahoma Social Security lawyer to learn more. An attorney can make accessing and understanding your COLA information easy.
You may also want to check out the Social Security Administration’s 2020 COLA Fact Sheet.
Contact Our Oklahoma Social Security Lawyers Today
The Oklahoma Social Security lawyers of Troutman & Troutman, P.C. keep up-to-date with the law. Our attorneys help our clients’ secure the benefits they need. If you have any concerns about COLA or your Social Security Disability benefits in general, contact us today.