The year was 1983: The U.S. invaded Grenada. A gallon of gas cost 96 cents. Michael Jackson’s “Thriller” video premiered. That year was also the last time that recipients of Social Security disability benefits saw a cost-of-living increase steeper than the one just announced for 2022. This year, benefits will rise 5.9 percent, the sharpest upsurge since 1983’s 7.4 percent jump.
Cost-of-living increases are tied to the consumer price index, and rising inflation rates and gas prices caused by the ongoing coronavirus pandemic mean Social Security disability and retirement recipients will get a large boost in 2022. The 5.9 percent increase dwarfs last year’s 1.3 percent rise, and over the past decade hikes have averaged just 1.65 percent.
For recipients Supplemental Security Income (SSI), Social Security’s primary disability benefits program for low-income people, monthly benefits will go from $794 to $841for individuals, or from $1,191 to $1,261 for couples. (Some states provide an additional supplement for SSI recipients. Specific state-level supplements can be viewed here.)
For recipients of Social Security Disability Insurance (SSDI), Social Security’s primary disability benefits program for people with longer work histories, average monthly benefits will go from $1,282 to $1,358. Part of the increase will be eaten up by higher Medicare Part B premiums, however. The standard monthly premium for Medicare Part B enrollees has not been announced yet, but it is projected to rise $10 a month to $158.30.
The annual SSA COLA affects more than just benefit levels. As one example, SSI and SSDI eligibility is contingent on recipients no longer being able to adequately compete in the workforce, or perform substantial gainful activity (SGA). To determine whether a person can perform SGA, they must not be able to achieve a specified monthly income. This SGA threshold will increase from $1,310 to $1,350 a month in 2022.
Similarly, students receiving SSI can have a certain amount of money excluded without losing eligibility for the program. This threshold will increase in 2022 from $1,930 to $2,040 monthly, or $7,770 to $8,230 for the entire year.
The method the SSA uses to determine the COLA is widely opposed by disability rights advocates, who argue that it is a poor measure of the spending patterns of Social Security recipients, who tend to spend more on medical appointments, prescriptions, and other essential needs that have higher inflation rates than the rest of the economy.
For more on the 2022 Social Security benefit levels, click here.