SSA Announces 2021 COLA Increase of 1.3%
The Social Security Administration recently announced that the Social Security and Supplemental Security Income (SSI) benefits will increase 1.3 percent in 2021. The 1.3 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2021. Increased payments to more than 8 million SSI beneficiaries will begin on Dec. 31, 2020. Changes to Medicare for 2021 have not yet been announced. When information is available, it will be provided at www.Medicare.gov.
The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics. Some other adjustments that take effect in January of each year are based on the increase in average wages. Most people who receive Social Security payments will be able to view their COLA notice online through their “my Social Security account.” People may create or access their “my Social Security account” online at www.socialsecurity.gov/myaccount.
Annual or interim recertifications effective January, February, March, or April 2021 should be processed according to HUD Handbook 4350.3, par. 9-6 (B)(1)(e). Based on this section, owners must use one of the following methods for determining the tenant’s income for annual or interim recertifications effective Jan. 1, 2021–April 1, 2021:
- Use the benefit information reported in EIV that doesn’t include the COLA;
- Use the 2021 SSA benefit, award letter, or Proof of Income Letter provided by the tenant that includes the COLA adjustment if the date of the letter is within 120 days from the date of receipt by the owner;
- Determine the tenant’s income by applying the COLA increase percentage to the current verified benefit amount and document in the tenant file how the tenant’s income was determined; or
- Request third-party verification directly from SSA when the income in EIV doesn’t agree with the income the tenant reports he or she is receiving.
- All recertifications effective after April 1 must reflect the SSA benefit that includes the COLA.
If you’ve already processed files for move-in for January 2021, it’s recommended that you review the household income and apply the COLA to benefits issued by the Social Security Administration since it’s a known anticipated change in income.
It’s important to note that with publication of the Streamlining Final Rule, owners are permitted to use a streamlined income verification measure specifically, and only for, these fixed-income sources such as Social Security and Supplemental Security Income. The streamlined verification method for fixed income (such as Social Security and pensions) has given owners and agents the option to verify this income once every three years. Owners apply COLA or other fixed percentage increases in years two and three. Owners aren’t required to obtain third-party verification of fixed income in years two and three.
With this option, verification methods have also changed for fixed-income families in which 90 percent of the household income is fixed. For these families, owners will conduct third-party verification of income in year one, and in years two and three owners will apply COLA or other fixed percentage increases to fixed income. Owners will accept self-certification of the amount of non-fixed income.