SSA Announces 5.9% Benefit Increase for 2022
On Oct. 13, the Social Security Administration (SSA) announced that the Social Security and Supplemental Security Income (SSI) benefits for approximately 70 million Americans will increase 5.9 percent in 2022. This is the largest increase in 40 years.
The 5.9 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2022. 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.
Increased payments to approximately 8 million SSI beneficiaries will begin on Dec. 30, 2021. The COLA increase also applies for Americans who rely on VA disability, military retirement, and other government benefits. Changes to Medicare for 2022 haven’t been announced yet. When information is available, it will be provided at www.Medicare.gov.
COLA Adjustment Applicability
COLA adjustments don't apply to Social Security recipients only. When you process income certifications, be mindful of the following individuals to which the adjustments also apply:
- Retired military veterans
- Disabled veterans
- Veterans’ pension benefits recipients
- Survivor benefit annuitants
- Surviving families of veterans
- Social Security recipients
- Federal civilian retirees
- Supplemental Security Income (SSI) recipients
- Social Security Disability Insurance (SSDI) recipients
- Medicare Extra Help and Medicaid recipients
- Federal and state food and housing assistance program participants
SSA updates to data in the EIV system are made periodically. Social Security benefits that include the COLA aren’t available from SSA for uploading into EIV until the end of the calendar year [HUD Handbook 4350.3, par. 9-6(B)(1)(e)]. So, when processing recertifications that include Social Security benefits with an effective date of Jan. 1, Feb. 1, March 1, and April 1, owners must define the manner in which the COLA will be factored into the calculation of the SSA benefit, and the method of verification that will used to support the calculation. All recertifications effective after April 1 must reflect the SSA benefit that includes the COLA.
In order to complete the recertification steps outlined in Chapter 7 of the HUD Handbook [Figure 7-3: Recertification Steps] and provide the tenant with the required 30-day notice of any increase in rent, owners must use one of the methods below for determining the tenant’s income:
- Use the benefit information reported in EIV that doesn’t include the COLA as third-party verification as long as the tenant confirms that the income data in EIV is what he or she is receiving;
- Use the 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 the tenant file with 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.
When determining the income of residents or applicants, owners and managers should use the new COLA rate when projecting income for 2022. The 5.9 percent COLA can be applied by multiplying the current award amount by 1.059. Remember to apply the COLA to benefits for the appropriate number of months based on the effective date of the certification.
Example: Bill would like to move in on Dec. 1, 2021. Bill’s 2021 gross Social Security monthly amount is $850. You will calculate his Social Security income as follows:
- $850 x 1 = $850 (December 2021)
- $850 x 1.059 = $900.15 (2022 monthly amount)
- $900.15 x 11 = $9,901.65 (January – November 2022)
Therefore, you would add $850 to $9,901.65 to come up with $10,751.65 (12 months) for Bill’s annual anticipated income.
If you’ve already processed move-ins for January 2022, you should review the household income and apply the COLA to benefits issued by the SSA since it’s a known anticipated change in income.
You can use the SSA benefit, award letter, or Proof of Income letter provided by the tenant or applicant that includes the COLA adjustment if the date of the letter is within 120 days from the date of receipt by the owner.
For a third-party verification directly from the SSA, don’t send tenants or applicants to the SSA office [HUD Handbook 4350.3, par. 9-15]. Tenants or applicants can request benefit information from the SSA using SSA’s website or toll-free number.
To obtain benefit information using the SSA’s website, the applicant can visit www.ssa.gov/myaccount/proof-of-benefits.html and log in to my Social Security to obtain a benefit verification letter. A tenant or applicant who hasn’t set up an account can easily create one.
To obtain benefit information using the SSA’s toll-free number, an applicant would call the SSA at 1-800-772-1213. The benefit verification letters may be requested 24 hours a day using the automated telephone service. TTY 1-800-325-0778 is available Monday through Friday between 7 a.m. and 7 p.m. for individuals who are deaf or hard of hearing. This information is free, and the tenant should receive the letter in the mail within 10 days.
Once the site obtains the benefit verification letter for use in calculating a tenant or applicant's income, you should keep a copy of the letter in the tenant’s file and return the original to the tenant or applicant for their records.
Changes to Medicare Premiums
For Social Security beneficiaries receiving Medicare, Social Security won’t be able to compute their new benefit amount until after the Medicare premium amounts for 2022 are announced.
Final 2022 benefit amounts will be communicated to beneficiaries in December through the mailed COLA notice and My Social Security’s Message Center. Information about Medicare changes for 2022, when announced, will be available at www.medicare.gov. Owners must also consider changes to Medicare premiums paid by elderly/disabled families when calculating medical expense deductions