SSA Announces Modest Cost-of-Living Adjustment for 2024
The Social Security Administration (SSA) recently announced that the Social Security and Supplemental Security Income (SSI) benefits for approximately 71 million Americans will increase 3.2 percent in 2024. The cost-of-living adjustment (COLA) will begin with benefits payable to more than 66 million Social Security beneficiaries in January 2024. Increased payments to approximately 7.5 million SSI beneficiaries will begin on Dec. 29, 2023. The COLA increase also applies for Americans who rely on VA disability, military retirement, and other government benefits.
The purpose of the COLA is to ensure that the purchasing power of Social Security and SSI benefits isn’t eroded by inflation. It’s based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year. This announced increase is significantly lower than last year’s increase of 8.7 percent and the announced increase of 5.9 percent for 2023. The increases for the previous two years were the largest increases since the early 1980s.
COLA Adjustment Applicability
COLA adjustments don’t apply only to Social Security recipients. 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
- 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 be used to support the calculation. All recertifications effective after April 1 must reflect the SSA benefit that includes the COLA.
To complete the recertification steps based on the guidance provided in HUD Handbook 4350.3 and give the tenant the required 30-day notice of any increase in rent, owners must use one of the methods below for determining the tenant’s income on annual and interim recertifications:
- 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 3.2 percent COLA increase 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 receiving.
Projecting 2024 Income
When determining the income of residents or applicants, owners and managers should use the new COLA rate when projecting income for 2024. The 3.2 percent COLA can be applied by multiplying the current award amount by 1.032. Remember to apply the COLA to benefits for the appropriate number of months based on the effective date of the certification.
For example, Bill would like to move in on Dec. 1, 2023. Bill’s 2022 gross Social Security monthly amount is $750. You will calculate his Social Security income as follows:
- $750 x 1 = $750 (December 2023)
- $750 x 1.032 = $774 (2024 monthly amount)
- $774 x 11 = $8,514 (January – November 2024)
Therefore, you would add $750 to $8,514 to come up with $9,264 (12 months) for Bill’s annual anticipated income. If you’ve already processed move-ins for January 2024, 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, owners should not send tenants or applicants to the SSA office. 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, the Centers for Medicare and Medicaid Services (CMS) recently released the 2024 premiums, deductibles, and coinsurance amounts for the Medicare Part A and Part B programs. Medicare Part B covers physicians’ services, outpatient hospital services, certain home health services, durable medical equipment, and certain other medical and health services not covered by Medicare Part A.
Each year, the Medicare Part B premium, deductible, and coinsurance rates are determined according to provisions of the Social Security Act. The standard monthly premium for Medicare Part B enrollees will be $174.70 for 2024, an increase of $9.80 from $164.90 in 2023. Owners must also consider changes to Medicare premiums paid by elderly/disabled families when calculating medical expense deductions.