Do SSA Benefits Vary Based on Cost of Living?

If you are applying for monthly disability benefits from the Social Security Administration (SSA), you may wonder if the amount of those benefits may vary based on the current cost of living. The current cost of living can impact your income somewhat, but the way your income is impacted is dependent upon the kinds of benefits you receive for being disabled.

There are two kinds of disability benefits administered by the SSA, one is Supplemental Security Income (SSI) and the other is Social Security Disability Insurance (SSDI).

Supplemental Security Income

SSI is a monthly benefit for individuals who have been approved for disability benefits but also meet the stringent financial requirements set forth to receive SSI. SSI’s financial limitations are $943 for an individual and $1,415 for a couple. However, the SSA does use a special process to determine your income as not all income is counted toward your limit.

As an example, the first $20 of income earned during a month, and the first $65 of earnings and one-half of earnings over $65 per month are not included. Government assistance such as SNAP (formerly food stamps) or heating assistance are not included as well.

Social Security Disability Insurance

SSDI benefits are awarded to disabled workers who meet the SSA’s criteria for being disabled but also meet the criteria set forth to receive benefits from this program. In order to qualify for SSDI, you have had to earn sufficient credits from working. In general, this means you must have worked the equivalent of five years full-time out of the last 10. This guideline can vary based on your age at the time of your claim.

As an example, a 22-year-old who became disabled while serving in the military may still be eligible for SSDI benefits despite not having a lengthy work history. Your financial situation is not taken into consideration as this is not a needs-based disability program.

The Impact of COLA on SS Benefits

New beneficiaries who are just coming on to the rolls for Social Security disability benefits do have the tendency to average higher benefits than those who are leaving the rolls because average benefits do increase from month to month on average. Usually, this gradual increase of average monthly benefits is impacted by abrupt increases that are the result of annual cost-of-living adjustments, which are more commonly called COLAs.

As an example, for the upcoming year of 2023, the COLA will be 8.7 percent. There have been years that Social Security beneficiaries saw no COLA increase, and that increase is dependent upon the economy and approval by Congress. Both SSI and SSDI are impacted by the COLA for the year. So, if you are just applying for disability benefits, you can generally expect a small increase of benefits each year.

Applying for Social Security Disability

If you are ready to apply for disability benefits, you should consult with an attorney. Regardless of whether you are seeking SSDI, SSI, or both, you can greatly improve your odds of winning your claim and being awarded benefits with legal expertise on your side. Your application must be completed in detail and the key to a successful claim is documentation, medical records, and filling out the application in detail and not leaving any blanks.