SOCIAL SECURITY | COLA 2022
Will all Social Security recipients receive the new increase of $1,100?
On Wednesday the SSA confirmed a substantial raise for the programme's recipients to help cover the cost of inflation and mitigate the financial damage of covid-19.
On Wednesday the Social Security Administration (SSA) announced that the cost-of-living adjustment (COLA) for 2022 will be 5.9%, which represents the largest increase in 39 years.
The huge increase reflects the continuing economic damage done by the pandemic and the high level of inflation which has crippled the buying power of millions of low-income households. Last year’s increase of just 1.3% was one of the lowest in recent history, but today’s announcement means that Social Security recipients will be due a healthy raise in January.
On average, the increase equates to around $93 per month, or $1,104 per year, and will be available to all 70 million Social Security recipients when the adjustment comes into effect in December, with the payments to arrive in January.
Why is the COLA increase so big?
The unique economic situation has seen a surge in inflation across the country, pushing up the price of everything from household rent to grocery bills. The substantial stimulus package introduced by President Biden back in March provided a cash injection, and that could be followed up with a large-scale reconciliation bill later this month.
The upshot of all that federal spending is that inflation is expected to increase, and the SSA has set the COLA level to reflect the rise. However before the 5.9% increase was announced, experts were warning that even a huge increase may not be enough to shield seniors from the effects of surging inflation in the coming months.
Mary Johnson, Social Security and Medicare policy analyst at advocacy group the Senior Citizens League, warned: "There are a growing amount of estimates I'm seeing that inflation is going to continue into next year.”
She added: "I would not foresee that an almost 6% COLA is going to restore buying power if inflation continues into 2022."
When will the COLA increase go live?
Since 1982, the COLA increases have been effective with benefits payable for December, which means that recipients will start to see the increased payments from January onwards. The increase of 5.9% has now been set, meaning that any economic fluctuations in the next few months will not be taken into consideration by the SSA.
Some are concerned that even this generous increase does not fully mitigate for the extreme conditions that many are suffering from. Johnson told CBS News: "Food is one of the Number One issues we are seeing. Once they pay their rent and electricity they don't have enough money to buy their groceries or their prescription drugs."