Every year, usually in October, the federal government announces the latest Cost of Living Adjustment, fondly referred to as COLA. The new rates are based on the Consumer Price Index, which is really a measure of the average change in prices for the nation’s goods and services.
Ah, but why should you or your consumers care?
It’s because Social Security’s Substantial Gainful Activity (SGA) level and many of its work incentives are based on the annual COLA rate. In 2019, for instance, that meant a consumer eligible for Social Security Disability Insurance (SSDI) earning less than $1,220 per month might still be eligible for benefits after his or her Trial Work Period. The new 2020, SGA level for workers who are disabled is $1,260; it’s $2,110 for workers who are blind.
The recent COLA increase led to a slight increase in the SGA, which means your consumer can now earn $40 more per month ($480 per year) and still qualify for benefits.
The bottom line: When the SGA increases, many consumers can earn more and continue to be eligible for benefits.
COLA also affects recipients of Supplemental Security Income (SSI). In 2019 the maximum SSI payment was $771.The new Federal Benefit Rate for 2020 is $783, an increase of $12 per month.
Students with disabilities who are working make up another group affected by COLA if they are using the Student Earned Income Exclusion. In 2020, Social Security ensures that working students can keep more of their SSI check by not counting up to $1,900 per month ($7,670 annually) of earned income when calculating a student’s monthly SSI payment.
Why, you ask, is the rate increase so small if the economy has improved?
Okay, let’s get a little benefits nerdy here. COLA is based on “quarters of coverage” and is averaged over two years. In October 2019, the new rate was based on the third quarter of 2017 through the third quarter of 2018.
We get it: It’s complicated. That’s why Indiana has resources for workers with disabilities and the people who support them. That means you!
Have more questions? Contact a Benefits Information Network (BIN) liaison. The majority of community rehabilitation providers in Indiana now have a Certified BIN liaison working with them. For a referral to a BIN liaison, contact the Center on Community Living and Careers’ Stephanie Gage (our benefits guru) at sngage@iu.edu.
Benefits Information Resources
- SSA Cost-of-Living Adjustment (COLA) Information 2020
- 2020 FACT Sheet SSA Changes
- Center for Community Living and Career’s (CCLC) Benefits Information Network trainings page–There you’ll find valuable registration information for workshops and trainings throughout the year.
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