If the Social Security Administration is successful in passing proposed legislation on how benefits are calculated, some SSI recipients may soon receive larger monthly payments.
The proposed legislation, which was published earlier this month in the Federal Register, would exclude food from the computation of in-kind support and maintenance (ISM), which is unearned income in the form of food and/or shelter. The plan eliminates the need for SSI applicants and beneficiaries to disclose information regarding their food expenses for the agency to take into account in its ISM calculations.
According to the SSA, SSI benefits are currently cut by one-third if an individual or couple is living in another person’s house and receiving food and shelter support from that person. In this context, “support” refers to any food, shelter, or both provided to someone or paid for by someone else.
When a claimant is determined to be qualified for SSI, their monthly payment is calculated by deducting “countable income” from the federal benefit rate (FBR). The federal benefit rate (FBR), is the same as the maximum SSI payment this year of $914. This is also one metric on which a person’s SSI benefit is often determined. Income limits are also based on the FBR.
The COLA hike in 2023 is much bigger than the one in 2022 (5.9%). It is the largest COLA since 1981. In 1981, beneficiaries received an 11.2% COLA. Every year, the Social Security Administration (SSA) computes the annual cost-of-living adjustment by comparing the CPI from the previous COLA’s third quarter to the current year’s average CPI. Technically, the adjustment for urban wage earners and clerical workers employs the consumer price index (CPI-W).
The Social Security cost-of-living adjustment is determined by the percentage rise between the two data points. Social Security payments are not adjusted if the CPI decreased or stayed the same. Beneficiaries begin receiving new, higher benefits in January, after the SSA determines the COLA percentage increase for the year.
SSI is a lifeline for millions of Americans. The annual amounts are still not equivalent to 100% of the FPL. However, this legislation, if passed will provide some extra money to beneficiaries who desperately need it.
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