News | Social Security COLA has been announced! Biggest in almost 40 years!
Oct 13, 2021
Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 70 million Americans will increase 5.9 percent in 2022. Our research indicates that this is the highest it has been in nearly 40 years - since 1982.
The 5.9 percent cost-of-living adjustment (COLA) will begin with benefits payable to nearly 64 million Social Security beneficiaries in January 2022. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2021.
Medicare Information
Below is an excerpt from the Costello Compliance online on-demand course series, Succeed at Qualifying Households for Affordable Housing. For a catalog of Costello University training courses see HERE.
COLA Calculation Tutorial
Important points:
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Social Security verifications received so far in 2021 will not reflect the 2022 COLA.
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Income certifications that include social security income in 2021 but that had income verified prior to the COLA announcement will need to include the COLA by doing an extra calculation.
Example #1
A social security recipient is anticipated to move into an affordable housing unit on November 1, 2021. In September, it was verified that she had 2021 monthly social security benefit income of $931. The 5.9% COLA was announced on October 13, 2021.
Annual Income Calculation:
Step 1: Calculate 2021 income.
$931 x 2 = $1,862 (income for November and December 2021)
Step 2: Calculate the 2022 monthly income with COLA.
$931 x 1.059 = $985.929 (2022 monthly benefit)
(Note: multiplying a number by 1.059 is the mathematical equivalent of adding 5.9%)
Step 3: Calculate total 2022 income.
$985.929 x 10 = $ 9,859.29 (income for January-October 2022)
Step 4: Add 2021 and 2022 benefit income
$1,862 + $ 9,859.29 = $11,721.29 annual benefit income
Example #2
Example #2
A SSI recipient is anticipated to move into an affordable housing unit on January 1, 2022. When his income is being verified, he brings in the benefit letter that he received in October 2022 that informed of the 5.9% COLA for 2022. The monthly SSI benefit listed on the letter is $750.
Annual Income Calculation:
No calculation is necessary, as the COLA is already included in the letter.
HUD Specifics
added 10/18/2021
LIHTC and HOME programs are strictly concerned with determining if a household is income-eligible and the COLA is generally incorporated when it becomes known and verifiable. As rent is based on income in HUD programs, and appropriate notice must be given and forms signed timely, HUD has more detailed rules in this regard that go beyond the above. HUD's instructions say the below.
4350.3, par 9-6
When processing certifications with an effective date of January 1, February 1, March 1, and April 1, in order to complete the Recertification Steps outlined in Chapter 7, Figure 7-3, and provide the tenant with the required 30-day notice of any increase in rent, the owner must use one of the methods below for determining the tenant’s income.
- Use the benefit information reported in EIV that does not include the COLA as third-party verification as long as the tenant confirms that the income data in EIV is what he/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 COLA increase percentage 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 does not agree with the income the tenant reports he/she is receiving. (See Paragraph 9-15)
Regardless of the method selected, all recertifications effective after April 1, 2022, will incorporate the Social Security benefit including the COLA.
Looking for quality affordable housing occupancy training? Check out our Succeed at Qualifying Households series of courses. There are options for all major Affordable Housing programs. You can read more HERE.
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