News | The 2026 Social Security COLA has been announced
Oct 24, 2025
Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 70 million Americans will increase 2.8% in 2026. This is up from last year but less than the three years before that, with 2022 being the highest it had been in over 40 years. Inflation rates explain the differences.
The 2.8 percent cost-of-living adjustment (COLA) will begin with benefits payable to Social Security beneficiaries in January 2026. Increased payments to SSI beneficiaries will begin on December 31, 2025.
Medicare Information
Information about Medicare premium changes for 2026, when announced, will be available at www.Medicare.gov.
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 verification letters received so far in 2025 will not reflect the 2026 COLA.
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Income certifications that include social security income in 2025 but that had income verified before 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, 2026. In September, it was verified that she had 2025 monthly social security benefit income of $940. The 2.8% COLA was announced on October 24, 2025.
Annual Income Calculation:
Step 1: Calculate 2024 income.
$940 x 2 = $1,880.00 (income for November and December 2025)
Step 2: Calculate the 2026 monthly income with COLA.
$940 x 1.028 = $966.32 (2026 monthly benefit)
(Note: multiplying a number by 1.028 is the mathematical equivalent of adding 2.8%)
Step 3: Calculate total 2026 income.
$965.38 x 10 = $9,663.20 (income for January-October 2026)
Step 4: Add 2025 and 2026 benefit income
$1,880.00 + $9,663.20 = $11,543.20 annual benefit income.
Example #2
Example #2
A SSI recipient is anticipated to move into an affordable housing unit on January 1, 2026. When his income is being verified, he brings in the benefit letter that he received in October 2025 that informed of the 2.8% COLA for 2026. The monthly SSI benefit listed on the letter is $750.
Annual Income Calculation:
No calculation is necessary, as the COLA is included in the letter.
HUD Specifics
LIHTC and HOME programs are strictly concerned with determining if a household is income-eligible, and the COLA is generally incorporated for new move-ins immediately after 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 beyond the above. HUD's instructions say the below.
HUD | COLA after HOTMA
HOTMA Implementation Notice B.3
"Effective the day after SSA has announced the COLA, PHAs/MFH Owners are required to factor in the COLA when determining SS and SSI annual income for all annual reexaminations and interim reexaminations of family income that have not yet been completed and will be effective January 1 or later of the upcoming year."
We will publish other HOTMA COLA-related matters as HUD answers any further questions.
HUD | Pre-HOTMA
LIHTC and HOME programs are strictly concerned with determining if a household is income-eligible, and the COLA is generally incorporated for new move-ins after 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, 2026, will incorporate the Social Security benefit, including the COLA.
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