2020 Social Security COLA Announced! with Bonus Calculation Tutorial

October 10, 2019

Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 67 million Americans will increase 1.6 percent in 2020.

 

The 1.6 percent cost-of-living adjustment (COLA) will begin with benefits payable to nearly 69 million Social Security beneficiaries in January 2020. Increased payments to more than 8 million SSI beneficiaries will begin on December 31, 2019. (Note: over 3 million people receive both Social Security and SSI benefits).

 

 

Click HERE for the announcement from SSA

 

Medicare Information
 

Information about Medicare changes for 2020, when announced, will be available at www.Medicare.gov.

 

Below is an excerpt from the Costello Compliance webinar Qualifying Households for Tax Credit Housing we just conducted this week. For a schedule of all upcoming in-person and webinar Costello training sessions see HERE.

 

 COLA Calculation Tutorial

 

Important points:

  • Social Security verifications received so far in 2019 will not reflect the 2020 COLA.

  • Income certifications that include social security income in 2019 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, 2019. In September, it was verified that she had 2019 monthly social security benefit income of $931. The 1.6% COLA was announced on October 10, 2019.

 

Annual Income Calculation:

 

Step 1: Calculate 2018 income.

              $931 x 2 = $1,862 (income for November and December 2019)

Step 2: Calculate the 2020 monthly income with COLA.

              $931 x 1.016 = $945.896 (2020 monthly benefit)

(Note: multiplying a number  by 1.016 is the mathematical equivalent of adding 1.6%)

Step 3: Calculate total 2020 income.

              $945.896 x 10 = $ 9,458.96 (income for January-October 2020)

Step 4: Add 2019 and 2020 benefit income

              $1,862 + $ 9,458.96 = $11,320.96 annual benefit income

 

Example #2

A SSI recipient is anticipated to move into an affordable housing unit on December 1, 2019. When his income is being verified, he brings in the benefit letter that he received in October 2019 that informed of the 1.6% COLA for 2020. 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.

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