From January 1, 2019, Americans who are already receiving Social Security Disability (SSDI) benefits or Supplemental Security Income (SSI) benefits and those who will apply for disability benefits this calendar year will enjoy a nearly 3-percent increase in benefits due to the annual cost of living adjustment.
Our social security disability lawyer Los Angeles at Koszdin, Fields & Sherry explains that in 2019, more than 67 million Americans will get a 2.8-percent boost in their SSDI benefits, SSI benefits, and Veterans Disability Compensation.
While some of you might think that the increase is insignificant and meaningless, this is actually the largest increase in the cost of living since 2012.
What’s behind the 2.8-percent increase in disability benefits in 2019?
It would be unwise to deny or argue that the cost of living in California and all across the U.S. has soared in these past seven years.
Under federal law, federal benefits, including SSDI and SSI benefits, must keep up with the cost of living in the United States. “If the prices for goods and services go up, the government must adjust the amount of federal benefits to help Americans afford the cost of living,” explains our Los Angeles social security disability lawyer.
What to expect from the cost of living adjustment in 2019?
Many of you may recall that there was an increase in the cost of living in 2018 as well. Last year, the cost of living increase was propelled by rising gas prices caused by hurricanes Harvey and Irma. This year, Hurricane Florence is also partially responsible for 2019’s cost of living adjustments, as the damage caused by the east coast hurricane has driven gas and oil prices, too.
The 2.8-percent increase in SSDI and SSI benefits is among many changes Americans should expect this year. Adjusting the cost of living has also affected all of the following:
- Medicare premiums. Many of you will not be thrilled about this, but Medicare premiums and Part B deductibles will also increase in 2019, which may bite off a chunk of the disability benefits increase.
- Income while receiving SSDI and SSI benefits. Starting from January 1, 2019, those who are eligible to receive disability benefits can now earn up to $1,220 per month, up from $1,180 a month in 2018. For blind persons, earnings may amount to up to $2,040 per month without affecting their disability benefits (an increase from $1,970 a month).
- Maximum earnings limit. The wages on which Social Security taxes are paid will also be increasing in 2019, to $132,900. Our Los Angeles social security disability attorney explains that this will mean that the maximum earnings used in calculations of SSDI and SSI benefits will be increased to $132,900. The Federal Insurance Contributions Act (FICA) tax rate for self-employed individuals will remain intact: 7.65% or 15.3%.
- Maximum monthly retirement benefit. For Americans who are retiring at their full retirement age (which will also increase as part of 2019’s cost of living adjustments), the maximum monthly retirement benefit will rise to $2,861 (up from $2,788 in 2018).
- Full retirement age. In 2019, the full retirement age for Americans who turn 62 this calendar year will increase to 66 years and six months.
- Retirement earnings limit. In 2019, Americans who (1) are collecting Social Security retirement benefits, (2) are working, and (3) are not at their full retirement age will be eligible to receive up to $17,640 annually without affecting the amount of disability benefits.
We agree, too many numbers, too confusing. It may be difficult to determine how the cost of living adjustments in 2019 will affect you and your family, which is why our social security disability attorney in Los Angeles offers a free consultation to evaluate your particular situation. Contact Koszdin, Fields & Sherry by calling at 818-812-5639 or 800-747-3447 today.