For decades, American employees have made weekly or bi-weekly contributions to Social Security. Every paycheck that you receive has a deduction taken out to contribute to Social Security to help fund programs that protect older adults and those with disabling medical conditions. Even if you are an independent contractor, you will have to make those contributions on your own behalf when filing your quarterly tax returns.
Eventually, you can recoup your contributions by claiming benefits. Many people receive Social Security benefits to supplement their retirement savings. A smaller number of people may require Social Security Disability Insurance (SSDI) benefits because they develop a disabling medical condition.
Those who depend on Social Security can soon count on receiving more every month.
Social Security increases to reflect cost of living changes
If people always receive the same fixed payments for Social Security, inflation would eventually make those payments far less than what people need for financial security later in life or after a disabling injury.
By reviewing changes to the overall cost of living in the United States and adjusting Social Security benefits accordingly, the Social Security Administration (SSA) helps protect disabled and retired individuals.
The federal government has committed to regular cost-of-living increases in SSDI and Social Security Retirement benefits, as well as Supplemental Security Income. The benefit can increase to reflect changes in cost-of-living expenses in the United States. In 2022, the adjustment means an increase of 5.9% for Social Security and SSI recipients.
The benefits increase could be an upside to an appeal
Some applicants who need Social Security benefits don’t get approved by the SSA when they first apply. They have to appeal before they receive anything. There are often months of waiting involved in an SSDI benefits appeal.
If you are in the midst of an appeal, the benefits increase will affect what you receive after your approval. Not only will you receive the higher benefit amount when you start receiving monthly payments, but that higher rate will also apply to the backdated benefits you should receive shortly after a successful appeal.
Following changes to Social Security policies and SSDI benefits helps those who currently receive SSDI benefits or may qualify for them in the future.