To many people around the world, it seemed like this year would never end! 2020 was a challenging year for all and brought about many challenges, but things can only get better in 2021.
With the arrival of the New Year also comes significant Social Security changes that affect benefits. Here are a few changes that are coming to benefit recipients in 2021.
The COLA (cost of living adjustment) goes into effect in January 2021 and will increase to 1.3 percent. This will raise the monthly payment amount for several citizens, which will help many get back on their feet after a rough previous year of financial uncertainty.
Good news! All recipients who receive SSI benefits will also see a 1.3 percent increase in monthly payment amounts in 2021.
Also, students who receive SSI benefits while also consistently attending college can exclude a certain amount of income per month to receive the maximum monthly payment amount. This is a part of the student earned income exclusion rule, but there is a limit to how much a person can receive per month.
In 2021, this limit cap is increasing by $30/month to $1,930/month for all those who qualify.
Tax Cap Increase
There will also be a tax cap increase on the payroll tax that pays into Social Security. The payroll tax is currently set at 12.4 percent on eligible wages (employees pay 6.2 percent and employers pay the other 6.2 percent), but in 2021, this cap is increasing.
The maximum amount of earnings subject to the payroll tax is currently set at $137,700 but will rise to $142,800 next year.
Disability SGA Limit
For those who may be unaware, a person can only receive disability benefits if they do not engage in substantial gainful activity (SGA). This means if a person is earning more than the allowable amount per month, in some cases, this may be considered engaging in SGA.
Next year, the limit on SSDI and SSI recipients’ monthly earnings will increase to $1,310/month for non-blind recipients and $2,190/month for blind recipients.
Staying up to date on all Social Security changes that affect benefits is our top priority here at Disability Associates.
The Disability Associates legal team has more than 25 years of experience handling disability cases. We can help you from the beginning of the Social Security process to the end. Additionally, if you’ve tried on your own and your application has been denied, we can file your appeal.