10 Social Security and SSI Disability Changes for 2021

by | Published on Jan 18, 2021 | Social Security Disability

Social security disability benefits provide economic succor to millions of disabled Americans. The disability or impairment must fall within the SSA (Social Security Administration)’s definition of disability as laid down in their Blue Book, and eligibility is determined based on a stringent medical chart review. In the month of October every year, the SSA announces the annual changes to the social security program for the ensuing year, which people wait for eagerly. Here are some things to note for the year 2021.

  • The SSA has announced a 1.3% increase in social security and supplemental security income (SSI) benefits for 2021, a slightly smaller COLA or cost of living increase than the year 2020. Social security recipients will start receiving the increased payments from January 2021 whereas SSI recipients have already received the increased payments in their checks or deposits on December 31, 2020.
  • The new SSI federal base amount is $794 per month for an individual; this amount is $1,191 per month for a couple. In states that pay a supplementary SSI payment, the SSI payment amounts will be higher.
  • The average benefit amounts expected for social security retirement and disability benefit recipients for 2021 are as follows:
    • Average retirement benefit: $1,543, an increase of $20
    • Average disability benefit: $1,277, an increase of $16
    • Average widow’s or widower’s benefit: $1,453, an increase of $19
  • At full retirement age, the maximum social security retirement benefit amount a person can collect per month in 2021 is $3,148.
  • Some social security recipients may find that the small 1.3% increase may be partially offset by increase in Medicare Part B premiums, especially for retired persons with high income. Due to COVID-19 costs, Medicare premiums could significantly increase and so Congress has voted to cap increases to Medicare premiums this year. Consequently, the Part B premium is expected to increase only by an estimated $4 per month.
  • An SSDI (Social Security Disability Insurance) or SSI benefit applicant must be earning only less than $1,310 per month to qualify for benefits. Blind applicants can make up to $2,190 per month. If you are earning above those limits, you could be considered as doing “substantial gainful activity” or SGA.
  • A person currently receiving SSDI who attempts to return to work can make more during a trial work program. When an SSDI recipient makes more than $940 per month, which is up from $910 per month in 2020, a month counts as a trial work period month.
  • The new federal income limit for SSI is $794 per month. However, rules are rather complex that govern what income is countable and what is not. More than half of the income earned by an SSI recipient is not counted towards the limit. You can receive SSI until you make up to $1,672 per month, if you have no other income. However, any income you earn between $0 and $1,672 will reduce the monthly benefit. Some states make extra payments to SSI recipients and in such states the income limit for SSI beneficiaries may be higher. For students receiving SSI, the income exclusion amount is now $1,930 per month, up to a yearly limit of $7,770.
  • The maximum amount of earnings that is subject to the social security tax is $142,800 in 2021, while it was $137,700 in 2020. There is no limit to the amount of income that is subject to Medicare tax.
  • Benefits will be reduced to people who receive early retirement benefits but continue to work, if they earn more than $18,960 per year ($1,580 per month). However, in the year a recipient reaches full retirement age, he or she can make up to $4,210 per month without having retirement benefits taken away. Once the worker reaches full retirement age, the benefits will not be cut at all, irrespective of how much work he or she does or the earnings. If any early retirement benefits were reduced while you were working, those will be added back to your retirement check over the next 10 – 15 years.

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