Sunday, October 30, 2011

More COLA? How the new increase affects other benefits.

On October 19, 2011, the Social Security Administration announced that there will be a 3.6% cost-of-living adjustment (COLA) for 2012.  This is big news since this is the first adjustment since 2009.  Starting in January, beneficiaries will see an increase in their retirement checks or social security insurance (SSI) checks.  SSI checks from 2009-2011 maxed out at $674/month; in 2012, those checks will be as big as $698/month.  This brings an SSI recipient's annual income up to $8,386.75 from $8,095.32.  The average SS retirement beneficiary will receive an additional $39/month due to this increase (that is an additional $467/year).

The max benefit amount the SSA sets for SSI is used to determine the income qualifications for other benefits.  For instance, in Georgia, a nursing home resident must have less than $2,022/month in income to qualify for Medicaid (or use a Qualified Income Trust to qualify).  That $2,022 amount is three times the SSI max benefit (so, 674 x 3 = 2022).  With the new change, the income cap will be $2,094/month (that is, 698 x 3 = 2094). So, starting in 2012, nursing home residents that receive less that $2,094/month in income may qualify for Medicaid (if they also meet asset requirements).  This is just one example of the benefits that will be effected by this change in COLA.  Veteran benefits, requirements for community programs and others will be effected, too. Social workers and public benefits specialists will have to quickly get up to speed on the new requirements once they go into effect.  We have become familiar with the old numbers since they were good for 3 years, and now we'll have to change our cheat sheets and databases!

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