If you are a disabled Veteran, a military retiree, or receive Social Security income benefits, you will get more money next year, but just how much? The Social Security & VA Benefit raises in 2021 will be slim, but atleast it's something. The increase will likely be less than this year’s increase. The 2020 Cost-of-Living Adjustment, also known as COLA, resulted in a 1.6 % increase, but you won’t get anything like that in 2021.
Cost-of-Living Adjustment for 2021
Social Security laws stipulate that amount of money paid to Americans who receive Social Security benefits (old age and disability), disabled Veterans, and military retirees must be adjusted annually for inflation. The Social Security Administration uses one of the measures of the Consumer Price Index (CPI) to gauge the inflation level during the third quarter of the year (July, August and September). Although the September inflation figures are not yet available, the inflation rate has been low this year, so the 2021 COLA will likely be a slim 1.3% increase tying the lowest positive increase since 1975. (The annual COLA has been worse. It was 0% three times: 2010, 2011, and 2016.)
The change will take effect beginning December 31 for Social Security and VA disability beneficiaries and military retirees and in January 2021 for those receiving Social Security old age benefits. The average increase for disability beneficiaries will be about $19.70 per month. For some higher income beneficiaries the COLA increase will be mostly wiped out by increases in Medicare Part B premiums—which cover doctors’ exams, outpatient care, and some preventive services. Premiums could rise by a hefty $17.40 a month in 2021 because of large pandemic-related Medicare costs. Most Medicare beneficiaries are not in high income brackets and are protected by a legal provision which has a “hold harmless” clause that requires Part B premiums be adjusted to prevent reduction to the net Social Security benefit of eligible people.
Learn More About VA Benefit Raises
At Cuddigan Law, our Veterans' disability attorneys stay up-to-date with the latest changes to the benefits you're entitled to, including upcoming VA benefit raises. If you still have questions about the content above, contact us online or give us a call to schedule a consultation with one of our experienced Nebraska attorneys.
