Even though experts across the country wondered if 2019’s cost of living increase would top 3%, two weeks ago the SSA issued a press release indicating that the increase for 2019 would be 2.8 %. The SSA press release can be found here: https://www.ssa.gov/news/press/releases/2018/#10-2018-1
The 2019 Cost of Living Adjustment, or COLA, is up from 2018’s COLA of 2.0%. As a sign that the economy continues to stay strong, this is the largest SSA COLA in six years. Further good news is that in some years no COLA was issued. In fact, no COLA has been issued in three of the last eight years.
Almost all of my clients are affected by the SSA COLAs. For SSDI recipients, the effect is obvious: each month, you’ll be receiving 2.8% more than in 2018. For those folks on a rigid fixed income, trying to cope with rising medical bills, this increase can be very important. 2019’s COLA will affect 62 million Social Security beneficiaries (not all of these are disability beneficiaries, obviously).
For folks receiving both SSDI and Long Term Disability (LTD) insurance benefits, most LTD policies do not offset the payable LTD benefits by any applicable COLAs. What this means for those receiving both benefits is that the COLA money is extra money from the SSA that need not be paid back to the LTD insurance company.
For our former federal employee clients receiving FERS disability retirement benefits, the COLA is a bit more complicated. The SSA COLA is not material to the FERS COLA. The FERS COLA is tied directly to the Consumer Price Index increase from the preceding year. For 2019 the FERS COLA will be 2% because the Consumer Price Index increase was between 2% and 3%.
Unfortunately, the above applies only to retired beneficiaries. For those currently working, a 2.1% to federal workers was canceled by the President in August, citing budget concerns. This cancellation applied to the 2.1 across the board raise for most employees, and special locality pay for certain civilian employees. There is better news for military salaries because President Trump did not cancel the pay raise of 2.6% set for those in our armed forces.
If you have questions or concerns about your disability benefits, please contact me!
You may also be interested in:
- Federal Disability Retirement Applications for Deceased Claimants
- The Importance of Pre-Disability Earnings
- Social Security Administration Adopts New Rules to Make It Easier to Deny Applications for Disability Benefits