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What are the Changes to Social Security in 2021 and how will those changes affect me?

Appealing for benefits is best done under the guidance of an experienced disability lawyer.

What are the Changes to Social Security in 2021?

Author Attorney Lloyd Bemis:

  1.   New Cost of Living Adjustment (COLA).
  2.   Social Security monthly benefits will increase.
  3.   Substantial Gainful Activity will increase.
  4.   The full retirement age increases.
  5.   The maximum Social Security monthly retirement benefit increases.
  6.   Amount of earnings subject to Social Security payroll tax increases.
  7.   The amount of earnings needed for Social Security credits increases.
  8.   Changes to Medicare premiums and coverage.

changes to Social security 2021

Social Security is changing. These changes affect not only the disabled their spouses and their children but also beneficiaries who receive SSI and retirees

Changes are on the way for recipients of Social Security benefits in 2021! Approximately 70 million Americans who receive Social Security benefits will see an increase in their monthly income. This includes people with disabilities and their spouses and children, as well as beneficiaries of Social Security Income (SSI) and retirees. January 2021 marks the date recipients will see these benefit increases as well as other changes taking effect.

  1.   New Cost of Living Adjustment (COLA).
  2. The Cost of Living adjustment for 2021 is 1.3%, a decrease from the 2020 COLA of 1.6%. This increase will ensure that benefits keep pace with inflation and is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). To calculate COLA, Social Security takes the average CPI-W reading from the third quarter of the current year – July through September 2020 – and compares it to the CPI-W of the previous year. If CPI-W rises, inflation also rises and prices for goods and services increase. The Cost of Living Adjustment is intended to offset these costs. In general, low inflation means the cost of goods and services is low, but low inflation also means the COLA increase will be smaller and increases in Social Security benefits will be smaller as well.

  3.   Social Security monthly benefits will increase.
  4. Over 69 million people receive a monthly income provided by a Social Security program, including people with disabilities, their spouses and their children. The new federal base monthly amount is $794 for an individual and $1,191 for a couple. The average monthly benefit for a worker, spouse, and one or two children is estimated to be $2,224 (up from $2,176) and the average payment for a disabled individual is estimated to be $1,277 (up from $1,258). The average retirement benefit will increase to $1,543 (up from $1,523) and the average widow/widower’s benefit will rise to $1,453, (an increase of $19).

  5.   Substantial Gainful Activity will increase.
  6. Every year the Social Security Administration updates SGA (Substantial Gainful Activity), a monthly earnings threshold. SGA is the amount a beneficiary can earn before Social Security benefits will terminate. In 2021 a nonblind person may earn $1,310 per month (up from $1,260 in 2020) and a blind person is permitted to earn $2,190 per month (up from $2,110 in 2020). Any individual earning more than these amounts will be doing SGA.

    If you have been denied disability don’t give up! Contact a Disability lawyer at 512-454-4000 for a free consultation and get the benefits you deserve.

  7.   The full retirement age increases.
  8. Full retirement age, or “normal retirement age,” is the age at which an individual can receive 100% of their monthly Social Security retirement payout. Full retirement age increases gradually for those born from 1955 to 1960 until it reaches 67. In 2021, full retirement age for those born in 1959 increases to 66 years and 10 months. If you claim benefits prior to reaching your full retirement age, you will receive a permanent reduction in your monthly payout. The earliest age a person can claim retirement benefits is 62; age 70 is the latest you can delay taking Social Security.

  9.    The maximum Social Security monthly retirement benefit increases.
  10. In 2020, the Social Security Administration capped monthly retirement benefits at $3,011 for people who had reached full retirement age. In 2021, the maximum payout increases to $3,148 (though few people collect this amount).

    To receive this maximum payment, a retired worker would need to satisfy three requirements:

    1.    They must have waited to full retirement age to claim benefits;
    2.   They must have worked at least 35 years; and
    3.   They must have reached or surpassed the maximum taxable earnings cap in each of the 35 years Social Security counts when calculating an individual’s retirement benefit.

  11.   Amount of earnings subject to Social Security payroll tax increases.
  12. Social Security tax rates remain the same for 2021. All earned income up to $142,800 (an increase from $137,700) will be subject to the Social Security payroll tax of 12.4%. An individual who is employed splits this tax with their employer, paying 6.2%, but self-employed individuals are responsible for the full amount.

  13.   The amount of earnings needed for Social Security credits increases.
  14. Individuals qualify for Social Security benefits by earning credits when they work in a job that withholds Social Security taxes. Social Security bases these credits on the amount an individual earns and uses their earnings and work history to determine eligibility for disability benefits, retirement benefits, and survivor benefits. Each year the amount of earnings needed for credits increases as average earnings levels rise. In 2021 an individual will receive one credit for each $1,470 of earnings (an increase from $1,410 in 2020), up to four maximum credits per year.

  15.   Changes to Medicare premiums and coverage.
  16. Each year the Centers for Medicare and Medicaid Services (CMS) announces changes to the Medicare system. Not all Social Security beneficiaries are enrolled in Medicare, but those who are will see changes to premiums, coverage, deductibles and coinsurance amounts. In 2021, the Part A premium will increase to $471, though many recipients qualify for free coverage; Part B premiums will increase to $148.50 with a $203 deductible. Part A is inpatient or hospital insurance and Part B is outpatient insurance used at doctors’ offices. These increases are less than previously predicted by CMS which expected a rise in costs after unparalleled spending on the Covid-19 pandemic.

    Other Medicare changes include:

    •   Some Medicare Advantage and Part D Prescription Drug plans have lower premiums.
    •   CMS has extended numerous Medicare treatment waivers due to the Covid-19 pandemic into 2021.
    •   Medicare B will cover acupuncture treatments.
    •   Some Medicare Advantage plans will cover ESRD treatment (End Stage Renal Disease).

Whether you are retired or a person with a disability, you will notice a change in your 2021 Social Security benefits.

The Social Security Administration posts updates online for disability and retirement beneficiaries who have a my Social Security account. Sign up online to view changes and receive courtesy notifications at

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Disability benefits are an important source of income for those who are unable to work. If you are not able to work due to accident or illness, you may be eligible for Social Security Disability or Long Term Disability benefits. If you have applied for benefits and been denied, contact the attorneys at Bemis, Roach and Reed for a free consultation. Call 512-454-4000 and get help NOW.

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Attorney Lloyd BemisAuthor: Attorney Lloyd Bemis has been practicing law for over 35 years. He is Superlawyers rated by Thomson Reuters and is Top AV Preeminent® and Client Champion Gold rated by Martindale Hubbell. Through his extensive litigation Mr. Bemis obtained dual board certifications from the Texas Board of Legal Specialization. Lloyd is admitted to practice in the United States District Court - all Texas Districts and has argued before the U.S. Court of Appeals, Fifth Circuit. Mr. Bemis is a member of the Travis County Bar Association. He has been active in the American Association for Justice and is a past Director of the Capital Area Trial Lawyers Association. Mr. Bemis and all the members of Bemis, Roach & Reed have been active participants in the Travis County Lawyer referral service.

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