Americans Have Just Weeks Left Until New Social Security Rule Goes into Effect

A change to Social Security applications is going into effect at the end of the month.

About 70 million people receive Social Security payments every year, with some qualifying for Supplemental Security Income (SSI) if they’re disabled or senior Americans who meet certain eligibility requirements. One of the eligibility requirements stipulates that Americans cannot earn more than $1,971 in income per month to qualify for the payments. However, that rule is changing slightly.

Starting September 30, food benefits will no longer be considered in the eligibility income for SSI. That means programs like the Supplemental Nutrition Assistance Program will no longer be able to bar an individual from getting Social Security payments.

“The decision to not count food benefits towards eligibility will expand not just the amount of those who can receive SSI, but also potentially add support to those who already do,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.

“For years, food has counted as unearned income, which reduces the amount of support recipients receive from SSI. Eliminating it as pertaining to eligibility will help give additional funding to some individuals who have seen their benefits lowered in the past because of it.”

Under the current rules, food and housing benefits could count as unearned income, subsequently lowering the amount you can receive in benefits. Once the new rule is in effect, it could open up the door to more Americans earning the benefits each month or increase the amount current beneficiaries qualify for.

The average SSI payment is $943 monthly, but that number could go up after the new food benefits rule changes. As Americans are still facing an inflation rate of 2.9 percent as of July, the boost in benefits could make a substantial impact on SSI beneficiaries.

“In our current economy of inflated prices, that extra amount could go away,” Beene said. “It’s a huge win for SSI recipients both present and future.”

Next Year’s Payments

Social Security benefits grew by 3.2 percent this year, based on the cost-of-living adjustment (COLA). However, experts cautioned that seniors and those with disabilities shouldn’t expect a COLA as high next year.

The American Association of Retired Persons (AARP) predicted next year’s COLA will be between 2.75 percent and 3.25 percent to account for inflation.

However, long before the lower COLA was predicted, analysts have brought up concerns that the current calculation for the COLA doesn’t accurately reflect rising costs for seniors.

“Whether the annual COLA is appropriate for a specific retiree to ensure equal purchasing power as the prior year is highly specific to the life situation of the individual retiree, both in terms of expenses and other sources of income,” Jonathan Price, national retirement practice leader at employee benefits consulting firm Segal, previously told Newsweek.