FAQ Friday: Social Security/SSI COLA
QUESTION I see that the Social Security Administration (SSA) has announced the 2018 cost of living adjustment (COLA). We are currently processing annual reexaminations which will be effective January 1, 2018. However, our clients have not yet received 2018 award letters for Social Security (SS) or SSI, and the EIV system is still showing the 2017 benefit amounts. Can we wait for updated documentation or must we apply the COLA beginning with January reexaminations?
ANSWER Yes, you must apply the COLA beginning with January reexaminations which have not yet been completed. The SSA announced on October 13 that the Social Security and supplemental security income (SSI) benefits will increase 2 percent in 2018. HUD has issued guidance on applying the SSA COLA in Notice PIH 2012-10:
Effective the day after SSA has announced the COLA, PHAs are required to factor in the COLA when determining SS and SSI annual income for all annual reexaminations and interim reexaminations (in accordance with PHA-established policy) of family income which have not yet been completed and will be effective January 1st or later of the upcoming year.
To factor in the COLA, multiply the current benefit amount by the percentage increase. For example, imagine that you are processing a January reexam for Mr. Miller. The EIV printout shows current SS benefits of $1000 per month and Mr. Miller agrees with this amount. To project annual income for 2018:
- Multiply the current benefit amount by the percentage increase: $1000 X 2% [or 0.02] (COLA rate) = $20 COLA
- New gross SS benefit effective 01/01/2018 = $1020 ($1000 current benefit + $20 COLA)
- Annual income effective 1/1/2018: $1020 X 12 = $12,240
- Alternatively, you could multiply the current benefit by 102%
Document your calculation on the EIV report or case narrative. Leave a clear audit trail showing how you arrived at annual income shown on form HUD-50058.
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