Social Security and SSI Disability and Benefit Amounts for 2021

By , Attorney

The Social Security Administration has announced a 1.3% increase in Social Security and Supplemental Security Income (SSI) benefits for 2021, a slightly smaller cost-of-living increase (COLA) than the year before. Increased payments to Social Security recipients begin in January 2021, while increased payments to SSI recipients will be included in their checks or deposits on December 31, 2020. Other numbers regarding eligibility for disability and average benefits have also changed for 2021.

Social Security and SSI Benefit Amounts

The new SSI federal base amount is $794 per month for an individual and $1,191 per month for a couple. The SSI payment amounts are higher in states that pay a supplementary SSI payment.

While exact Social Security retirement and disability benefit amounts depend on the lifetime earnings of the recipient, here are the average benefit amounts anticipated for 2021:

  • average retirement benefit: $1,543 (an increase of $20)
  • average disability benefit: $1,277 (an increase of $16)
  • average widow's or widower's benefit: $1,453 (an increase of $19).

The maximum Social Security retirement benefit that can be collected at full retirement age is $3,148 per month in 2021, though few people are able to collect this amount.

Note that, for some Social Security recipients, the small 1.3% increase may be partially offset by increases in Medicare Part B premiums, particularly for retirees with high income. But because Medicare premiums are anticipated to increase significantly due to COVID-19 costs, Congress has voted to cap increases to Medicare premiums this year. As a result, the Part B premium is expected to increase only by an estimated $4 per month.

Eligibility for Disability and Working

An applicant for disability benefits through the Social Security disability insurance (SSDI) or SSI programs must be making less than $1,310 per month (up from $1,260 per month in 2021) to qualify for benefits. (Blind applicants can make up to $2,190 per month). Anyone working above those limits is considered to be doing "substantial gainful activity" (SGA).

However, people who are currently receiving SSDI who attempt to return to work can make more during a trial work program. A month counts as a trial work period month when an SSDI recipient makes more than $940 per month (up from $910 per month in 2020).

For people who are receiving SSI, the new federal income limit for SSI is $794 per month, but complicated rules govern what income is countable and what income is not. Over half of the income made by an SSI recipient is not counted toward the limit, so you can actually receive SSI until you make up to $1,672 per month (if you have no other income). However, any income received between $0 and $1,672 will reduce the monthly benefit. (For instance, if you earn $1,500 a month and have no other income, your SSI check will be only $86.50.) In some states that make extra payments to SSI recipients, the income limit for SSI recipients may be higher.

The income exclusion amount for students receiving SSI is now $1,930 per month (up to an annual limit of $7,770).

Early Retirement and Working

Those who collect early retirement benefits but continue to work have their benefits reduced when they make over $18,960 per year ($1,580 per month). But in the year a recipient reaches full retirement age, he or she can make up to $4,210 per month without having retirement benefits taken away. (After the worker reaches full retirement age, benefits aren't reduced at all, regardless of the amount of work or earnings.) Any early retirement benefits deducted while you were working, however, are added back to your retirement check over the next 10-15 years.

Amount of Social Security Taxes Withheld

The maximum amount of earnings that is subject to the Social Security tax is $142,800 in 2021, up from $137,700 in 2020. There is no limit to the amount of income subject to the Medicare tax.

The Social Security figures and limits for 2020 can be found in the 2020 COLA update.

Effective date: Jan 01, 2021