On October 10, 2024, the Social Security Administration (SSA) announced that Social Security benefits and Supplemental Security Income (SSI) payments for more than 72.5 million Americans will increase by 2.5 percent in 2025.
On average, Social Security retirement benefits will increase by about $50 per month starting in January.
The COLA increase has averaged about 2.6 percent over the last decade. According to the SSA, it was 3.2 percent in 2024.
Social Security beneficiaries will see a 2.5 percent cost-of-living adjustment (COLA) beginning in January 2025. Increases for SSI beneficiaries will begin on December 31, 2024.
“Social Security benefits and SSI payments will increase in 2025, helping tens of millions of people keep up with expenses even as inflation has started to cool,” said Martin O’Malley, Commissioner of Social Security.
What this means for Low-income Housing Owners and Agents
If owners or agents have not implemented new HOTMA requirements related to COLA increases, they should refer to HH 4350.3 Paragraph 9-6 when creating Annual Recertifications effective before 4/1/2025.
They should also:
- Use the current value shown on the EIV Income Report (which will be updated in December)
- Use a 2025 award letter showing the change (can be used for the entire year)
- Use Streamlined Verification of the new award amount by taking the 2024 award amount and applying the COLA.
- If you have adopted Streamlined Determination of Fixed Income and are in Year 2 or Year 3 of Streamlining, you need only print the COLA Announcement, attach it to the EIV printout or last year’s award letter, and calculate the 2025 benefit amount.
- Correcting completed 2025 Annual Recertifications to incorporate this change is not required unless the household income increase is at least $200 per month (pre-HOTMA).
- Alternatively, owners/agents may implement the new HOTMA requirement to include the 2025 COLA the day after it is announced for any incomplete certifications effective in the new award year (2025). Remember, HUD has specified that if an owner/agent has implemented a HOTMA change, the owner/agent must document the tenant file.
- For new move-ins and Initial Certifications, effective after the COLA increase is announced, owner/agents should use the current SS income for the remainder of 2024 and incorporate the COLA increase for the appropriate months in 2025.
More From the SSA for Individuals
The SSA continued by saying that some other adjustments that take effect in January of each year are based on the increase in average wages.  Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) is slated to increase to $176,100 from $168,600.
To learn more, please visit www.ssa.gov/cola.
