Social Security Disability Insurance and Supplemental Security Income Updates for 2025

by Jesse Shirek

On October 10, 2024, the Social Security Administration (SSA) announced a 2.5 percent cost-of-living increase for 2025, and as you may expect, we have our traditional end-of-year updates for your review. But before we dig into those details, I would like to share some exciting news that illustrates the power of relationship-building in our movement. On December 18, 2023, Martin O’Malley was confirmed as the Commissioner of the Social Security Administration.

Commissioner O’Malley is very familiar with the National Federation of the Blind. Before he became Commissioner O’Malley, he was governor of the great state of Maryland from 2007 until 2015. Prior to being elected governor he was mayor of Charm City, otherwise known as the City of Baltimore, from 1999 until 2007. As you are probably imagining, he has been to our national headquarters on multiple occasions.
 
On August 14, 2024, we were invited to the White House to celebrate the eighty-ninth anniversary of the signing of the Social Security Act. I attended the celebration on behalf of the National Federation of the Blind. Social Security is one of my core portfolio priority areas working in our governmental affairs group. We are constantly trying to improve Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) benefits for blind Americans. I personally understand the struggles that blind beneficiaries face, as I received SSI as a young adult, and SSDI provided me the stability I needed when starting my professional career.
 
It should come as no surprise to you that the individual with the most decision-making authority within the Social Security Administration happens to be Commissioner O’Malley. It is very difficult to get a meeting with the Commissioner, so I feel privileged to share that I had a few minutes to speak with Commissioner O’Malley, painting for him a picture of the stories our members report to us regularly. He was very engaged in hearing about the problems that we are facing when we need to access SSA services. I talked about the letters our members receive every day from the Administration about insurmountable overpayments, which occur when SSA has paid beneficiaries more money in benefits than the beneficiary is qualified to receive. Typically, this is caused when a beneficiary begins working and earning income, especially when they receive SSI or SSDI. This can occur when crossing the substantial gainful activity threshold. It is not uncommon for an individual to learn that they owe $50,000, $60,000, or in some circumstances over $100,000 to the Social Security Administration as a result of an overpayment. The reasons are complex, but you should know that the SSA is underfunded and understaffed, which does not help the situation.

We do not believe that this approach is fair, especially when beneficiaries are attempting to earn a living and trying to get off of benefits. I mentioned to Commissioner O’Malley that we would like to see the Administration place a limit on the number of months or years it can look back into a beneficiary’s earnings to calculate overpayments. We should not suffer because the agency is understaffed and underfunded. The Commissioner is supportive and communicated that a change like this would require Congressional approval, which highlights the importance of our continued advocacy work. I ask you to please continue sharing the struggles that you face with the Social Security Administration, and please know that we are dedicated to continuing our work to bring resolution to the challenges faced by our members. Additionally, please keep in the back of your mind that building relationships with government officials is very important. You never know if the person you are speaking with is the next Commissioner of the Social Security Administration or perhaps the next Commissioner of the Rehabilitation Services Administration.

Annual Adjustments to the Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) Programs

In 2025, approximately seventy million Americans will see a 2.5 percent cost-of-living adjustment (COLA) increase in their benefit amounts. Thus, come January, monthly checks will be higher. The 2025 amounts are below, along with some general concepts pertaining to the Social Security and Medicare programs, in case you want to better understand or refresh yourself about your rights. The COLA is based on the consumer price index (CPI), which measures the rate of inflation against the wages earned by the approximately 173 million workers across the nation over the previous four quarters starting with the third quarter of the previous year.

Tax Rates

FICA and Self-Employment Tax Rates: If you are employed, you know that you do not bring home everything you earn. For example, 7.65 percent of your pay is deducted to cover your contribution to the Old Age, Survivors, and Disability Insurance (OASDI) Trust Funds and the Medicare Hospital Insurance (HI) Trust Funds: 6.2 percent covers OASDI, and 1.45 percent is contributed to the HI Trust Fund. Additionally, your employer is required to match this 7.65 percent for a grand total of 15.3 percent. 

For those who are self-employed, there is no “employer” to match the 7.65 percent, which means a self-employed individual pays the entire 15.3 percent of their income. These numbers will not change in 2025 regardless of whether an individual is employed or self-employed. In 2025, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9 percent in Medicare taxes; this does not include the above amounts.

Maximum Taxable Earnings

There is a ceiling on taxable earnings for the OASDI Trust Fund, which was $168,600 in 2024 and will increase to $176,100 in 2025. Thus, for earnings above $176,100, there is no 6.2 percent deducted for OASDI. As for Medicare, there is no limit on taxable earnings for the HI Trust Fund.

Social Security Disability Insurance (SSDI) Quarters of Coverage

The OASDI Trust Fund is kind of like an insurance policy. You have to pay a premium to participate. Therefore, to qualify for Retirement, Survivors, or Disability Insurance benefits, an individual must pay a minimum amount of FICA taxes into the OASDI Trust Fund by earning a sufficient number of calendar quarters to become fully insured for Social Security benefits.

In 2024, credit for one quarter of coverage was awarded for any individual who earned at least $1,730 during the year, which means that an individual would need to earn at least $6,920 to be credited with four quarters of coverage. In 2025, the amount increases to $1,810 for one calendar quarter or $7,240 to earn four quarters of coverage for the year.

A maximum of four quarters can be awarded for any calendar year, and it makes no difference when the income is earned during that year. Basically, the taxes you pay into the OASDI and HI Trust Funds are your premiums to take part in the Social Security and Medicare programs. The total number of quarters required to be eligible for benefits depends on the individual’s age. The older the individual, the more quarters are required. Furthermore, a higher average income during an individual’s lifetime means a higher Social Security or SSDI check when benefits start. Remember that the above quoted numbers for quarters of coverage to become fully insured are only minimum amounts. 

Trial Work Period (TWP)

This concept is often misunderstood. The amount of earnings required to use a trial work month is not based on the earnings limit for blind beneficiaries but instead on the national average wage index. In 2024, the amount required to use a TWP month was only $1,110, and this amount will increase to $1,160 in 2025. 

If you are self-employed, you can also use a trial work month if you work more than eighty hours in your business, and this limitation will not change unless expressly adjusted.

Substantial Gainful Activity (SGA) 

The earnings limit for a blind beneficiary in 2024 was $2,590 per month and will increase to $2,700 in 2025. Again, it is important to remember this is not the amount of money an individual makes to use a trial month. This is to say that the TWP can be exhausted even if your income is well below $2,700 per month. See the above information about the TWP.

In 2025 a blind SSDI beneficiary who earns $2,700 or more in a month (before taxes but after subtracting un-incurred business expenses for the self-employed, subsidized income for the employed, and impairment-related work expenses) will be deemed to have exceeded SGA and will likely no longer be eligible for SSDI benefits.

Supplemental Security Income (SSI)

The standard federal monthly payment amount for individuals receiving SSI was $943 in 2024 and will increase to $967 in 2025. For married couples, the standard federal monthly payment amount of SSI will increase from $1,415 to $1,450.

Student Earned Income Exclusion

In 2024, the monthly amount was $2,290 and will increase to $2,350 in 2025. The annual amount was $9,230 in 2024 and will be $9,460 in 2025. The asset limits under the SSI program will remain unchanged at $2,000 per individual and $3,000 per married couple. If you find yourself approaching the SSI asset limit, I urge you to continue reading the next section regarding ABLE Accounts.

If you have questions related to your SSI and SSDI benefits or if you are seeking help, contact Jesse Shirek by phone at 410-659-9314, extension 2348 or by email at [email protected].

ABLE Act

We are coming up on the ten-year anniversary of the signing of the Achieving a Better Life Experience (ABLE) Act, which became law on December 19, 2014. The ABLE Act has a significant impact on resource limits associated with the SSI and Medicaid programs for people who became blind or disabled by the age of twenty-six. Traditionally, SSI beneficiaries have been required to adhere to strict resource limits, such as a maximum of $2,000 in the bank for an individual receiving SSI benefits. However, under the ABLE Act the amount held in an ABLE Account can be much higher than the two-thousand-dollar resource limit. ABLE Account contributions must be designated specifically for purposes such as education, housing, employment training and support, assistive technology, health, prevention and wellness, financial management, legal fees, and funeral and burial expenses. Check with your financial institution of choice for the status of ABLE Act regulations in a specific state and to see if an ABLE Account is right for you.

It is important to note that SSI beneficiaries should consider the many other purposes not subject to the traditional resource limits when making ABLE Account contributions, since there are also tax advantages associated with ABLE Accounts. If you are seeking out more information about the topic of ABLE Accounts you can reach out to Government Affairs Specialist Jesse Shirek at 410-659-9314, extension 2348. Alternatively, visit https://www.ablenrc.org/.