2026 Social Security COLA Announced

On October 24, 2025, the federal government announced the Social Security 2026 Cost of Living Adjustment (COLA) at 2.8% effective January 1, 2026. Individuals who receive SS (Social Security) will receive a mailing in late November or early December indicating their new benefit amount.

This increase affects all federal benefits (SS, Supplemental Security Income [SSI], Civil Service Pensions, Railroad Retirement and Veteran’s benefits).

Managers of affordable housing properties are required to determine income for eligibility and need to begin using this increase now in projecting income for applicants and residents. Failing to accurately calculate anticipated income using the newly announced COLA is a frequent compliance issue. It is very important when moving a new household into your site that they are income eligible.

Some important things to remember when calculating the increase and documenting the tenant file are as follows:

1. A copy of the official Social Security COLA increase letter needs to be in the tenant file.
2. Any move-in that would be scheduled for October 24, 2025, or later must project annual household income using the 2026 COLA for federal income benefits that are affected by this increase.
3. Tenant Recertifications that have not been signed or dated prior to October 24, 2025, must include the 2026 COLA in the income calculation.

For example, a November 1, 2025, recertification that has NOT been completed on or before October 24, 2025, this includes being signed and dated by both the owner and the tenant, will need to include the 2026 COLA.

However, a recertification for November 1, 2025, that has been completed, including being signed and dated by both the owner and tenant prior to October 24, 2025, no changes are needed to the Tenant Income Certification.  (This is a huge advantage to properties that complete their recertifications early in the 120-day recertification period.)

4. The calculation is done, as follows for a Move-In or Recertification that has an effective date of November 1, 2025:

• Multiply current monthly benefit X 2 (this is the first 2 months in the certification year – November & December)
• Calculate current monthly benefit X 2.8% (2026 COLA)
• Add amount of increase into the current monthly benefit
• Multiply new monthly benefit X 10 (months remaining in certification period—January through October 2026)
• Add the 2 months at the current rate + 10 months at the new rate = Projected Annual Income from November 1, 2025 to October 31, 2026.

EXAMPLE:

Current rate is $809.50.

$809.50 X 2 = $1619.00 income for November 1, 2025 & December 31, 2025

$809.50 X 2.8% (increase) = $22.67 + $809.50 = $832.17 new monthly benefit

$832.17 X 10 months = $8321.70 income January 1, 2026 through October 31, 2026

$1619.00 + 8321.70 = $9940.70 Projected Annual Income

If the move-in or recertification effective date is December 1, 2025, you would calculate 1 month at the current rate and 11 months at the new rate.

Move-Ins and Recertifications with an Effective Date of January 1, 2026, and later, will use 12 months at the new rate.

Creating and maintaining affordable housing communities is a complex task.  Numerous state and federal requirements must be followed – both during development and for years thereafter. We clarify LIHTC, Federal HOME, HUD, and certification requirements you must follow to remain compliant.  For more information on these services be sure to visit our Property Compliance page and don’t hesitate to contact us.

 

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