SSDI payments rose in 2020, but the increase was smaller than in previous years

Social Security Disability Insurance (SSDI) payments increased by 1.6 percent in 2020. This was the annual cost-of-living adjustment, or COLA, that the Social Security Administration applies each year to all benefit payments. The 2020 raise meant that if you received $1,000 per month in December 2019, you received $1,016 per month starting in January 2020.

The size of your COLA depends on inflation data collected by the Bureau of Labor Statistics. When inflation is low, the COLA is low. When inflation is high, the COLA is higher. The 2020 increase of 1.6 percent was lower than the 2.8 percent increase in 2019 and much lower than the 5.9 percent increase in 2008, when inflation spiked.

Your payment amount also depends on your work history and the age at which you began receiving benefits. Two people receiving SSDI in 2020 could have very different monthly amounts, even though they both received the same 1.6 percent raise.

Key Takeaways

  • SSDI payments increased by 1.6 percent in January 2020, which means a $1,000 monthly payment became $1,016.
  • The COLA is calculated using inflation data and changes each year—it was lower in 2020 than in 2019 because inflation was lower.
  • Your individual payment amount depends on your earnings record, not on the size of the COLA, so the raise affects everyone differently in dollar terms.
  • Social Security sends a notice each December showing your new payment amount for January, so you can see your raise before it arrives.

How the COLA is calculated and announced

The Social Security Administration calculates the COLA using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This index tracks the cost of goods and services that working people buy—food, housing, transportation, medical care. If the average cost of these items goes up from one year to the next, the COLA goes up. If costs stay flat or fall, the COLA can be zero or very small.

Social Security announces the new COLA in October, and the raise takes effect in January. In October 2019, the agency announced that 2020 would bring a 1.6 percent increase. By mid-December 2019, you would have received a notice in the mail showing your new payment amount starting January 2020.

You do not have to do anything to receive the raise. It happens automatically. If you have direct deposit set up, the new amount appears in your bank account on the third day of January (or the next business day if January 3 falls on a weekend). If you receive a paper check, it arrives in the mail around the same time.

Why your payment amount varies even with the same COLA

The 1.6 percent COLA in 2020 applied to every person receiving SSDI. But the dollar amount of your raise depended on what you were already receiving. If your monthly payment was $800, your 1.6 percent raise was about $13. If your payment was $2,000, your raise was about $32.

Your payment amount itself is based on your earnings record—the wages you earned and the Social Security taxes you paid before you became unable to work. Someone who worked for 30 years at high wages receives a higher SSDI payment than someone who worked for 10 years at lower wages. Both receive the same percentage COLA, but the dollar amounts are different.

If you are receiving SSDI as a dependent or survivor (for example, as the child of a worker who receives SSDI), your payment is calculated as a percentage of the worker's benefit amount. Your COLA is the same percentage as everyone else's, but your dollar amount reflects your relationship to the worker.

When the COLA does not explore

In some years, there is no COLA at all. This happens when inflation is zero or negative—when the cost of living stays the same or falls. From 2009 to 2011, there was no COLA for three consecutive years because inflation was very low after the financial crisis. People receiving SSDI in those years saw no increase in their monthly payments.

If you began receiving SSDI in 2020, you did not receive the 1.6 percent raise until January 2021. Your first payment reflects your benefit amount based on your earnings record, and you receive the COLA for the first time in the year after you start.

Supplemental Security Income (SSI), which is a different program from SSDI, also receives a COLA each year. The SSI COLA in 2020 was also 1.6 percent, but SSI payment amounts are different from SSDI amounts because SSI is based on financial need rather than work history.

How to find your 2020 payment amount

Social Security mailed a notice to every SSDI recipient in December 2019 showing the new payment amount for 2020. This notice, called the "Notice of Benefit Amount," lists your monthly payment starting January 2020 and explains the 1.6 percent increase.

If you did not receive this notice or cannot find it, you can create a my Social Security account online at ssa.gov. Log in and select "Benefit Verification Letter" to see your current payment amount. You can also call Social Security at 1-800-772-1213 (TTY 1-800-325-0778) and speak to a representative who can tell you your payment amount.

If you receive SSDI through a representative payee—someone who manages your benefits on your behalf—the notice goes to the payee's address, not yours. Ask your payee to show you the notice or to tell you your new payment amount.

COLA history and what it means for future years

The COLA varies significantly from year to year. Here are some examples: 2019 was 2.8 percent, 2018 was 2.0 percent, 2017 was 0.3 percent, and 2016 was zero. The highest COLA in recent decades was 5.9 percent in 2008. The lowest was zero in multiple years.

There is no way to predict what the COLA will be in future years because it depends on inflation, which is not fixed. If inflation rises, the COLA will be higher. If inflation stays low, the COLA will be lower. Social Security does not control this number—it is determined by economic conditions and the Consumer Price Index.

Some people have proposed changing how the COLA is calculated, but as of 2020, the method described here is how it works. Any change to the COLA formula would require an act of Congress.

What happens if you work while receiving SSDI

If you are working and receiving SSDI, the COLA still applies to your benefit payment. However, your total monthly income may affect how much of your SSDI you actually receive. Social Security has rules about how much you can earn before your benefits are reduced or stopped.

In 2020, if you were under full retirement age, Social Security reduced your SSDI by $1 for every $2 you earned above $18,240 per year. If you reached full retirement age during 2020, the reduction was $1 for every $3 you earned above $48,600 until the month you reached full retirement age. These dollar amounts change each year and are tied to inflation.

The COLA increase to your benefit amount does not change these earnings limits. It only changes the base amount of your payment before any reductions are applied.

Frequently Asked Questions

Did everyone receiving SSDI get the same dollar amount raise in 2020?

No. Everyone received the same 1.6 percent increase, but the dollar amount depended on what they were already receiving. Someone getting $1,000 per month received a $16 raise, while someone getting $2,000 per month received a $32 raise. The percentage is the same; the dollars are different.

What if I did not receive a notice about the 2020 COLA?

Check your mail again—Social Security mailed notices in December 2019. If you still cannot find it, log into your my Social Security account at ssa.gov or call 1-800-772-1213. A representative can tell you your payment amount and explain the increase.

Does the COLA explore if I am receiving SSDI as a dependent?

Yes. If you receive SSDI as a dependent or survivor, you receive the same 1.6 percent COLA in 2020. Your payment is calculated as a percentage of the worker's benefit, so your dollar amount may be different from the worker's, but the percentage increase is the same.

Will there be a COLA in 2021?

Social Security announces the COLA for the following year in October. In October 2020, the agency announced the 2021 COLA. The amount depends on inflation data collected through September 2020. You will receive a notice in December 2020 showing your new payment amount for January 2021.

Can I get back pay if I was not receiving SSDI in 2020 but started later?

No. The 2020 COLA applied only to people receiving SSDI in January 2020. If you began receiving SSDI in 2021 or later, your first payment is based on your benefit amount and the COLA that was in effect when you started. You do not receive the 2020 raise retroactively.