SSDI payments increase each year based on a formula tied to inflation

Yes, SSDI payments typically increase each year. The amount of the raise depends on how much prices rose during the previous year. This yearly increase is called a Cost of Living Adjustment, or COLA. It is not automatic in the sense that you do not have to do anything to receive it — Social Security calculates it and applies it to your account.

For 2025, the COLA was set at 3.2 percent based on inflation data from 2024. This means if you received $1,000 per month in December 2024, your January 2025 payment would be approximately $1,032. The exact amount depends on your individual benefit calculation, which is based on your work history and the age at which you started receiving benefits.

The COLA applies to all SSDI recipients at the same time, usually in January. You will see the new amount on your payment stub or in your online account. Social Security also sends a notice in December showing what your new payment will be starting in January.

Key Takeaways

  • SSDI payments increase each January by a percentage set by Social Security based on inflation from the previous year.
  • The 2025 COLA is 3.2 percent, meaning most recipients will see their payments rise by that amount starting in January.
  • You do not need to do anything to receive the raise — it is applied automatically to your account.
  • The exact dollar amount of your raise depends on what you were receiving in the previous month.
  • Social Security sends a notice in December each year showing your new payment amount for January.

How the COLA is calculated each year

Social Security uses a specific measure of inflation to decide the COLA. The measure is called the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. It tracks the cost of goods and services that people buy — food, housing, transportation, medical care, and other everyday expenses.

Social Security looks at the average CPI-W for the third quarter of each year (July, August, and September) and compares it to the average for the same three months in the previous year. If prices went up, there is a COLA. If prices stayed the same or went down, there is no COLA that year, though this is rare.

The COLA is the same percentage for everyone receiving SSDI, Supplemental Security Income (SSI), or Social Security retirement benefits. A person receiving $500 per month and a person receiving $3,000 per month both receive the same percentage increase, so the dollar amounts of their raises are different.

What your new payment amount means for your budget

The COLA is meant to help your benefits keep pace with inflation, so your money does not lose value as prices rise. However, the COLA does not always match the actual inflation you experience. Some costs — like healthcare or housing — may rise faster than the overall inflation rate that determines the COLA.

If you receive other benefits, such as Medicaid or housing information, a COLA increase to your SSDI payment might affect those programs. Some programs count your income and reduce their payments if your income goes up. You should contact your state Medicaid office or your housing information program to ask whether a COLA increase will change what you receive from them.

If you work and receive SSDI, the COLA increase does not change the earnings limit. You can still earn up to a certain amount per month without losing benefits. That limit also increases each year, but it is set separately from the COLA.

When you will see the 2025 increase in your account

The 2025 COLA takes effect in January 2025. If you receive your SSDI payment by direct deposit, the new amount will appear in your bank account on your regular payment date in January. If you receive a paper check, it will arrive with the new amount.

Social Security sends a notice called the Social Security Benefit Statement in December of each year. This notice tells you what your new monthly payment will be starting in January. You can also check your payment amount by logging into your my Social Security account online at ssa.gov, or by calling Social Security at 1-800-772-1213.

If you notice that your January payment is not what the notice said it should be, contact Social Security right away. Errors are uncommon, but they do happen, and Social Security can correct them.

How COLA has changed over recent years

The COLA varies from year to year because it is based on actual inflation. In recent years, the COLA has ranged from as low as 0 percent (in 2010 and 2011, when prices did not rise) to as high as 8.7 percent in 2023, when inflation was high. In 2024, the COLA was 3.2 percent. These changes mean your payment amount does not grow at the same rate every year.

Some years the COLA is smaller than people expect, and some years it is larger. This is because Social Security cannot predict inflation in advance — the COLA is always based on what actually happened in the previous year. Once the COLA is set in October of each year, it does not change.

Frequently Asked Questions

Do I have to do anything to get the COLA increase?

No. Social Security calculates the COLA and applies it to your account automatically. You will receive the new payment amount in January without taking any action. You should receive a notice in December showing what your new payment will be.

What if I disagree with the COLA amount or my new payment?

The COLA percentage is set by law and applies to everyone. If you believe your new payment amount is wrong, contact Social Security at 1-800-772-1213 or visit your local Social Security office. They can review your account and correct any errors.

Will the COLA increase affect my other benefits like Medicaid?

It may. Some programs count your income and reduce their payments if your SSDI payment goes up. Contact your state Medicaid office or housing information program to ask how a COLA increase affects your benefits with them.

Can I find out what next year's COLA will be before January?

Social Security announces the COLA for the following year in October. You can find the announcement on the Social Security website at ssa.gov or by calling 1-800-772-1213. The COLA is based on inflation data and cannot be changed once it is announced.