The 2023 SSDI payment increase

In 2023, Social Security raised monthly payments by 8.7 percent — the largest increase in four decades. This bump happened because of a cost-of-living adjustment (COLA), which Social Security calculates each year based on inflation. The exact dollar amount you received depended on your work history and when you started receiving benefits, not on the percentage itself.

If you were receiving SSDI in December 2022, your January 2023 payment automatically increased by that 8.7 percent. You did not have to do anything to get it. Social Security sent a notice in December showing your new payment amount.

The average SSDI payment in January 2023 was around $1,350 per month, but this varied widely. Someone who had worked for many years before becoming disabled typically received more than someone who became disabled early in their career. The payment you saw reflected your specific earnings record, not a standard amount.

Key Takeaways

  • Social Security raised all SSDI payments by 8.7 percent in January 2023 through an automatic cost-of-living adjustment.
  • The dollar amount of your increase depended on what you were receiving in December 2022, not on a fixed number everyone got.
  • You received the new payment automatically with no action required on your part.
  • The average monthly payment was around $1,350, but your actual amount reflected your work history before you became disabled.
  • Each year Social Security recalculates the adjustment based on inflation that year, so 2024 and beyond had different percentages.

How Social Security calculates the yearly increase

Social Security does not decide the COLA amount. Instead, it uses a formula tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which the U.S. Bureau of Labor Statistics publishes. If inflation went up between the third quarter of one year and the third quarter of the next, that percentage becomes the COLA.

In 2023, inflation had been high throughout 2022, so the CPI-W showed a large jump. That is why the 8.7 percent increase was unusually large. In other years when inflation is lower, the COLA is smaller — sometimes just 1 or 2 percent. If inflation actually fell, there would be no increase, though this has happened only a few times in Social Security's history.

The COLA applies to everyone on SSDI, Supplemental Security Income (SSI), and retirement benefits at the same time, every January. It is the same percentage for all three programs.

What your 2023 payment included

Your January 2023 SSDI payment was your December 2022 amount multiplied by 1.087. If you were receiving $1,200 in December, your January payment became $1,304.40. If you were receiving $1,500, it became $1,630.50. The increase was applied to whatever you had been getting, regardless of how long you had been on SSDI.

If you were also receiving benefits as a family member — for example, your child was on your SSDI record — their payment increased by the same percentage. If your spouse was receiving a reduced retirement benefit on your SSDI record, theirs increased too.

The increase also applied to your Medicare premiums if you were on SSDI. However, Social Security has a rule called the Government Pension Offset that can reduce or eliminate your spouse's benefit if they receive a government pension. The COLA increase did not change how that rule worked.

Increases in other years and how they compare

The 8.7 percent increase in 2023 was notably high because inflation spiked in 2022. In 2022, the COLA was 5.9 percent. In 2021, it was 1.3 percent. In 2020, it was 1.7 percent. These numbers show how much the adjustment varies year to year.

For comparison, the average COLA over the past 20 years has been around 2.5 percent. The 8.7 percent in 2023 was well above that average, which is why many people noticed the increase more than usual.

The 2024 COLA was 3.2 percent, and the 2025 COLA was 2.5 percent. Each year's adjustment is announced in October for the following January, so you can see what increase is coming before it takes effect.

Who receives the COLA increase

Everyone on SSDI receives the COLA increase automatically. You do not have to be working, have a certain income level, or meet any other condition beyond being on the SSDI rolls in December. The increase happens whether you are 25 or 85, whether you became disabled yesterday or 30 years ago.

If you are on both SSDI and SSI, you receive the COLA on both payments. If you are receiving SSDI as a disabled adult child on a parent's record, you get the increase. If you are receiving SSDI as a widow or widower, you get the increase. The only people who do not receive it are those who are not yet on SSDI — the increase does not affect the amount you would receive if you started SSDI in the future.

Why the 2023 increase mattered for your budget

An 8.7 percent increase sounds large, but whether it helped your actual situation depended on your expenses. If your rent, food, and utilities had also risen by 8.7 percent or more, the increase just kept you even. If they had risen less, the increase gave you a small cushion. If they had risen more — which was true for many people in 2023 — you still fell behind.

The COLA is designed to prevent your purchasing power from shrinking, not to improve your standard of living. It is a protection against inflation, not a raise in the sense of earning more than you did before.

If the 2023 increase affected your income for purposes of other programs — such as Medicaid, housing information, or food stamps — you may have seen changes in those benefits. Some programs count the COLA increase as income and reduce your other benefits accordingly. Others have rules that protect you from losing benefits because of the COLA. The rules vary by state and program.

What to do if your 2023 payment seemed wrong

If your January 2023 payment did not increase by roughly 8.7 percent, or if you did not receive a notice explaining the new amount, contact Social Security. You can call 1-800-772-1213 (TTY 1-800-325-0778) or visit your local Social Security office.

Reasons your payment might not have increased by the full percentage include: you reached full retirement age and your benefit changed, you had earnings that triggered a work-incentive reduction, you were newly approved for SSDI and received your first payment in January, or there was an error in your record. Social Security can explain what happened to your specific payment.

Keep the notice Social Security sent you in December 2022. It shows your old payment amount and your new one, and it is the clearest proof of what you should be receiving.

Frequently Asked Questions

Does the COLA increase affect how much I can earn while on SSDI?

No. The COLA increase does not change the substantial gainful activity (SGA) limit, which is the amount you can earn per month before Social Security considers you no longer disabled. The SGA limit is set separately and does increase most years, but not necessarily by the same percentage as the COLA. In 2023, the SGA limit was $1,470 per month for non-blind individuals.

If I was denied SSDI before 2023, does the increase affect my chances if I reapply?

No. The COLA increase does not change the medical or non-medical rules for SSDI. It only affects the payment amount for people already receiving benefits. If you were denied, the reason you were denied has not changed unless your medical condition has improved or worsened, or your work history has changed.

Will my Medicare or Medicaid be affected by the payment increase?

Your Medicare premiums may be affected because they are deducted from your SSDI payment. Your Medicaid status depends on your state's rules. Some states count the COLA increase as income and may reduce or end your Medicaid; others protect Medicaid recipients from losing coverage because of the COLA. Contact your state Medicaid office to learn how the increase affects you.

What if I was in prison or a hospital during January 2023?

If you were in a public institution (prison, state hospital, or similar facility) in January 2023, your SSDI payment may have been suspended or reduced. The COLA increase still applied to your benefit amount, but you may not have received the full payment. Contact Social Security to confirm what you should have received.

How do I find out what my 2024 or 2025 COLA increase will be?

Social Security announces the next year's COLA in October. You can find the announcement on the Social Security website (ssa.gov) or call 1-800-772-1213. The announcement includes the percentage and the new average payment amount, though your personal increase depends on what you were receiving the previous December.