Disability payments increase once per year, tied to the cost of living

Social Security Disability Insurance (SSDI) payments rise automatically each January if inflation has occurred during the prior year. The increase is called a Cost-of-Living Adjustment (COLA). The amount you receive in January will be higher than what you received in December of the previous year—or it will stay the same if there was no inflation to account for.

The COLA is calculated by the Social Security Administration using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a measure of inflation published by the U.S. Bureau of Labor Statistics. In October of each year, Social Security announces what the COLA percentage will be for the following January. This percentage is applied to your current payment amount.

You do not need to do anything to receive the increase. It happens automatically. Your new payment amount will appear in your January benefit check or direct deposit.

Key Takeaways

  • SSDI payments increase each January by a percentage that matches inflation from the prior year, announced in October.
  • The increase is automatic—you do not need to contact Social Security or submit any paperwork.
  • If there is no inflation, there is no COLA, and your payment stays the same as the previous year.
  • The COLA affects your SSDI payment, your family members' benefits on your record, and your Medicare premiums if you are enrolled.

How the COLA percentage is determined

The COLA is based on the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of one year to the third quarter of the next. Social Security compares July, August, and September prices to the same months in the prior year. If prices have risen, the percentage increase becomes the COLA. If prices have fallen or stayed flat, the COLA is zero.

The announcement happens in mid-October each year. Social Security publishes the COLA percentage on its website and sends notices to beneficiaries. The new payment amount takes effect on the first day of the month following the announcement, which is always January.

COLA percentages vary widely year to year. Recent years have seen COLAs ranging from zero percent (in 2010 and 2011) to 8.7 percent (in 2023). The percentage depends entirely on inflation in the economy during that measurement period, not on any decision made by Social Security or Congress.

What the COLA affects and what it does not

The COLA increases your primary insurance amount—the monthly payment you receive as a disabled worker. It also increases the benefits paid to your spouse, ex-spouse, children, and parents if they receive benefits on your record. Everyone on your record gets the same percentage increase.

The COLA also affects your Medicare Part B and Part D premiums if you are enrolled. Most people with SSDI become enrolled in Medicare after two years of receiving benefits. When the COLA increases your SSDI payment, your Medicare premiums may increase as well, though there is a rule called "hold harmless" that protects most beneficiaries from seeing their net payment (SSDI minus premiums) decrease in any given year.

The COLA does not affect Supplemental Security Income (SSI), which is a different program. SSI has its own annual increase tied to the same COLA percentage, but SSI is a needs-based program with resource limits, whereas SSDI is an earned-benefit program.

When you will see the increase in your payment

The increase appears in your January payment. If you receive direct deposit, the new amount will be deposited on your regular payment date in January. If you receive a paper check, it will arrive with the new amount. You will also receive a notice from Social Security in December showing your new payment amount and explaining the COLA increase.

Some beneficiaries receive payments on different dates within the month depending on their birth date. The COLA applies to all of them in January, regardless of which week they are paid.

If you are also receiving Medicare, your new Medicare premium will take effect in January as well. Your SSDI payment will be reduced by the new premium amount, so your net payment may be different from what you expect if you do not account for the premium change.

What happens if you work while receiving SSDI

The COLA increase applies to your SSDI payment regardless of whether you are working. If you are using a work incentive such as the Trial Work Period or Extended may be able to access Period, your payment still increases in January. The increase does not affect your work incentive status or the rules around how much you can earn.

However, if you are earning above the Substantial Gainful Activity (SGA) level—the income threshold that can cause your benefits to stop—the COLA increase does not change that threshold. The SGA level itself increases each year, but on a different schedule than the COLA. The SGA increase is announced in late October or early November and takes effect in January as well.

Understanding the difference between COLA and other payment changes

A COLA is not the same as a benefit review or a work-related payment adjustment. If Social Security reviews your case and determines that your medical condition has improved, your payment could decrease even if a COLA occurred. If you return to work and your earnings exceed the SGA level, your benefits could stop. These are separate from the automatic COLA increase.

Similarly, if you have a change in your living situation—for example, if you move in with someone else or receive in-kind support and maintenance—your SSDI payment might change. Again, this is separate from the COLA. The COLA is a blanket increase applied to all beneficiaries at the same time, while other changes are case-specific.

If you receive a notice from Social Security about a payment change in January, read it carefully to understand whether the change is due to the COLA, a case review, a work-related adjustment, or something else.

Frequently Asked Questions

Will I always get a COLA increase?

No. If there is no inflation during the measurement period (July through September), the COLA will be zero percent and your payment will not increase. This happened in 2010, 2011, and 2016. It is rare but possible.

Can I find out what my new payment will be before January?

Yes. Social Security publishes the COLA percentage in October. You can multiply your current payment by the COLA percentage to estimate your new amount. Your official notice from Social Security in December will show the exact new payment.

Does the COLA increase affect my Medicaid or other means-tested benefits?

It may. Medicaid and other means-tested programs have resource and income limits. A COLA increase to your SSDI payment could push your income above a limit and affect your other benefits. Contact your state Medicaid office or the program administrator to understand how the increase affects you.

What if I disagree with my new payment amount?

Contact Social Security to verify the calculation. You can call 1-800-772-1213 or visit your local Social Security office. Bring your December notice showing your old payment and your January notice showing your new payment. Social Security can explain the calculation and correct any errors.

Does the COLA explore if I am receiving benefits as a family member on someone else's record?

Yes. If you receive benefits as a spouse, ex-spouse, child, or parent on someone else's SSDI record, your payment increases by the same COLA percentage as the primary beneficiary's payment.