Social Security raises disability benefit amounts once per year, based on a formula tied to wage growth across the economy

The Cost of Living Adjustment (COLA) is the annual increase to Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) payments. It is not a decision made by Congress each year—it is calculated automatically using data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If wages and prices have risen, your benefit rises with them. If the index shows no growth or decline, there is no increase that year.

The adjustment takes effect on January 1 each year. Social Security announces the COLA percentage in October of the prior year, so you know the change before it happens. For example, the 2024 COLA was 3.2 percent, announced in October 2023. The 2025 COLA was 2.5 percent, announced in October 2024. These percentages vary year to year depending on economic conditions.

Your new benefit amount appears on your January payment. If you receive SSDI, the increase is automatic—you do nothing. If you receive SSI, the increase is also automatic, though the rules around how much you can earn without losing benefits may shift slightly each year based on the new federal benefit rate.

Key Takeaways

  • The annual benefit increase is called COLA and is calculated by a formula tied to wage growth, not voted on by Congress.
  • Social Security announces the COLA percentage in October for the January increase that follows.
  • COLA varies year to year—some years it is 3 percent or higher, other years it is under 1 percent or zero.
  • You do not need to do anything to receive the increase; it is added to your January payment automatically.
  • The same COLA percentage applies to all SSDI and SSI recipients, regardless of when you started receiving benefits.

What the COLA is based on and why it changes

The COLA formula compares the average wage index from the third quarter of one year to the third quarter of the previous year. If that index has grown, Social Security calculates the percentage increase and applies it to all benefit amounts. The formula is set by federal law and does not change.

In years when the economy grows and wages rise, the COLA is higher. In years when wage growth is flat or negative, the COLA is lower or zero. For instance, 2009 and 2010 had zero COLA increases because of the recession. By contrast, 2022 saw an 8.7 percent increase because inflation and wage growth were high. The 2025 increase of 2.5 percent reflects more moderate wage growth.

This means your benefit amount is not fixed for life. It adjusts upward most years, but the size of the adjustment depends on economic conditions you cannot predict. When you plan your budget, assume the benefit will increase, but do not count on a specific percentage.

When the increase takes effect and how to verify it

The COLA increase is effective January 1 each year. If you receive direct deposit, the new amount appears in your bank account on the third day of January (or the first business day after if January 3 falls on a weekend). If you receive a check, it arrives in early January with the new amount.

You can verify your new benefit amount by logging into your my Social Security account at ssa.gov. Under "Benefit Verification," you will see your current monthly amount. You can also call Social Security at 1-800-772-1213 (TTY 1-800-325-0778) and ask a representative to confirm your January benefit amount.

Social Security also mails a notice in December showing your new benefit amount and explaining the COLA increase. If you do not receive this notice or if the amount shown does not match what you expected, contact Social Security before January to clarify.

How COLA affects your work incentives and earnings limits

If you are receiving SSDI and working, the COLA increase does not change your work incentive programs. The Substantial Gainful Activity (SGA) limit—the amount you can earn per month without losing your SSDI status—does increase each year based on COLA, but this is separate from your benefit amount. In 2025, the SGA limit is $1,550 per month (or $2,590 for blind beneficiaries). This limit changes annually.

If you receive SSI, the federal benefit rate (the maximum monthly payment) increases with COLA. This affects how much you can earn before your SSI payment is reduced. The reduction formula stays the same, but the starting point is higher. For example, if the federal benefit rate rises by 2.5 percent, your income exclusion and the amount you can earn before losing benefits also rise by 2.5 percent.

Work incentive programs like the Plan to Achieve Self-Support (PASS) and Impairment Related Work Expenses (IRWE) have their own rules and limits that may also adjust with COLA. If you are using either of these programs, ask your work incentive specialist whether your plan needs updating after the January increase.

What happens if you disagree with the COLA amount

You cannot appeal the COLA calculation itself—it is set by law and applied uniformly to all beneficiaries. However, you can request a benefit verification if you believe Social Security made an error in calculating your specific benefit amount after the increase.

If your January payment is lower than you expected or does not reflect the announced COLA percentage, contact Social Security when ready. Bring documentation of what you expected (such as your December benefit statement) and ask them to review the calculation. Errors do happen, and Social Security can correct them retroactively.

If Social Security confirms the amount is correct but you still disagree, you have the right to request reconsideration. This is a formal review of your case and is different from a standard appeal. Ask Social Security for Form SSA-561-U2 (Request for Reconsideration) or request the process by phone.

How COLA interacts with other income and benefits

If you receive both SSDI and SSI, the COLA increase applies to both payments. However, the way the increase affects your total monthly income depends on your state and your specific circumstances. Some states supplement the federal SSI rate, and those supplements may or may not increase with COLA—this varies by state.

If you receive SSDI and are also may be able to access for other benefits (such as veterans' benefits, workers' compensation, or a government pension), the COLA increase to your SSDI does not reduce those other payments. Each benefit program calculates its own COLA independently.

If you are receiving Supplemental Security Income (SSI) and have countable income from other sources, the COLA increase to your SSI benefit does not change how that other income is counted. Your SSI payment may decrease slightly if your other income stays the same, because the resource limits and income exclusions are recalculated each year based on the new federal benefit rate.

Planning your budget around future COLA increases

Because COLA varies year to year, you cannot predict your exact benefit amount more than a few months ahead. However, you can plan conservatively by assuming a modest increase (1 to 2 percent) rather than counting on a larger one. This protects you if a year has a lower COLA or if economic conditions change.

If you are working and using your SSDI benefits to supplement your income, track your total earnings carefully each year. When your SSDI benefit increases in January, your combined income rises—make sure this does not push you over any income limits for other programs you may be receiving (such as Medicaid or housing information).

If you manage a budget for a household member receiving SSDI or SSI, update your records in January to reflect the new benefit amount. This is also a good time to review whether your work incentive plan, if you have one, still fits your goals or needs adjustment.

Frequently Asked Questions

Can I get a larger increase than the standard COLA?

No. The COLA percentage is the same for all SSDI and SSI beneficiaries. You cannot request a higher increase, and Social Security does not grant individual exceptions. Your benefit increases by the announced COLA percentage, no more and no less.

What if I disagree with the COLA percentage announced by Social Security?

The COLA is calculated using a formula set by federal law. If you believe Social Security made an error in the calculation itself, you can contact your congressional representative, but you cannot appeal the COLA to Social Security. The percentage is not subject to individual review.

Does COLA explore if I am on a work incentive program like PASS?

Yes. Your SSDI benefit increases with COLA regardless of whether you are using a work incentive program. However, the limits and rules within your PASS or other work incentive plan may also adjust with COLA. Review your plan with your work incentive specialist after the January increase to confirm it still aligns with your goals.

Will my COLA increase affect my Medicaid or housing information?

It may. Some state Medicaid programs and housing information programs count your income to determine your continued may be able to access. When your SSDI or SSI benefit increases in January, your total income increases, which could affect those programs. Contact your Medicaid caseworker and housing authority in January to report the change.

How far back does COLA go if I just started receiving benefits?

COLA does not explore retroactively to new beneficiaries. You receive your approved benefit amount starting with your first payment. The next COLA increase (in January) applies to that amount. If you started receiving benefits in June, you do not receive a partial COLA for that year—you wait until January of the following year for your first increase.