The 2021 SSDI payment increase was 1.3 percent

In October 2020, the Social Security Administration announced that SSDI payments would rise by 1.3 percent starting in January 2021. This increase, called a Cost of Living Adjustment (COLA), happens once per year and is based on inflation data from the previous months. The 1.3 percent figure was lower than increases in prior years because inflation remained relatively flat in 2020.

If you received SSDI in 2020, your January 2021 payment was 1.3 percent higher than your December 2020 amount. For example, someone receiving $1,200 per month in December 2020 would have received approximately $1,216 per month starting in January 2021. The exact dollar increase depended on your individual payment amount, which varies based on your work history and the age at which you became disabled.

The COLA applies to all SSDI recipients automatically — you do not need to request it or take any action. The increase appears in your bank account or payment method on the third day of the month, the same day regular SSDI payments arrive.

Key Takeaways

  • SSDI payments increased by 1.3 percent in January 2021, the annual Cost of Living Adjustment based on inflation from the prior year.
  • The increase was applied automatically to all SSDI recipients; no request or action was required.
  • Your specific dollar increase depended on your individual payment amount, which is based on your work history.
  • COLA increases happen once per year in January and are announced by the Social Security Administration in October of the prior year.

How the COLA is calculated each year

The COLA percentage is determined by comparing inflation data from July, August, and September of one year to the same three months in the previous year. The Social Security Administration uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to measure inflation. If prices rose during that period, the COLA goes up; if prices stayed flat or fell, the COLA remains at zero (payments do not decrease).

The announcement always comes in October, and the new payment amount takes effect the following January. This means the 2021 COLA of 1.3 percent was based on inflation data from mid-2019 and mid-2020, announced in October 2020. The timing is fixed — you will always know your new payment amount by mid-October for the following January.

Why 2021's increase was smaller than previous years

The 1.3 percent COLA in 2021 was one of the smallest in recent history. From 2008 to 2020, COLA increases ranged from zero percent (in 2010, 2011, and 2016) to 5.8 percent (in 2008). The 2021 increase was low because inflation, as measured by the CPI-W, remained low throughout 2019 and 2020.

Economic conditions, energy prices, and wage growth all affect the inflation rate that determines COLA. When the economy slows or prices for goods and services do not rise significantly, the COLA stays small. Conversely, when inflation picks up — as it did in 2021 and 2022 — the COLA announced for the following year increases.

What your 2021 payment included if you also received SSI

If you received both SSDI and Supplemental Security Income (SSI), the COLA applied to both payments. However, SSI has a resource limit (the amount of money and assets you can own), and the COLA does not change that limit. Your SSDI increase was separate from any SSI payment you received, and both increased by the same 1.3 percent.

Some people receive SSDI based on their own work record and also receive SSI because their SSDI payment falls below the federal benefit rate. In those cases, the SSI portion may have adjusted differently depending on your state's rules and your specific circumstances, but the SSDI portion itself increased by 1.3 percent across the board.

How to find out what your 2021 payment was

Your Social Security statement, available through your my Social Security account online, shows your payment history month by month. You can log in at ssa.gov, go to "My Social Security," and view your payment record to see exactly what you received in January 2021 and how it compared to December 2020.

If you do not have a my Social Security account, you can create one using your Social Security number, email address, and a phone number. Once logged in, select "Benefit Verification" to see your payment amounts by month. This record is also useful if you need to verify your income for taxes, housing information, or other programs.

COLA increases in the years after 2021

The 2021 COLA of 1.3 percent was followed by larger increases in subsequent years. In 2022, the COLA was 5.9 percent — the largest increase since 1982 — because inflation rose significantly in 2021. In 2023, the COLA was 8.7 percent, the highest in four decades. These larger increases reflected the rapid inflation that occurred in the economy during 2021 and 2022.

COLA increases vary year to year and depend entirely on inflation data. There is no way to predict the exact percentage in advance, though the Social Security Administration publishes historical COLA amounts and the inflation data behind them. If you want to understand how your payment might change in future years, reviewing the historical trend can give you a general sense of the range, though it cannot predict what inflation will do.

Frequently Asked Questions

Did I have to do anything to get the 2021 COLA increase?

No. The COLA is applied automatically to all SSDI recipients. You did not need to contact Social Security, submit a form, or take any action. The increase appeared in your payment on the third day of January 2021.

What if I started receiving SSDI after January 2021?

If your SSDI began in February 2021 or later, your first payment already included the 1.3 percent COLA. The increase is built into the current payment rate, so new recipients do not receive a separate adjustment — they receive the post-COLA amount from the start.

Does the COLA increase affect Medicare or Medicaid?

The COLA does not change your Medicare coverage or cost. If you receive Medicaid, the increase in your SSDI payment might affect your Medicaid status depending on your state's income limits, but this varies by state. Contact your state Medicaid office if you are unsure how the payment increase affects your coverage.

Can I see the COLA history for past years?

Yes. The Social Security Administration publishes COLA amounts for every year since 1975 on its website at ssa.gov. You can also view your own payment history in your my Social Security account to see how your payments changed year to year.