What changed in 2023

In January 2023, Social Security raised the monthly payment for everyone receiving SSDI by 8.7 percent. This was the largest increase in four decades. The raise happened automatically—you did not have to do anything to receive it, and it applied to your check whether you were already collecting or started collecting that month.

The increase was tied to the Cost of Living Adjustment, or COLA. Every year, Social Security looks at inflation from the previous year and raises all benefit payments by the same percentage. The 8.7 percent jump in 2023 reflected how much prices had risen in 2022.

This means if you were receiving $1,000 per month in December 2022, your January 2023 payment became $1,087. The exact dollar amount you received depended on your individual benefit calculation, which is based on your work history and age when you started collecting.

Key Takeaways

  • Every SSDI recipient's payment increased by 8.7 percent starting in January 2023, with no action required on your part.
  • The increase was a Cost of Living Adjustment (COLA) meant to keep payments in line with inflation from the previous year.
  • Your new payment amount depended on what you were receiving before the increase—there is no single dollar figure that applies to everyone.
  • The 2023 increase was the largest in 40 years because inflation in 2022 was unusually high.

How the COLA is calculated

Social Security calculates the COLA using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks what people actually pay for food, housing, transportation, and other goods. The Social Security Administration looks at the average CPI-W for the third quarter of each year (July, August, September) and compares it to the same three months from the previous year.

If prices went up, everyone's benefit goes up by that same percentage. If prices stayed flat or fell, benefits stay the same—they never decrease. This happened in 2016, when there was no COLA increase at all.

The 8.7 percent increase in 2023 was announced in October 2022, giving Social Security time to reprogram systems and notify recipients before the January payment arrived. You received a notice in the mail showing your old payment amount and your new one.

What the 2023 increase meant for different recipients

The percentage increase was the same for everyone—8.7 percent—but the dollar amount varied widely. Someone receiving $600 per month saw their payment rise by about $52. Someone receiving $3,000 per month (the maximum for a worker in 2023) saw their payment rise by about $261.

Family members receiving benefits on your record also received the same 8.7 percent increase. If your spouse or child was collecting a portion of your benefit, their payment went up by 8.7 percent too. The total amount Social Security pays out on your record cannot exceed a certain limit, but the COLA applies to everyone before that limit is calculated.

If you were working and your earnings reduced your benefit (a rule called the earnings test), the COLA still applied to your full benefit amount first. The earnings reduction was then calculated on top of the higher number.

When the 2023 increase took effect

The increase appeared in your bank account or check in January 2023. If you receive direct deposit, the new amount hit your account on your regular payment date in January. If you receive a paper check, it arrived in early January with the new amount.

You did not need to contact Social Security or take any steps to receive the increase. It was automatic for every person on the SSDI rolls. If you started collecting SSDI in January 2023 or later, your initial benefit calculation already included the higher payment level.

How COLA affects your future benefits

Each year, Social Security announces a new COLA percentage based on inflation from the previous year. In 2024, the COLA was 3.2 percent. In 2025, it was 2.5 percent. These numbers change year to year depending on how much prices rose.

Your benefit amount never goes backward—it only stays the same or increases. Even if inflation is low or zero in a given year, you keep the payment you received the previous year. This means the 2023 increase of 8.7 percent became your new baseline, and future increases are calculated on top of that higher amount.

If you are still working and earning income, the earnings test may reduce your benefit in any given year, but the COLA increase still applies to your underlying benefit amount. Once you reach full retirement age (which is different from the age you started collecting SSDI), the earnings test no longer applies.

Why 2023 was unusual

The 8.7 percent increase was historically large. For comparison, the average COLA over the past 20 years has been around 2 to 3 percent. The 2023 increase was so high because inflation in 2022 was unusually high—prices for gas, food, housing, and other essentials rose sharply that year.

High inflation is difficult for people on fixed incomes, which is why the COLA exists. Without it, the purchasing power of your benefit would shrink every year as prices rose. The COLA is meant to keep your benefit roughly in line with the cost of living, though it does not always match exactly what you personally spend.

Frequently Asked Questions

Do I have to do anything to get the 2023 increase?

No. The increase was automatic and applied to everyone receiving SSDI in January 2023. You received a notice in the mail showing your old and new payment amounts, but you did not need to contact Social Security or take any action.

What if I started collecting SSDI after January 2023?

Your initial benefit calculation used the higher payment level that was in effect when you started. You did not receive the 8.7 percent increase as a separate event because your benefit was already calculated at the new rate.

Does the COLA increase explore if I'm working and my benefit is reduced?

Yes. Social Security calculates your full benefit amount first, applies the COLA increase to that amount, and then reduces it based on your earnings. The increase applies to your underlying benefit before any earnings reduction is subtracted.

Will my benefit increase again in 2024 and beyond?

Yes, but by a different percentage each year. The COLA is announced every October for the following January. In 2024 it was 3.2 percent, and in 2025 it was 2.5 percent. The percentage depends on inflation from the previous year.

Can my benefit ever decrease?

No. Your benefit amount never goes down from year to year. If there is no inflation in a given year, your payment stays the same as the previous year. It only increases or stays flat—it never decreases.