The 2023 SSDI payment increase was 8.7 percent

Social Security announced in October 2022 that SSDI payments would increase by 8.7 percent starting in January 2023. This was the largest increase in four decades, driven by higher inflation throughout 2022. The increase applied to all SSDI beneficiaries automatically — you did not have to do anything to receive it.

The exact dollar amount of your increase depended on what you were receiving in December 2022. If you got $1,000 per month, your January 2023 payment became $1,087. If you got $1,500, it became $1,630.50. Social Security recalculated every individual benefit, so no two people's increases were identical in dollars, though the percentage was the same for everyone.

This increase is called a Cost-of-Living Adjustment, or COLA. Social Security calculates COLA each year based on inflation data from the third quarter (July, August, September) of the previous year. The 2023 COLA of 8.7 percent reflected the inflation that occurred during summer 2022.

Key Takeaways

  • The 2023 SSDI increase was 8.7 percent across all beneficiaries, with no action required on your part.
  • Your new payment amount depended on what you received in December 2022, multiplied by 1.087.
  • This increase was automatic and appeared in your January 2023 payment if you were receiving SSDI at that time.
  • COLA amounts change every year based on inflation data and are announced each October for the following January.

How the 2023 increase compared to previous years

The 8.7 percent increase in 2023 was unusually large. For context, the 2022 COLA was 5.9 percent, the 2021 COLA was 1.3 percent, and the 2020 COLA was 1.6 percent. Between 2010 and 2021, most years saw increases between 0 and 2 percent. The 2023 jump reflected a sharp rise in inflation during 2022 that affected prices for food, housing, utilities, and transportation.

Even with the 8.7 percent increase, many beneficiaries reported that their purchasing power had not kept pace with actual cost increases they experienced. Inflation continued into 2023 and beyond, so the gap between what SSDI covered and what things actually cost remained a concern for many recipients.

When you received the 2023 increase

If you were receiving SSDI in December 2022, the increase took effect in your January 2023 payment. You would have seen the higher amount deposited to your bank account or mailed as a check, depending on how you receive payments. Social Security sent notices in December 2022 telling beneficiaries what their new payment amount would be starting in January.

If you began receiving SSDI after December 2022, your first payment already included the 2023 COLA. You did not receive a separate increase notice because the 8.7 percent was already built into your initial benefit calculation.

Who received the 2023 SSDI increase

The 2023 COLA applied to all SSDI beneficiaries — adults with disabilities, children receiving benefits on a parent's record, and surviving spouses and children of deceased workers. It also applied to Supplemental Security Income (SSI) recipients, though SSI is a different program with different payment amounts.

The increase did not explore to people who had not yet been approved for SSDI. If you were waiting for a decision on your claim, the 8.7 percent increase would take effect once you were approved, but only if approval came in January 2023 or later. People approved in 2024 or beyond received the 2024 COLA instead.

How COLA is calculated each year

Social Security uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to determine COLA. Specifically, they compare the average CPI-W for July, August, and September of one year to the same three months of the previous year. If there is an increase, that percentage becomes the COLA for the following January. If there is no increase, COLA is zero — benefits do not decrease.

The 2023 COLA of 8.7 percent came from comparing summer 2022 prices to summer 2021 prices. The 2024 COLA was announced in October 2023 and was 3.2 percent, reflecting lower inflation during summer 2023 compared to summer 2022. Each October, Social Security announces the next year's COLA, so you can expect to hear about 2025's increase in October 2024.

What the 2023 increase meant for your other benefits

If you received Medicaid or food information (SNAP) in addition to SSDI, the increase in your SSDI payment may have affected those programs. Some states count SSDI income when determining Medicaid coverage or food information amounts. A higher SSDI payment could have reduced your Medicaid benefits or food information in some cases, though this varied by state and your specific situation.

If you were concerned about how the SSDI increase affected your other benefits, you could have contacted your state Medicaid office or your local SNAP office to ask. They could have explained whether the increase changed your coverage or information amounts. Some people found that the SSDI increase pushed them over an income limit and reduced other benefits, while others saw no change.

Frequently Asked Questions

Did I have to do anything to get the 2023 SSDI increase?

No. The increase was automatic. If you were receiving SSDI in December 2022, the higher payment appeared in your January 2023 deposit or check with no action required on your part. Social Security handled the calculation and adjustment for all beneficiaries.

What if I started receiving SSDI after January 2023?

Your first payment already included the 2023 COLA of 8.7 percent. You did not receive a separate increase because the percentage was already factored into your initial benefit amount. If you were approved in 2024 or later, you would receive the COLA that was in effect for that year instead.

Can I find out what my 2023 payment increase was in dollars?

Yes. Your Social Security statement shows your current payment amount. Compare it to what you received in December 2022 — the difference is your increase in dollars. You can also log into your my Social Security account online to view your payment history and see the exact amounts for each month.

Will there be another increase in 2024?

Yes. Social Security announced in October 2023 that the 2024 COLA would be 3.2 percent, effective January 2024. Each year brings a new COLA based on inflation data from the previous summer. The amount changes from year to year depending on how much prices rose during that period.

Does the SSDI increase affect my work incentives or trial work period?

No. The COLA increase does not change your trial work period, extended may be able to access period, or any work incentive programs you may be using. These are based on when you started receiving SSDI, not on your payment amount. Your work incentives remain the same regardless of COLA increases.