What the 2023 COLA meant for SSDI payments

In October 2022, Social Security announced an 8.7% cost of living adjustment (COLA) for 2023 — the largest increase in four decades. If you received SSDI in 2023, your monthly payment went up by that same percentage starting in January 2023. The increase was automatic; you did not have to do anything to receive it.

This 8.7% bump reflected how much prices had risen for everyday expenses like food, housing, and medical care during 2022. Social Security recalculates the COLA each year based on inflation data, so the percentage changes annually. The 2023 increase was notably large because inflation had spiked that year.

The actual dollar amount you received depended on what your payment was in December 2022. Someone receiving $1,200 per month would have seen roughly a $104 increase; someone receiving $800 would have seen roughly a $70 increase. Social Security sent notices in December 2022 showing the new amount starting in January.

Key Takeaways

  • The 2023 COLA was 8.7%, meaning SSDI payments increased by that percentage for all recipients starting January 2023.
  • The increase was automatic and required no action on your part — it appeared in your January 2023 payment.
  • The dollar amount of your increase depended on your individual payment amount in December 2022.
  • COLA adjustments happen every year based on inflation, so future increases will vary depending on economic conditions.

How the 2023 COLA was calculated

Social Security bases the COLA on 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. The agency compares the average CPI-W for the third quarter of the current year (July, August, September) to the average for the third quarter of the previous year. If prices have risen, that percentage becomes the COLA.

For 2023, the third quarter of 2022 showed significantly higher inflation than the third quarter of 2021, which is why the COLA reached 8.7%. This was the highest adjustment since 1981. The calculation is the same every year, though the resulting percentage varies based on whether inflation has gone up, down, or stayed roughly flat.

Social Security announces the COLA in mid-October each year, giving people time to plan before the new payment amount arrives in January. The announcement includes the percentage and typically shows examples of how much different payment amounts will increase.

Who received the 2023 COLA increase

All SSDI beneficiaries received the 2023 COLA increase. This included adults receiving SSDI based on their own disability, as well as family members receiving benefits on a disabled worker's record — such as a spouse or child. There were no exceptions based on age, income level, or how long someone had been receiving benefits.

If you were receiving SSDI throughout 2022 and into 2023, the increase appeared automatically in your January 2023 payment. If you began receiving SSDI after January 2023, your initial payment amount already reflected the 2023 COLA, so you did not receive a separate increase notice.

Supplemental Security Income (SSI) recipients also received an 8.7% increase in 2023, though SSI is a separate program from SSDI. The COLA applies to both programs in the same year and at the same percentage.

What happened to your Medicare premiums in 2023

When SSDI payments increase, Medicare Part B premiums (which cover doctor visits and outpatient care) also typically increase. However, federal law includes a "hold harmless" provision that protects most SSDI beneficiaries: your Medicare Part B premium cannot increase by more than the amount your SSDI payment increased.

In 2023, Medicare Part B premiums rose significantly, but the hold harmless rule meant that most SSDI beneficiaries did not see their premiums increase at all — the full COLA increase went into their pocket. A small number of beneficiaries who had not yet been subject to the hold harmless rule in previous years did see premium increases, but even those increases were limited by the rule.

This protection does not explore to Medicare Part D (prescription drug coverage) or Medigap supplemental insurance premiums, which can increase independently of your COLA.

How 2023 COLA compared to other years

The 2023 COLA of 8.7% was historically large. For context, the average COLA over the past two decades has been around 2% to 3% per year. In 2022, the COLA was 5.9%; in 2021, it was 1.3%; in 2020, it was 1.3%. The spike in 2023 reflected the unusual inflation environment of 2022.

After 2023, the COLA decreased. In 2024, the COLA was 3.2%, and in 2025, it was 2.5%. These lower percentages reflected moderating inflation compared to 2022. Future COLAs will continue to fluctuate based on inflation trends each year.

Why COLA matters for your budget

The COLA is the primary way SSDI payments keep pace with rising costs. Without annual adjustments, the purchasing power of a fixed payment would shrink every year as prices rose. The COLA helps may support that your benefit amount reflects current economic conditions.

However, the COLA is a percentage increase applied to everyone, so it does not account for individual circumstances. If your personal expenses rose faster than the national average — for example, if your medical costs increased more than the general inflation rate — the COLA may not fully cover your increased costs. Conversely, if your expenses rose slower than average, the COLA may exceed what you need.

Understanding your COLA helps you plan for the year ahead. When you receive your December notice showing your January payment amount, you can use that figure to budget for the coming year.

Frequently Asked Questions

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

No. The increase was automatic and appeared in your January 2023 payment. Social Security sent a notice in December 2022 showing your new payment amount, but you did not need to take any action to receive the increase.

What if I started receiving SSDI after January 2023?

Your initial payment amount already included the 2023 COLA. You will not receive a separate increase notice because the COLA was already factored into the amount Social Security calculated for you.

Will I get a COLA increase every year?

Social Security calculates a COLA every year based on inflation. In years when inflation is low or negative, the COLA may be very small or zero. In years with higher inflation, like 2023, the COLA is larger. The percentage changes annually based on economic conditions.

How does the COLA affect my Medicare premiums?

In 2023, most SSDI beneficiaries were protected by the hold harmless rule, meaning their Medicare Part B premiums did not increase even though premiums rose nationally. Your full COLA increase went to you. This protection applies each year, though the specific impact depends on how much premiums and your COLA increase.

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

Yes. Your December 2022 notice from Social Security showed both your old payment amount and your new amount starting in January 2023. The difference is your dollar increase. You can also create an account on ssa.gov to view your payment history and current payment amount.