What the 2023 COLA increase meant for SSDI payments

In October 2022, the Social Security Administration announced an 8.7% cost of living adjustment (COLA) for 2023. This was the largest increase in four decades. If you received SSDI in 2023, your monthly payment went up by 8.7% starting in January of that year.

The actual dollar amount of your increase depended on what you were receiving in December 2022. Someone getting $1,000 per month would have received an additional $87 per month starting January 2023. Someone getting $1,500 would have received an additional $130.50. The increase was automatic — you did not have to do anything to receive it.

This COLA was tied directly to inflation. The Social Security Administration calculates COLA each year based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures how prices change for everyday goods and services. Because inflation was exceptionally high in 2022, the 2023 COLA was unusually large.

Key Takeaways

  • The 2023 COLA increased SSDI payments by 8.7%, the largest increase since 1983.
  • Your new payment amount started automatically in January 2023 with no action required on your part.
  • The increase was based on inflation measured through the previous year and affected all SSDI recipients the same percentage.
  • COLA amounts change every year and are announced in October for the following year.

How the 2023 COLA was calculated

Social Security calculates COLA by comparing the average Consumer Price Index (CPI-W) for the third quarter of the current year to the average CPI-W for the third quarter of the previous year. For 2023, they compared July through September 2022 to July through September 2021. The difference between those two periods was 8.7%.

This method means COLA is never a fixed amount — it changes based on real inflation data. In years when inflation is low, COLA is low or sometimes zero. In 2023, inflation had been high enough that the adjustment was substantial. The same 8.7% applied to everyone receiving SSDI, regardless of how much they were getting or where they lived.

The announcement happens every October, and the new payment amount takes effect the following January. This timing gives the Social Security Administration time to process the change across millions of accounts before the new year begins.

What changed in your monthly payment

If you were receiving SSDI throughout 2022 and into 2023, you saw the increase reflected in your January 2023 payment. Your bank account or payment method received the higher amount automatically. You did not need to contact Social Security, submit paperwork, or take any steps to make this happen.

The increase applied to your full SSDI benefit amount. If you also received other benefits — such as Supplemental Security Income (SSI) or benefits as a family member on someone else's record — those amounts also increased by 8.7% if they were subject to COLA. However, SSI has its own separate COLA calculation, so the percentage increase for SSI may have been different.

If you started receiving SSDI after December 2022, your first payment already included the 2023 COLA in the calculation. You would not receive a separate increase notice because the higher amount was built into your initial benefit from the start.

Why 2023 was different from other years

The 8.7% increase in 2023 was exceptional. The previous large COLA was 5.9% in 2022. Before that, COLA increases had been much smaller — often between 1% and 3% annually. The 2023 increase reflected the rapid inflation that occurred throughout 2021 and 2022, when prices for housing, food, energy, and other essentials rose sharply.

This large increase meant that SSDI recipients saw a meaningful boost to their purchasing power after years of smaller adjustments. Even with the 8.7% increase, many recipients still faced challenges affording housing, medical care, and other necessities, since prices had risen so much that the adjustment did not fully catch up to the cost increases.

How COLA affects your work incentives and benefits

If you were working while receiving SSDI in 2023, the COLA increase applied to your benefit amount just as it did for everyone else. The increase did not change your work incentive programs or the earnings limits that determine whether you can continue receiving benefits. Those rules remained the same.

However, the higher benefit amount did mean you had more income to count against the Substantial Gainful Activity (SGA) limit if you were in a trial work period or using other work incentives. The SGA limit itself also increased with COLA, so the two moved together. In 2023, the SGA limit was $1,470 per month for non-blind individuals and $3,822 for blind individuals.

COLA announcements and future increases

Social Security announces the next year's COLA in October of each year. The announcement is public, and you can find it on the Social Security Administration website. The increase takes effect the following January for all beneficiaries.

COLA is not may provide to increase every year. In 2009 and 2010, there was no COLA because inflation was flat or negative. In most other years, COLA has been positive but small. The 2023 increase was unusual because inflation was unusually high. Future COLA amounts will depend on inflation in the coming years.

If you want to know what your COLA increase will be for the following year, you can check the Social Security Administration's official announcement each October, or you can create a my Social Security account online to see your benefit information and receive notifications about changes.

Frequently Asked Questions

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

No. The increase was automatic and applied to your account in January 2023 with no action required. You straightforward received the higher payment amount in your regular payment method.

What if I started receiving SSDI in 2023?

Your initial benefit amount already included the 2023 COLA. You would not receive a separate increase notice because the higher amount was calculated into your first payment from the beginning.

Does COLA work the same way for SSI as it does for SSDI?

SSI has its own separate COLA calculation, so the percentage increase may differ from SSDI. In 2023, SSI also received an 8.7% increase, but this is not always the case. Both programs use inflation data, but the timing and calculation method can produce different results.

Will there be another COLA increase in 2024?

Yes, Social Security announces a COLA for every year. The 2024 COLA was announced in October 2023 and took effect in January 2024. The amount depends on inflation data from mid-2023 and differs from the 2023 increase.

How do I find out what next year's COLA will be?

Social Security announces the next year's COLA in October. You can find the announcement on the official Social Security Administration website, or you can check your my Social Security account online for notifications about benefit changes.