What the 2023 COLA 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 2023, unless you were also receiving Supplemental Security Income (SSI), which had different rules.

The 8.7% figure applied to your full benefit amount. If you received $1,000 per month in 2022, you received $1,087 per month starting January 2023. The increase was automatic — you did not have to request it or contact Social Security.

Not everyone saw the same dollar increase. The amount you gained depended on what you were already receiving. Someone on a higher benefit received a larger dollar raise than someone on a lower benefit, even though the percentage was the same for all.

Key Takeaways

  • The 2023 COLA raised all SSDI payments by 8.7%, effective January 2023, with no action required on your part.
  • Your new payment amount was 8.7% higher than what you received in December 2022, calculated on your full benefit before any deductions.
  • If you also received SSI, your SSI payment increased by 8.7%, but the combined total was subject to the SSI resource and income limits for 2023.
  • The 2023 COLA was based on inflation data from the third quarter of 2022 and was announced in October 2022.

How Social Security calculated the 2023 increase

Social Security uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to set the COLA each year. The agency compares 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 year.

For 2023, the CPI-W showed inflation of 8.7% when comparing the third quarter of 2022 to the third quarter of 2021. Social Security announced this figure in October 2022, giving beneficiaries advance notice before the increase took effect on January 1, 2023.

The COLA applies to your primary insurance amount — the base benefit you are may have access to to before any reductions. If you had a work history that may have access to you for SSDI, your primary insurance amount increased by 8.7%. Any family members receiving benefits on your record also saw their payments increase by the same percentage.

What changed in your January 2023 payment

Your first payment of 2023, received in early January, reflected the 8.7% increase. If you had any ongoing deductions — such as workers' compensation offset, child support withholding, or overpayment recovery — those deductions were applied to your new, higher amount.

If you were receiving both SSDI and SSI, the SSI portion also increased by 8.7%. However, SSI has a resource limit (the amount of money and assets you can own) and an income limit. For 2023, the SSI resource limit was $2,000 for an individual and $3,000 for a couple. If the COLA increase pushed your total income above the SSI limit, your SSI payment might have been reduced or eliminated, even though your SSDI payment increased.

Social Security sent a notice in December 2022 or early January 2023 showing your new payment amount. If you did not receive a notice, you could view your payment details through your my Social Security account online or call 1-800-772-1213.

COLA increases for family members on your record

If you had a spouse, ex-spouse, or children receiving benefits based on your work record, they also received the 8.7% increase in January 2023. Each family member's payment went up by the same percentage, though the dollar amount of the increase varied depending on what they were already receiving.

Family members do not receive the full amount of your benefit. Instead, Social Security calculates a separate benefit for each family member, usually between 25% and 50% of your primary insurance amount. The 8.7% COLA applied to each of those individual amounts.

If your family's total benefits exceeded the family maximum (a cap on the total amount all family members can receive combined), Social Security reduced each family member's payment proportionally to stay within the maximum. The family maximum also increased by 8.7% in 2023, so the total available to your family went up as well.

How the 2023 COLA compared to previous years

The 8.7% increase in 2023 was significantly larger than the increases of the previous few years. In 2022, the COLA was 5.9%. In 2021, it was 1.3%. In 2020, it was 1.7%. The 2023 increase reflected a sharp rise in inflation during 2022, particularly in housing, food, and energy costs.

The 8.7% figure was the largest COLA since 1981, when the increase was 11.2%. Most beneficiaries had not seen an increase this large in their lifetime. The size of the 2023 COLA meant that the purchasing power of SSDI payments recovered some ground after years of smaller increases that had not kept pace with inflation.

Reporting the increase to other programs

If you received other benefits or services based on your income — such as Medicaid, SNAP (food information), housing information, or other state or local programs — the increase in your SSDI payment may have affected your status in those programs. Some programs count SSDI income when determining whether you remain within their income limits.

You were responsible for reporting the change to those programs if they required it. The timing and method of reporting varied by program. Some programs automatically received updates from Social Security, while others required you to report the change yourself. If you were unsure whether to report the increase, you could contact the program directly or ask your case manager.

The increase did not automatically disqualify you from other programs, but it may have changed the amount of information you received. For example, if you received housing information, your rent contribution might have increased based on your higher SSDI income.

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. Social Security sent you a notice showing your new payment amount, but you did not need to request the increase or contact Social Security to receive it.

What if I was receiving SSI as well as SSDI in 2023?

Both your SSDI and SSI payments increased by 8.7%. However, SSI has strict income and resource limits. If the increase pushed your total income or resources above the 2023 limits, your SSI payment could have been reduced or stopped, even though your SSDI payment went up. You would have received a notice explaining any change to your SSI.

Did family members on my record get the same percentage increase?

Yes. Each family member receiving benefits on your work record received an 8.7% increase to their individual benefit amount in January 2023. The dollar amount of the increase varied depending on what they were already receiving, but the percentage was the same for everyone on your record.

How does the COLA get decided each year?

Social Security compares inflation data from July through September of one year to the same months of the previous year using the Consumer Price Index for Urban Wage Earners and Clerical Workers. If inflation occurred, that percentage becomes the COLA for the following year. The 2023 COLA of 8.7% was based on inflation measured between the third quarter of 2021 and the third quarter of 2022.

Will I see a COLA increase in 2024?

Whether there is a COLA in 2024 depends on inflation data from July through September 2023. Social Security announces the COLA for the following year in October. If inflation occurred during that period, beneficiaries receive an increase in January of the following year. If there was no inflation, there is no COLA that year.