Yes, SSDI recipients received a COLA increase in 2020

Social Security Disability Insurance (SSDI) recipients did receive a cost of living adjustment (COLA) in 2020. The adjustment was 1.3 percent, effective December 2019 for benefits paid in January 2020 and beyond. This meant that if you received SSDI in 2020, your monthly payment was higher than it had been in 2019.

The 1.3 percent increase was smaller than the adjustments in some previous years. For context, the 2019 COLA had been 2.8 percent, and the 2018 COLA had been 2.0 percent. The 2020 adjustment reflected the slower inflation rate measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) during the period used to calculate it.

COLA adjustments happen automatically each year if there has been any inflation at all. You do not need to do anything to receive the increase — Social Security applies it to your account and your new payment amount begins the following January.

Key Takeaways

  • The 2020 COLA for SSDI was 1.3 percent, meaning monthly payments increased by that percentage starting in January 2020.
  • COLA adjustments are automatic and based on inflation measured by the Consumer Price Index, not on individual circumstances or requests.
  • The 2020 adjustment was smaller than the 2019 adjustment (2.8 percent) because inflation was lower during the measurement period.
  • You receive the new payment amount automatically in January; no action is required on your part.

How the 2020 COLA was calculated

Social Security calculates COLA each year using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). 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 there is any increase, that percentage becomes the COLA.

For 2020, the third quarter 2019 CPI-W average was compared to the third quarter 2018 average. The result was a 1.3 percent increase. This calculation method is the same every year and applies to all Social Security beneficiaries — retirees, disabled workers, and survivors — not just SSDI recipients.

The CPI-W measures price changes for a specific group of workers and their families. It includes food, housing, transportation, medical care, and other goods and services. Because it reflects what actually costs more in the real world, the COLA is meant to help benefits keep pace with inflation.

When the 2020 increase took effect

The 2020 COLA became effective in January 2020. Social Security announced the adjustment in October 2019, and the new payment amount appeared in beneficiaries' accounts starting with the January 2020 payment. If you received SSDI in 2020, you saw the 1.3 percent increase reflected in your January check or direct deposit.

The timing is consistent every year: Social Security announces the COLA in October, and it takes effect the following January. This gives the agency time to process the change across millions of accounts and gives beneficiaries notice of what to expect.

What the 2020 increase meant in dollars

The actual dollar amount of the 2020 increase varied depending on what you were receiving in 2019. A person receiving $1,000 per month in 2019 would have received $1,013 per month starting in January 2020. Someone receiving $1,500 per month would have received $1,519.50 per month. The increase was proportional to the benefit amount.

The 1.3 percent increase was modest compared to some years, but it still meant more money each month for millions of SSDI recipients. For people living on a fixed income, even a small increase can matter for covering rent, food, or medical costs.

How 2020 COLA compared to other years

The 2020 COLA of 1.3 percent was one of the smaller adjustments in recent history. The previous five years had been: 2019 (2.8 percent), 2018 (2.0 percent), 2017 (0.3 percent), 2016 (0.0 percent), and 2015 (1.7 percent). In 2016, there was no COLA at all because inflation was flat.

COLA amounts fluctuate based on inflation in the economy. Years with higher inflation produce larger COLAs, and years with lower inflation produce smaller ones. The 2020 adjustment reflected the fact that inflation was modest during the measurement period, even though prices for some items like healthcare and housing were rising faster than the overall average.

Frequently Asked Questions

Did I have to do anything to get the 2020 COLA increase?

No. The COLA increase was applied automatically to your account. Social Security does not require you to take any action to receive it. Your new payment amount straightforward began in January 2020.

Was the 2020 COLA the same for everyone on SSDI?

Yes, the 1.3 percent increase applied to all SSDI recipients. However, the dollar amount of the increase varied based on what each person was receiving. A higher monthly benefit meant a larger dollar increase.

Why was the 2020 COLA smaller than 2019?

COLA is based on inflation measured by the Consumer Price Index. Inflation was lower during the third quarter 2019 measurement period than it had been during the third quarter 2018 measurement period, so the 2020 COLA was smaller than the 2019 COLA.

Does COLA increase happen every year?

COLA happens every year if there is any inflation at all. In years with no inflation or deflation, there may be no COLA. For example, 2016 had a 0.0 percent COLA because inflation was flat.