The 2023 SSDI increase was 8.7 percent

In October 2022, the Social Security Administration announced that SSDI payments would increase by 8.7 percent starting in January 2023. This was the largest increase in four decades. The increase applied to everyone receiving SSDI, as well as to people on Social Security retirement and Supplemental Security Income (SSI).

The 8.7 percent figure came from the Cost of Living Adjustment (COLA) formula, which measures inflation using the Consumer Price Index. Because inflation was unusually high in 2022, the COLA for 2023 was much larger than the typical year-to-year increase, which usually falls between 1 and 3 percent.

If you were receiving SSDI in December 2022, your January 2023 payment reflected this increase automatically. You did not need to do anything to receive it. The Social Security Administration sent notices to all beneficiaries in December 2022 showing the new payment amount.

Key Takeaways

  • The 2023 COLA increased SSDI payments by 8.7 percent for all recipients, effective January 2023.
  • This increase was automatic and applied to your account without any action on your part.
  • The 8.7 percent figure was calculated using the Consumer Price Index and reflected inflation from the previous year.
  • You received a notice in December 2022 showing your new payment amount, which you can use to update your budget and plan for the year ahead.

What the 8.7 percent increase meant for actual payments

The dollar amount of your increase depended on what you were receiving before January 2023. Someone receiving $1,000 per month would have seen an increase of $87 per month. Someone receiving $1,500 per month would have received an additional $130.50 per month. The increase was proportional to your existing payment.

The exact new amount appeared on the notice Social Security sent you in December 2022. If you did not receive a notice, or if the amount seemed wrong, you could contact Social Security directly by phone at 1-800-772-1213 (TTY 1-800-325-0778) to confirm your new payment amount.

Why the 2023 increase was larger than usual

The COLA is tied to inflation, measured by the Consumer Price Index. In 2022, prices for groceries, gasoline, housing, and other essentials rose sharply. This pushed the inflation rate higher than it had been in decades, which in turn made the 2023 COLA larger than typical.

Most years, the COLA falls between 1 and 3 percent because inflation is usually modest. The 8.7 percent increase in 2023 was exceptional. The year before, in 2022, the COLA had been 5.9 percent—also well above average. These two consecutive large increases reflected the broader economic conditions of 2021 and 2022.

How the COLA is calculated each year

The Social Security Administration compares the Consumer Price Index for the third quarter of the current year to the Consumer Price Index for the third quarter of the previous year. That percentage difference becomes the COLA for the following January.

For the 2023 COLA, Social Security looked at inflation data from July, August, and September 2022 and compared it to the same months in 2021. The difference was 8.7 percent. This calculation happens automatically every year, and Congress does not vote on or approve the COLA—it is set by formula.

When you received the increase

The increase took effect on January 1, 2023. If you received SSDI payments by direct deposit, the new amount appeared in your bank account on your regular payment date in January. If you received a check, the January check reflected the higher amount.

The increase applied to your ongoing payments from that point forward. It did not include a lump-sum payment for the months between December 2022 and January 2023—the increase straightforward changed the amount of your regular monthly payment starting in January.

How the 2023 increase affected other benefits

If you were receiving both SSDI and SSI, both payments increased by 8.7 percent. If you were receiving SSDI and your family members were receiving benefits on your record (such as a spouse or child), their payments also increased by the same percentage.

If you were receiving SSDI and also receiving Medicare, the increase in your SSDI payment did not change your Medicare premiums for 2023. Social Security has a rule called the "hold harmless" provision that prevents your Medicare Part B premium from rising faster than your COLA increase, which protected many beneficiaries from premium increases in 2023.

Frequently Asked Questions

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

No. The increase was automatic. If you were receiving SSDI in January 2023, the higher payment amount was deposited or mailed to you without any action on your part. You only needed to check the notice Social Security sent in December 2022 to confirm the new amount.

What if I thought the increase was wrong?

You could contact Social Security at 1-800-772-1213 (TTY 1-800-325-0778) to verify your new payment amount. Have your Social Security number and the notice from December 2022 available when you call. A representative could confirm whether the amount was correct.

Does the COLA increase happen every year?

Yes, but the size varies. The COLA is calculated every year using inflation data. Some years the increase is small (1 to 2 percent), and some years it is larger. There have been years with no increase at all. The 8.7 percent increase in 2023 was unusually large because inflation was unusually high in 2022.

If I started SSDI after January 2023, did I get the increased amount?

Yes. Your initial SSDI payment was calculated using the benefit formula in effect in 2023, which already reflected the 8.7 percent COLA. You received the higher amount from the start, not a lower amount plus a retroactive increase.