The 2023 COLA raised SSDI payments by 8.7 percent

The 2023 Cost of Living Adjustment (COLA) increased Social Security Disability Insurance (SSDI) payments by 8.7 percent, effective January 2023. This was the largest COLA increase in four decades, driven by inflation that peaked in 2022. The average SSDI payment rose from roughly $1,236 per month in 2022 to approximately $1,345 per month in 2023, though individual amounts varied based on each person's earnings history and the age at which they became disabled.

The 8.7 percent figure applied uniformly to all SSDI beneficiaries—there was no separate calculation by income level, state, or disability type. If you received SSDI in December 2022, your January 2023 payment reflected the full 8.7 percent increase. Supplemental Security Income (SSI) recipients, who receive a different federal payment, also received an 8.7 percent increase to their federal benefit rate, though SSI amounts are lower than SSDI and vary by state.

Key Takeaways

  • The 2023 COLA of 8.7 percent was the largest increase since 1982 and applied to all SSDI beneficiaries starting in January 2023.
  • Your actual dollar increase depended on your individual benefit amount, which is based on your work history and the age you became disabled, not on how much you need.
  • SSDI recipients received the increase automatically—no action was required, and no one had to reapply or contact Social Security.
  • The 8.7 percent increase also applied to the federal SSI payment rate and to the earnings limit under the Substantial Gainful Activity (SGA) rule.
  • COLA increases are announced in October of the prior year and take effect the following January, so the 2023 figure was known in October 2022.

How the 8.7 percent translated to actual monthly payments

Because SSDI payments are individual—based on your own work record, not a flat rate—the dollar amount of your increase varied. A person receiving $1,200 per month in December 2022 received an increase of about $104 per month. A person receiving $1,500 per month received an increase of about $130. Social Security sent a notice in December 2022 or early January 2023 showing the new payment amount, though many beneficiaries did not receive a separate letter if their address was already on file.

The increase applied to your primary insurance amount (PIA)—the base figure Social Security uses to calculate your SSDI payment. If you were receiving a reduced payment because you had work income or because you were under the full retirement age when you became disabled, the 8.7 percent was applied to your PIA first, then any reductions were recalculated. This meant that even beneficiaries with work incentives or age-related reductions saw their payments rise.

Why 2023 saw such a large increase

COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures inflation across food, housing, transportation, medical care, and other goods and services. The Social Security Administration announces the COLA in October based on the average CPI-W for July, August, and September of that year. In 2022, inflation was elevated due to supply chain disruptions, energy prices, and pandemic-related economic shifts, which pushed the CPI-W higher than it had been in decades.

The 8.7 percent COLA for 2023 was the largest since 1981, when COLA was 11.2 percent. For context, COLA had been 1.3 percent in 2022, 1.7 percent in 2021, and 0.3 percent in 2020. The sharp jump reflected real economic conditions, not a policy change. COLA is not discretionary—it is set by formula and applies to all Social Security beneficiaries, including retirees, survivors, and disabled workers.

The impact on work incentives and earnings limits

The 8.7 percent increase also raised the Substantial Gainful Activity (SGA) limit for 2023. SGA is the earnings threshold above which Social Security considers you to be working at a level that demonstrates you are not disabled. For non-blind disabled workers in 2023, the SGA limit was $1,470 per month (up from $1,350 in 2022). For blind individuals, the SGA limit was $3,822 per month (up from $3,580 in 2022).

This change meant that if you were testing your ability to work under a work incentive program, you could earn more before triggering a work-related review. The Trial Work Period (TWP) and Extended may be able to access Period (EEP) rules remained unchanged, but the dollar threshold at which Social Security reviews your case moved higher. If you were working and earning close to the 2022 SGA limit, the increase gave you additional room to earn without when ready losing SSDI benefits.

How COLA affects Medicare and Medicaid coverage

SSDI beneficiaries are automatically enrolled in Medicare after 24 months of receiving SSDI (or when ready if they have end-stage renal disease or ALS). The COLA increase did not change Medicare premiums for most beneficiaries in 2023—the Part B premium remained at $164.90 per month for most people, though higher-income beneficiaries paid more through Income-Related Monthly Adjustment Amounts (IRMAA). However, the increase in your SSDI payment could affect your IRMAA calculation in future years if your income crossed certain thresholds.

Medicaid coverage, which is administered by states, is not directly tied to COLA. However, some states use SSDI payment amounts to determine Medicaid income limits. In states with "1634" Medicaid programs (named after the federal statute), Medicaid coverage is tied to SSI income limits, which do rise with COLA. If you lived in such a state and received both SSDI and SSI, the COLA increase could have affected your Medicaid status, though most SSDI-only recipients were not directly affected.

When you would have seen the increase in your bank account

SSDI payments are issued on a schedule based on your birth date. Most beneficiaries receive payments on the second, third, or fourth Wednesday of each month. The first payment reflecting the 8.7 percent increase was issued in January 2023 according to your regular payment schedule. If you received your payment on the second Wednesday of January, you saw the increase then. If your payment date was later in the month, you received it on your regular date with the new amount.

Social Security mailed notices in December 2022 informing beneficiaries of the new payment amount, though the notices sometimes arrived after the first payment had already been deposited. If you did not receive a notice or if you wanted to verify the amount, you could log into your my Social Security account online or call the Social Security Administration at 1-800-772-1213 to confirm your 2023 payment amount.

Frequently Asked Questions

Did everyone on SSDI get the same 8.7 percent increase?

Yes, the 8.7 percent COLA applied to all SSDI beneficiaries. However, the dollar amount of the increase varied because SSDI payments are based on individual work histories. Someone receiving $1,000 per month received a smaller dollar increase than someone receiving $2,000 per month, even though both received the same 8.7 percent.

What if I was working and earning close to the SGA limit in 2022?

The SGA limit increased from $1,350 to $1,470 per month in 2023, giving you an additional $120 per month in earnings before Social Security would review your case for work-related reasons. If you were already earning above the 2023 SGA limit, you would need to contact Social Security to discuss your work incentive options, such as the Plan to Achieve Self-Support (PASS).

Does the COLA increase affect my Medicare premiums?

The Part B premium did not change for most beneficiaries in 2023, remaining at $164.90 per month. However, if your SSDI increase pushed your income above certain thresholds, you might pay higher Medicare premiums (IRMAA) in 2024 or 2025, depending on your tax return from two years prior. Check your Medicare notice each year to confirm your premium amount.

Will there be another COLA increase in 2024?

Yes, Social Security announces a new COLA each October for the following year. The 2024 COLA was 3.2 percent, announced in October 2023. COLA is recalculated every year based on inflation, so the amount changes annually and is not may provide to be as large as the 2023 increase.

How do I find out what my exact 2023 payment amount was?

Log into your my Social Security account at ssa.gov, call 1-800-772-1213, or visit your local Social Security office. Your payment notice from December 2022 or January 2023 also showed the new amount. If you did not receive a notice, you can request one by mail or phone.