The 2020 COLA increased SSDI payments by 1.6 percent

In October 2019, the Social Security Administration announced that SSDI payments would increase by 1.6 percent starting in January 2020. This was the annual cost of living adjustment, or COLA, meant to help benefits keep pace with inflation.

The exact dollar amount of your increase depended on what you were receiving in December 2019. Someone getting $1,000 per month would have received an additional $16 per month starting January 2020. Someone getting $1,500 would have received an additional $24 per month. The increase was automatic — you did not have to do anything to receive it.

This 1.6 percent increase was smaller than the increases in some previous years. For comparison, the 2019 COLA had been 2.8 percent, and the 2018 COLA had been 2 percent. The 2020 increase reflected lower inflation in the economy during the measurement period.

Key Takeaways

  • The 2020 COLA of 1.6 percent meant that if you received $1,000 monthly, your payment rose to $1,016 in January 2020.
  • The increase was based on inflation data from the third quarter of the previous year and applied automatically to all SSDI recipients.
  • Not all years see the same percentage increase — COLA amounts change based on how much prices rose in the economy.
  • Your new payment amount appeared in your January 2020 benefit statement, and you received a notice in the mail explaining the change.

How the Social Security Administration calculated the 2020 increase

The Social Security Administration uses a specific measure called the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to determine each year's COLA. This index tracks how prices change for things people buy regularly — food, housing, transportation, medical care, and other goods and services.

For the 2020 COLA, the SSA compared the average CPI-W for the third quarter of 2019 (July, August, and September) to the average for the third quarter of 2018. The difference between those two periods was 1.6 percent, which became the COLA for all SSDI recipients.

This method is the same every year. The SSA does not choose the percentage — it is determined by the inflation data. If inflation is higher, the COLA is higher. If inflation is lower, the COLA is lower. In years when there is no inflation or prices actually fall, there is no COLA increase at all.

When the 2020 increase took effect

The 2020 COLA increase became part of your regular SSDI payment starting in January 2020. You received your first increased payment on your normal payment date in January — usually the third of the month, though the exact date depends on your birth date.

The Social Security Administration mailed notices to all SSDI recipients in December 2019 explaining the new payment amount. If you did not receive a notice, you could have called Social Security at 1-800-772-1213 to confirm your new amount.

Why 2020's increase was smaller than other years

The 1.6 percent increase in 2020 was lower than what many people had received in the years when ready before. This happened because inflation in the economy was lower during the measurement period for 2020 than it had been for previous years.

The 2019 COLA had been 2.8 percent because inflation was higher in 2018 and early 2019. The 2018 COLA had been 2 percent. By contrast, inflation slowed in 2019, which led to the smaller 1.6 percent increase for 2020.

COLA amounts naturally go up and down based on what is happening in the broader economy. There is no way to predict in advance what next year's COLA will be, because it depends on inflation data that has not yet been collected.

What the 2020 increase meant for your other benefits

If you received Supplemental Security Income (SSI) in addition to SSDI, your SSI payment also increased by 1.6 percent in January 2020. SSI uses the same COLA as SSDI.

If you were receiving benefits as a family — for example, if your spouse or children were on your SSDI record — each of their payments increased by 1.6 percent as well. The increase applied to everyone receiving benefits based on your work record.

The increase did not affect Medicare or Medicaid coverage. If you were enrolled in either program, your coverage continued without change, though your premiums for Medicare Part B may have changed based on your new income level.

How to find out what your 2020 payment was

Your official payment amount for 2020 appeared in the notice Social Security mailed in December 2019. You could also view your payment amount by creating an account on ssa.gov and logging into your personal Social Security account.

If you lost the notice or did not receive one, you could call Social Security at 1-800-772-1213 during business hours (Monday through Friday, 7 a.m. to 7 p.m. your local time) and ask a representative to tell you your January 2020 payment amount.

Your bank or financial institution also would have shown the new amount in your account once the January payment arrived. If the amount seemed wrong, you could contact Social Security to ask them to review your record.

Frequently Asked Questions

Did everyone on SSDI get the same 1.6 percent increase?

Yes. Every SSDI recipient received exactly a 1.6 percent increase to their monthly payment in January 2020, regardless of how much they were receiving or where they lived. The COLA is the same for everyone.

What if I did not receive an increase in January 2020?

If your payment did not increase, contact Social Security at 1-800-772-1213 to report the problem. It is possible there was an error in your account, or you may have had a change in your situation that affected your payment. A representative can review your record and explain what happened.

Does the COLA increase affect how much I can earn while on SSDI?

No. The COLA does not change the earnings limits or work incentives available to SSDI recipients. Your ability to work and earn money while receiving benefits is determined by separate rules that do not change with the annual COLA.

Will there be a COLA increase in 2021?

There was a COLA increase in 2021, but the amount was different from 2020. Each year's COLA is calculated separately based on inflation data from that year. You can find information about future COLA amounts on the Social Security Administration website once they are announced.