The 2021 SSDI increase was 1.3 percent

Social Security Disability Insurance (SSDI) payments increased by 1.3 percent in 2021, based on the Cost of Living Adjustment (COLA) announced in October 2020. This meant that if you received $1,000 per month in December 2020, your payment in January 2021 would be $1,013.

The 1.3 percent figure came from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures inflation across the economy. Social Security calculates COLA each year using data from the third quarter (July, August, September) and announces the new rate in October for payments that begin the following January.

This was one of the smallest COLA increases in recent history. For comparison, the 2020 increase had been 1.6 percent, and the 2019 increase was 2.8 percent. The low 2021 figure reflected a period of minimal inflation in the U.S. economy.

Key Takeaways

  • The 2021 COLA of 1.3 percent applied to all SSDI recipients starting in January 2021, with no action needed on your part.
  • Your new payment amount was calculated automatically by Social Security and appeared in your January 2021 deposit.
  • COLA increases are tied to inflation data and vary year to year, so the 2021 rate does not predict what future years will bring.
  • If you were also receiving Supplemental Security Income (SSI), you received the same 1.3 percent increase on that benefit as well.

How the 1.3 percent increase worked in practice

The increase was not a separate payment or a one-time bonus. Instead, Social Security recalculated your monthly benefit amount and the new, higher amount became your regular payment starting January 2021. You did not need to request it, report anything, or take any action.

If you had a representative payee (someone authorized to receive your benefits on your behalf), the increase went to that account. If you managed your own account, the increase went directly to your bank account or payment card, depending on how you received benefits.

The increase applied to your primary benefit amount, which is the base number Social Security uses to calculate any other payments tied to your account. If you had a spouse or child receiving benefits based on your work record, their payments increased by the same 1.3 percent as well.

Why 2021 saw such a small increase

COLA is determined by inflation, which measures how much prices for goods and services rise over time. In 2020 and early 2021, inflation was historically low. Gasoline prices fell sharply in spring 2020, food prices were relatively stable, and housing costs did not surge the way they would later in 2021 and 2022.

Social Security looks specifically at the CPI-W, which tracks prices paid by urban wage earners and clerical workers. This index does not include all consumers—it excludes rural workers and retirees, for example—but it is the measure Congress designated for COLA calculations by law.

The timing of when inflation occurs matters too. COLA uses only the third quarter (July through September) of the measurement year. Even though prices began rising more sharply in late 2021, that increase did not affect the 2021 COLA calculation because it happened after the measurement period ended.

What happened to SSDI payments after 2021

The 2022 COLA was 5.9 percent, more than four times the 2021 increase. This reflected the rapid inflation that occurred in late 2021 and the first half of 2022. The 2023 COLA was 8.7 percent, the highest in four decades, driven by continued high inflation throughout 2022.

These larger increases showed why COLA matters to SSDI recipients. A year with low inflation produces a small increase or sometimes no increase at all (COLA has been zero in some years). A year with high inflation produces a larger increase. Over time, these adjustments are meant to help your benefit keep pace with the rising cost of living, though they do not always match the inflation you experience personally.

How to find your exact 2021 payment amount

Your Social Security statement, available through your online account at ssa.gov, shows your payment history month by month. You can log in, go to "Benefit Verification Letter" or "Payment History," and see exactly what you received in January 2021 and every month after.

If you do not have an online account, you can call Social Security at 1-800-772-1213 (TTY 1-800-325-0778) and ask for a benefits verification letter. This document lists your current payment amount and explains any recent changes, including COLA increases.

Your bank or payment card statement from January 2021 will also show the new amount if you received direct deposit. If you received a paper check, the amount would have appeared on the check stub or the check itself.

COLA and your other benefits or income

If you received both SSDI and Supplemental Security Income (SSI), both increased by 1.3 percent in 2021. SSI is a separate needs-based program, but it uses the same COLA calculation as SSDI.

If you were working and earning income while receiving SSDI, the COLA increase did not change how your work earnings affected your benefit. Social Security still applied the same rules about how much you could earn before your benefit was reduced.

If you were receiving benefits as a family (for example, your child received benefits based on your work record), each family member's benefit increased by 1.3 percent, but the family maximum—the total amount all family members could receive combined—also increased by 1.3 percent.

Frequently Asked Questions

Did I have to do anything to get the 2021 COLA increase?

No. The increase was automatic. Social Security calculated it and applied it to your account without any action on your part. Your new payment amount appeared in your January 2021 deposit.

Why was the 2021 increase so small compared to 2022 and 2023?

COLA is based on inflation measured during a specific three-month period (July through September). In 2020 and early 2021, inflation was very low. Inflation rose sharply later in 2021 and throughout 2022, which is why the 2022 and 2023 increases were much larger.

If I was not receiving SSDI in 2021, can I get the 2021 increase now?

No. COLA increases explore only to people who were receiving benefits when the increase took effect. If you began receiving SSDI after January 2021, your benefit amount is based on the rules and payment levels in effect when your benefit started.

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

The COLA increase does not change the earnings limits or the rules about how work affects your benefit. Social Security applies the same work incentive rules regardless of COLA. Your benefit reduction for work earnings is calculated the same way before and after a COLA increase.