The 2022 COLA increased SSDI payments by 5.9 percent, the largest raise in four decades

In October 2021, the Social Security Administration announced that the 2022 Cost of Living Adjustment (COLA) would be 5.9 percent. This meant that starting in January 2022, the average SSDI payment rose from roughly $1,147 per month to about $1,215 per month. The 5.9 percent figure was calculated by comparing the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of 2020 to the third quarter of 2021.

This was the largest COLA since 1982. For context, the 2021 COLA had been just 1.3 percent, and the 2020 COLA was 1.6 percent. The jump in 2022 reflected real inflation in the economy — particularly in energy, food, and housing costs — that affected what beneficiaries could actually buy with their monthly checks.

The increase was automatic. You did not have to do anything to receive it. If you were on SSDI in January 2022, your payment straightforward went up. The new amount appeared in your bank account or on your payment card on the third of the month, as usual.

Key Takeaways

  • The 2022 COLA of 5.9 percent was the largest increase since 1982, raising the average SSDI payment by about $68 per month.
  • The COLA is calculated each year using inflation data from July, August, and September, and announced in October for the following January.
  • COLA increases affect not only SSDI payments but also Supplemental Security Income (SSI), Medicare Part B premiums, and other benefit programs tied to Social Security.
  • Your individual payment increase depended on your specific benefit amount, so some recipients received more or less than the average.

How the 2022 COLA was calculated

The COLA is not set by Congress or by a formula that changes year to year. Instead, it is tied directly to inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The Social Security Administration compares the CPI-W for July, August, and September of one year to the same three months of the previous year. If inflation occurred, the percentage increase becomes the COLA for the following January.

For 2022, the CPI-W rose 5.9 percent between the third quarter of 2020 and the third quarter of 2021. That 5.9 percent became the COLA announced in October 2021 and applied to all payments starting January 2022. The CPI-W measures inflation for a specific group — urban wage earners and clerical workers — not all consumers, which is why the COLA sometimes differs from the inflation rate you may hear reported in the news.

If inflation had been zero or negative, there would have been no COLA. This happened in 2010 and 2011, when beneficiaries received no increase. But when inflation is positive, the COLA is automatic and applies to every SSDI beneficiary at the same rate.

Who received the 2022 COLA increase

Every person receiving SSDI in January 2022 received the 5.9 percent increase, with one exception: those who were also receiving workers' compensation or public disability benefits. Some states reduce SSDI payments if you receive other government disability payments, and the COLA increase was subject to the same reduction rules.

The increase also applied to family members receiving benefits on your SSDI record — your spouse, children, or ex-spouse, if they were may have access to to benefits based on your work history. Each of their payments went up by 5.9 percent as well.

The 2022 COLA did not affect people who had not yet been approved for SSDI. Future beneficiaries' first payment would be calculated using the current benefit formula, which changes each year, but they did not receive a retroactive adjustment for the 2022 COLA.

Impact on Medicare Part B premiums and other costs

The 2022 COLA increased not only SSDI payments but also the costs tied to them. Medicare Part B premiums — which cover doctor visits and outpatient care — rose from $148.50 per month in 2021 to $170.10 per month in 2022. For many SSDI beneficiaries who are also on Medicare, this premium is deducted directly from the SSDI payment.

This created a squeeze for some beneficiaries. Your SSDI payment went up 5.9 percent, but your Medicare premium went up 14.5 percent. If you were living on a tight budget, the net gain was smaller than the headline COLA number suggested. The Social Security Administration has a rule called the "hold harmless" provision that protects people age 65 and older from paying more in Medicare premiums than their COLA increase, but this rule does not explore to people under 65 on SSDI.

Supplemental Security Income (SSI) payments also increased by 5.9 percent in 2022. The federal SSI payment amount rose from $794 per month to $841 per month for an individual. Many states add their own supplement to the federal SSI amount, and those state supplements also increased by 5.9 percent.

The difference between 2022 and other recent years

The 2022 COLA of 5.9 percent stands out because it was so much larger than the increases of the previous decade. From 2010 to 2020, the average annual COLA was about 1.4 percent. In 2021, it was 1.3 percent. Then in 2022, it jumped to 5.9 percent — a change driven by inflation that affected groceries, gasoline, rent, and utilities.

This large increase was welcome for beneficiaries whose purchasing power had been eroded by years of small COLAs. However, it also raised questions about whether the CPI-W is the right measure of inflation for Social Security beneficiaries. Some researchers argue that older adults and people with disabilities spend a larger share of their income on healthcare and housing than the CPI-W assumes, meaning the official COLA may not fully reflect the inflation they actually experience.

The 2023 COLA, announced in October 2022, was 8.7 percent — even larger than 2022 — reflecting continued high inflation. This means the 2022 increase, while historic, was followed by an even bigger one.

What happened to your payment if you were already receiving SSDI

If you were on SSDI before January 2022, you received the 5.9 percent increase automatically. You did not need to contact Social Security, submit paperwork, or do anything at all. The increase appeared in your January 2022 payment.

Your new payment amount was based on your previous benefit amount multiplied by 1.059. So if you were receiving $1,200 per month in December 2021, your January 2022 payment was approximately $1,271. The exact amount depended on how Social Security rounded the calculation.

If you had questions about your specific new payment amount, you could check your Social Security account online at ssa.gov, call the Social Security Administration at 1-800-772-1213, or visit a local Social Security office. Your payment notice, sent by mail in December 2021, also showed the new amount.

How COLA affects your taxes and other benefits

The 2022 COLA increase could affect whether your SSDI benefits were taxable. If your combined income — SSDI plus other income like wages or interest — crossed certain thresholds, a portion of your SSDI became subject to federal income tax. The thresholds themselves do not change with COLA, so a larger SSDI payment made it more likely you would owe tax on some of your benefits.

The increase also affected your work incentives under the Plan to Achieve Self-Support (PASS) and other work-related programs. These programs allow you to set aside income and resources to reach a work goal without losing SSDI. The income limits and resource limits in these programs are tied to the federal benefit rate, which changes with COLA. A higher federal benefit rate meant higher limits in 2022.

If you were receiving Medicaid, the COLA increase did not directly affect your Medicaid status in most states. However, some states use SSDI payment amount as a factor in determining Medicaid coverage, so the increase could have affected your coverage level or cost-sharing.

Frequently Asked Questions

Did I have to do anything to get the 2022 COLA increase?

No. The COLA increase was automatic. Every SSDI beneficiary received it in January 2022 without taking any action. You did not need to contact Social Security, fill out a form, or reapply for benefits.

Why was the 2022 COLA so much larger than previous years?

The 2022 COLA of 5.9 percent reflected real inflation in the economy between mid-2020 and mid-2021. Prices for energy, food, housing, and other goods rose significantly during that period. The COLA is calculated automatically based on the Consumer Price Index, so when inflation is high, the COLA is high.

If I was approved for SSDI in 2022, did I get the 5.9 percent increase?

No. The COLA applies only to people already receiving SSDI when January 2022 arrived. If you were approved after January 2022, your first payment was calculated using the 2022 benefit formula, but you did not receive a retroactive adjustment for the 2022 COLA.

How did the 2022 COLA affect my Medicare costs?

Your SSDI payment increased 5.9 percent, but Medicare Part B premiums increased 14.5 percent in 2022. If you are under 65 and on SSDI, the hold harmless rule does not protect you, so your net increase after the premium deduction was smaller than 5.9 percent.

Will I get another COLA increase in 2023?

Yes. The 2023 COLA was 8.7 percent, announced in October 2022 and applied starting January 2023. COLA increases happen every year unless inflation is zero or negative, which is rare.