What the 2023 COLA was and who received it

In October 2022, the Social Security Administration announced that benefits would increase by 8.7 percent starting in January 2023. This was the 2023 Cost of Living Adjustment (COLA), a yearly raise meant to help benefits keep pace with inflation. If you received SSDI in 2023, your monthly payment went up by this percentage automatically—you did not have to do anything to receive it.

The 8.7 percent increase was the largest COLA since 1981. Most people on SSDI saw the raise appear in their January 2023 payment. If you received benefits through a family member's work record (as a spouse or child), you received the same percentage increase.

The amount of money you gained depended on what you were receiving before the raise. Someone getting $1,000 per month would have received about $87 more per month. Someone getting $1,500 would have received about $130 more. The exact dollar amount varied by individual.

Key Takeaways

  • The 2023 COLA of 8.7 percent was the largest increase since 1981, reflecting high inflation in 2022.
  • The raise was automatic and applied to all SSDI payments starting in January 2023—no action was required from you.
  • Your new payment amount depended on what you were receiving before the adjustment, so the dollar increase varied by person.
  • COLA adjustments happen every year based on inflation data from the previous year, so the percentage changes annually.

How the 2023 COLA was calculated

The Social Security Administration calculates COLA using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a measure of inflation published by the U.S. Bureau of Labor Statistics. The agency compares the average CPI-W for the third quarter of the current year to the average for the third quarter of the previous year. The percentage difference becomes the COLA for the following year.

For 2023, the CPI-W rose sharply in 2022 due to rising costs for food, energy, housing, and other goods. This high inflation meant the COLA percentage was unusually large. In years when inflation is lower, the COLA is smaller. In rare years when inflation falls, there is no COLA increase at all.

The announcement always comes in October, and the new payment amount takes effect in January. This timing gives the Social Security Administration time to process the change across millions of accounts before payments are issued.

What changed in your monthly payment

Your January 2023 payment reflected the 8.7 percent increase. If you had been receiving $1,217 per month in December 2022 (the average SSDI payment at that time), your January 2023 payment would have been approximately $1,323. The exact amount depended on your individual benefit calculation.

If you were receiving benefits as a spouse or child on someone else's record, your payment also increased by 8.7 percent. Family members do not receive separate COLA calculations—everyone on the same work record receives the same percentage increase.

The increase appeared automatically in your bank account or payment method. You did not need to contact Social Security, reapply, or take any steps to receive it. If you had questions about your specific new amount, you could call Social Security at 1-800-772-1213 or visit your local office.

How COLA affects other benefits and programs

When your SSDI payment increased, other programs tied to your benefit amount may have changed as well. Supplemental Security Income (SSI), a separate program for people with low income and limited resources, also received the same 8.7 percent COLA increase in 2023. If you received both SSDI and SSI, both payments went up.

Some people on SSDI also receive Medicare or Medicaid. The COLA increase to your SSDI payment does not directly change your Medicare or Medicaid coverage, but it may affect whether you may have access to for certain information programs that have income limits. For example, if your SSDI increase pushed your income above a threshold for a state program, you might lose that benefit. Contact your state Medicaid office if you are unsure how the increase affected your coverage.

If you were working and receiving SSDI under a work incentive program, the increase to your benefit amount was still applied. Your earnings limit for the Substantial Gainful Activity (SGA) test also increased each year, but that is a separate calculation from COLA.

COLA adjustments in other years

The 2023 COLA of 8.7 percent was unusually high. In recent years before 2023, COLA adjustments were much smaller. In 2022, the COLA was 5.9 percent. In 2021, it was 1.3 percent. In 2020, it was 1.6 percent. These lower percentages reflected lower inflation in those years.

Each year's COLA is determined by inflation data from the previous year, so the percentage varies. There is no way to predict next year's COLA with certainty, because it depends on inflation that has not yet occurred. The Social Security Administration announces the new COLA percentage every October for the following year.

In some years, inflation actually falls, and there is no COLA increase. This happened in 2010, 2011, and 2016. In those years, benefit payments stayed the same as the previous year. This is rare but possible.

Why COLA matters for your budget

For people on a fixed income, even a small increase in monthly benefits can make a difference. The 8.7 percent raise in 2023 meant that people on SSDI had more money to cover rent, food, utilities, and medical costs. For someone receiving the average SSDI payment, the increase was roughly $100 per month—money that could go toward necessities.

However, COLA does not always keep up with the actual costs people face. The CPI-W measures inflation for urban wage earners, not for people on disability benefits, who may spend money differently. For example, if prescription drug costs or medical care rise faster than the overall inflation rate, your COLA increase might not fully cover those expenses.

Understanding your COLA increase helps you plan your budget for the year. If you know your payment is going up in January, you can adjust your spending or savings plans accordingly.

Frequently Asked Questions

Do I have to do anything to get the 2023 COLA increase?

No. The increase was automatic and applied to all SSDI payments in January 2023. You did not need to contact Social Security, reapply, or take any action. If you did not see the increase in your January payment, contact Social Security at 1-800-772-1213 to ask about your account.

Will I get a COLA increase in 2024 and beyond?

Yes, COLA adjustments happen every year. The percentage changes based on inflation from the previous year. The Social Security Administration announces the new COLA percentage every October. You can find the current year's COLA on the Social Security website or by calling 1-800-772-1213.

Does the COLA increase affect my Medicare premiums?

Your Medicare Part B and Part D premiums may change each year, but the change is not directly caused by COLA. However, Social Security has a rule called "hold harmless" that protects most people—your Part B premium cannot increase more than the amount of your COLA increase. This means the raise you receive helps offset any premium increase.

What if I think my new payment amount is wrong?

Contact Social Security to verify your new payment amount. You can call 1-800-772-1213, visit your local Social Security office, or create an account on ssa.gov to view your payment history. Social Security can explain how your specific benefit was calculated and correct any errors.

Does COLA explore if I am working and receiving SSDI?

Yes. If you are receiving SSDI and working under a work incentive program, your benefit payment still increases by the COLA percentage. The increase applies to all SSDI beneficiaries, regardless of whether they are working.