The 2017 COLA increased SSDI payments by 2 percent

In 2017, Social Security announced a 2 percent cost of living adjustment (COLA) for all SSDI beneficiaries, effective January 2017. This was the first increase since 2009 and followed three years with no COLA at all (2010, 2011, and 2016). The 2 percent figure was calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures inflation across the economy.

For someone receiving $1,000 per month in December 2016, the January 2017 payment would have risen to $1,020. The actual dollar increase varied widely because SSDI payments themselves vary by work history and age. Someone with a lower benefit amount saw a smaller dollar increase; someone with a higher benefit saw more.

The 2017 COLA was modest compared to historical adjustments. Between 1975 and 2008, the average annual COLA was 3.2 percent. The years when ready after the 2008 financial crisis saw no adjustments at all, which meant beneficiaries lost purchasing power as prices rose around them.

Key Takeaways

  • The 2017 COLA was 2 percent, meaning your January 2017 payment was 2 percent higher than your December 2016 payment.
  • This was the first increase in three years, following no COLA in 2010, 2011, and 2016.
  • The adjustment was automatic — you did not need to do anything to receive it, and it appeared in your January 2017 direct deposit or check.
  • The 2 percent figure was based on inflation measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

How the 2017 COLA was calculated

Social Security calculates the annual COLA by comparing the average Consumer Price Index for the third quarter of the current year to the average CPI for the third quarter of the previous year. For 2017, Social Security compared July, August, and September 2016 to July, August, and September 2015. The result was a 2.0 percent increase.

This method is set by federal law and applies the same way every year. If inflation is zero or negative, the law requires that the COLA be zero — there is no negative adjustment that would reduce your payment. This happened in 2010, 2011, and 2016, when the CPI-W showed no growth or slight decline.

The CPI-W measures price changes for food, housing, transportation, medical care, and other goods and services that urban workers typically buy. It does not measure the actual cost of living for disabled people specifically, which is why many disability advocates have argued for a different index that better reflects the expenses beneficiaries face.

Why there was no COLA in 2016

The year before the 2017 increase, there was no COLA for 2016. This happened because the Consumer Price Index showed no meaningful inflation between the third quarter of 2014 and the third quarter of 2015. Oil prices had fallen sharply, and overall price growth was flat.

For beneficiaries, a zero COLA meant your January 2016 payment was identical to your December 2015 payment. However, your Medicare Part B premium — the monthly charge for doctor visits and outpatient care — rose that year. This created a squeeze: some beneficiaries saw their Medicare premium increase while their SSDI payment stayed flat, reducing their net income.

The three-year stretch from 2010 to 2016 without a COLA was historically unusual. Between 1975 and 2009, there was only one year (1998) with no adjustment. The long pause after the 2008 financial crisis meant beneficiaries who relied on SSDI as their only income lost real purchasing power over those years.

What the 2017 increase meant for Medicare and Medicaid

When your SSDI payment increased in January 2017, your Medicare Part B premium was held harmless. This means that even though your benefit went up, your Medicare premium did not increase beyond what it would have been anyway. The "hold harmless" rule protects beneficiaries from losing the entire COLA to a premium increase.

If you were on Medicaid as well as SSDI, the 2017 COLA did not affect your Medicaid status in most states. Medicaid may be able to access for SSDI beneficiaries is tied to your SSDI payment amount, and the increase was small enough that it did not push anyone over the income limit. However, some states have different rules, so if you were near the Medicaid income limit, you could have contacted your state Medicaid office to confirm your status.

The 2017 COLA also did not change the Substantial Gainful Activity (SGA) limit — the amount of work earnings you can have while still receiving SSDI. The SGA limit for 2017 was $1,170 per month for non-blind beneficiaries and $1,950 for blind beneficiaries. These limits are set separately from the COLA and are adjusted based on national wage trends, not inflation.

How the 2017 COLA compared to earlier years

The 2 percent COLA for 2017 was higher than the zero adjustments of 2010, 2011, and 2016, but lower than many years before the financial crisis. In 2008, the COLA was 5.8 percent. In 2007, it was 3.3 percent. In 2005, it was 2.7 percent. The 2017 adjustment was closer to the long-term average but still modest by historical standards.

The years with no COLA created a cumulative loss for beneficiaries. Someone who received SSDI throughout 2010, 2011, 2012, 2013, 2014, 2015, and 2016 saw their payment increase only in 2012 (3.6 percent), 2013 (1.5 percent), 2014 (1.7 percent), and 2015 (0 percent). Over that seven-year period, the total increase was 6.8 percent — less than 1 percent per year on average. Meanwhile, prices for medical care, housing, and other necessities rose faster than that.

What happened to SSDI payments after 2017

After the 2017 COLA, the pattern of adjustments continued to reflect inflation. In 2018, the COLA was 2.0 percent again. In 2019, it was 2.8 percent. In 2020, it was 1.6 percent. In 2021, it jumped to 5.9 percent — the largest increase since 2008 — because inflation had accelerated. In 2022, it was 8.7 percent, the highest in 40 years, reflecting the sharp rise in prices across the economy.

The 2017 COLA was therefore a turning point: it marked the end of the zero-adjustment years and the beginning of a period of modest but consistent increases. It did not restore the purchasing power that beneficiaries had lost during 2010, 2011, and 2016, but it began the process of keeping pace with inflation again.

Frequently Asked Questions

Did I have to do anything to get the 2017 COLA?

No. The COLA was automatic. If you were receiving SSDI in January 2017, your payment increased by 2 percent without any action on your part. The increase appeared in your direct deposit or mailed check.

Why was there no COLA in 2016 but one in 2017?

The COLA is based on inflation measured by the Consumer Price Index. In 2016, inflation was essentially zero, so there was no adjustment. By 2017, inflation had risen to 2 percent, triggering an increase.

Did the 2017 COLA affect my Medicare premium?

Your Medicare Part B premium was held harmless, meaning it did not increase beyond what it would have been anyway. You kept the full benefit of the 2 percent COLA increase.

How much did my payment actually increase in 2017?

Your payment increased by 2 percent of whatever you were receiving in December 2016. If you received $1,000, it became $1,020. If you received $800, it became $816. The exact dollar amount depends on your individual benefit.