What the 2020 COLA increase was and who received it

In October 2019, the Social Security Administration announced a 1.6% cost of living adjustment (COLA) for 2020. This meant that starting in January 2020, people receiving Social Security Disability Insurance (SSDI) saw their monthly benefit amount increase by 1.6% from what they had received in 2019.

The increase applied automatically to all SSDI beneficiaries. You did not need to contact Social Security or take any action to receive it. If you were on the SSDI rolls in December 2019, your January 2020 payment reflected the 1.6% bump.

The exact dollar amount of your increase depended on your individual benefit rate. Someone receiving $1,000 per month would have seen an increase of $16. Someone receiving $1,500 would have seen an increase of $24. The percentage was the same for everyone, but the dollar amount varied based on what you were already receiving.

Key Takeaways

  • The 2020 COLA was 1.6%, applied automatically to all SSDI beneficiaries starting in January 2020.
  • Your increase amount in dollars depended on your existing benefit rate, since the percentage was applied to your individual payment.
  • The COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the previous year.
  • COLA increases are tied to inflation and can vary year to year; some years have no increase at all if inflation is flat or negative.

How Social Security calculated the 2020 COLA percentage

The 1.6% figure came from a specific measurement of inflation. Social Security uses the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to determine whether the cost of living has risen. This index tracks the price of goods and services that working people buy — food, housing, transportation, medical care, and other everyday expenses.

Social Security compares the CPI-W from July, August, and September of one year to the same three months in the previous year. For the 2020 COLA, they looked at the third quarter of 2019 and compared it to the third quarter of 2018. The difference between those two periods was 1.6%, so that became the 2020 COLA.

This method means the COLA is not a decision made by Social Security officials or Congress. It is a mathematical result based on actual inflation data. If inflation had been higher, the COLA would have been higher. If inflation had been lower or negative, the COLA would have been lower or zero.

When the 2020 increase appeared in your payment

The 2020 COLA took effect on January 1, 2020. Your first payment that included the increase arrived in January 2020 (the exact date depends on your birth date, since Social Security staggers payment dates throughout the month).

If you were receiving SSDI in December 2019, you automatically received the higher amount in January 2020. If you had been suspended or terminated before January 2020, the increase would not have applied to you unless your benefits were reinstated.

If you were a family member receiving benefits on someone else's SSDI record — a spouse, child, or parent — you also received the same 1.6% increase on your own benefit amount in January 2020.

How the 2020 COLA affected your work incentives and earnings limits

The 2020 COLA also affected the Substantial Gainful Activity (SGA) limit, which is the monthly earnings threshold that determines whether you are working too much to remain on SSDI. In 2020, the SGA limit was $1,260 per month for non-blind beneficiaries and $3,350 for blind beneficiaries. These limits increase each year based on the COLA.

If you were working while on SSDI, the higher SGA limit meant you could earn slightly more before Social Security considered your work substantial. The Trial Work Period and Extended may be able to access Period (the nine-month and 36-month windows that protect your benefits while you test your ability to work) were not affected by the COLA, but the earnings thresholds within those periods were adjusted upward.

Comparing the 2020 COLA to other years

The 1.6% increase in 2020 was modest compared to some years but higher than others. In 2019, the COLA had been 2.8%. In 2021, it dropped to 1.3%. In 2022, it jumped to 8.7% — the largest increase in four decades, driven by inflation that spiked after the pandemic.

Some years have had no COLA at all. In 2010, 2011, and 2016, inflation was so low that the COLA was 0%, meaning beneficiaries received no increase that year. This is why the COLA varies — it is directly tied to inflation, which changes based on economic conditions.

The 2020 COLA of 1.6% reflected moderate inflation during that period. It was enough to help offset some of the rising costs of living, but it did not keep pace with inflation in all categories — healthcare and housing costs, for example, often rise faster than the overall inflation rate that the CPI-W measures.

What to do if you did not see the increase in your January 2020 payment

If you were receiving SSDI in December 2019 but did not see a 1.6% increase in your January 2020 payment, contact Social Security to find out why. Possible reasons include: your benefits were suspended or terminated before January 2020; you had an overpayment that was being withheld; or there was an error in your account.

You can reach Social Security by calling 1-800-772-1213 (TTY 1-800-325-0778) or by visiting your local Social Security office. Have your Social Security number and recent payment stubs ready. If there was an error, Social Security can correct it and issue a back payment for the months you should have received the higher amount.

Frequently Asked Questions

Why was the 2020 COLA only 1.6% when inflation seemed higher?

The COLA is based on the CPI-W, which measures inflation for urban wage earners and clerical workers specifically. It does not capture all inflation — for example, healthcare costs often rise faster than the overall CPI-W. The 1.6% reflected the average inflation across the categories the index tracks during the third quarter of 2019.

Did the 2020 COLA increase affect Medicare premiums?

Yes. The COLA affects the Medicare Part B premium for some beneficiaries. If your Medicare premium increased in 2020, part of your COLA increase may have gone toward that premium increase. This is called the "hold harmless" provision — your total benefit cannot decrease due to a premium increase, but the COLA can be partially offset by it.

If I was not on SSDI in 2019, can I get the 2020 COLA retroactively?

No. The COLA applies only to people who were receiving benefits when it took effect. If you started SSDI in 2020 or later, your initial benefit amount was calculated based on your earnings record, not on a previous year's amount plus a COLA increase.

Does the COLA increase affect Supplemental Security Income (SSI)?

Yes. SSI recipients also receive the same COLA percentage increase as SSDI beneficiaries. The 1.6% increase in 2020 applied to both programs. However, SSI has different payment amounts and rules, so the dollar increase may have been different.