What the 2023 COLA increase meant for SSDI payments

In October 2022, the Social Security Administration announced an 8.7% cost-of-living adjustment (COLA) for 2023 — the largest increase in four decades. This meant that starting in January 2023, SSDI payments rose by 8.7% across the board. The exact dollar amount of your increase depended on what you were receiving in December 2022, so no two people saw the same dollar change, but the percentage was the same for everyone.

This increase was automatic. You did not have to do anything to receive it. If you were on SSDI in December 2022, your January 2023 payment reflected the 8.7% bump. The increase applied to your primary benefit amount — the base payment the Social Security Administration uses to calculate what you receive each month.

The 2023 COLA was driven by inflation that had accumulated through 2022. Social Security calculates the annual adjustment using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), measured from the third quarter of one year to the third quarter of the next. When prices rise faster than they had in previous years, the COLA percentage rises with them.

Key Takeaways

  • The 2023 COLA of 8.7% increased all SSDI payments automatically starting in January 2023, with no action required from beneficiaries.
  • Your specific dollar increase depended on your December 2022 payment amount, so different people received different dollar amounts even though the percentage was identical.
  • The increase applied to your primary benefit amount, which is used to calculate payments for family members who also receive benefits on your record.
  • The 2023 increase was the largest COLA since 1981, driven by inflation measured through the third quarter of 2022.

How the 8.7% increase was calculated

Social Security does not calculate your COLA increase manually for each person. Instead, the agency determines one percentage — 8.7% for 2023 — and applies it uniformly to every SSDI beneficiary's primary benefit amount. If your primary benefit was $1,200 in December 2022, your January 2023 payment became $1,304.40. If it was $800, it became $868.80.

The increase also affected the earnings test, the substantial gainful activity (SGA) threshold, and other dollar limits tied to benefit amounts. These thresholds all rise with COLA to keep pace with inflation. For 2023, the SGA limit — the amount you can earn before work affects your benefits — increased to $1,470 per month for non-blind beneficiaries and $3,822 for blind beneficiaries.

If you receive benefits as a family member on someone else's SSDI record — as a spouse, child, or parent — your payment also increased by 8.7%. The increase applied to your benefit rate, which is calculated as a percentage of the primary beneficiary's amount. When the primary amount went up, so did yours.

When the increase appeared in your bank account

The 2023 COLA increase took effect on January 1, 2023, and appeared in payments sent on the beneficiary's regular payment date in January. Most SSDI beneficiaries receive payments on the second, third, or fourth Wednesday of each month, depending on their birth date. Your January payment reflected the new, higher amount.

If you receive your payment by direct deposit, the increase appeared in your bank account on your regular payment date. If you receive a check, it arrived by mail on your regular schedule. There was no delay or separate notice of the increase — it was straightforward built into your January payment.

You could verify the increase by checking your Social Security account online at ssa.gov, calling 1-800-772-1213, or visiting a local Social Security office. Your online account shows your current payment amount and a history of past payments, so you could compare your December 2022 and January 2023 amounts to confirm the 8.7% increase was applied.

Why 2023 saw such a large increase

The 8.7% COLA for 2023 was historically large because inflation in 2022 was historically high. The Consumer Price Index, which measures the cost of goods and services across the economy, rose significantly through the year. Social Security's COLA formula captures this inflation and converts it into a percentage increase for benefits.

The last time SSDI beneficiaries saw a COLA this large was in 1981, when the adjustment was 11.2%. Most years between 1983 and 2021 saw much smaller increases — often between 1% and 3%. The 2023 increase was exceptional because the inflation it reflected was exceptional.

COLA increases are meant to preserve the purchasing power of benefits. Without them, the same monthly payment would buy less and less each year as prices rose. The 8.7% increase in 2023 was intended to help beneficiaries keep pace with the higher cost of living they experienced in 2022.

How COLA affects other benefit programs

The 2023 COLA applied not only to SSDI but also to Supplemental Security Income (SSI), Social Security retirement benefits, and Social Security survivor benefits. Any program that uses Social Security's benefit calculation received the same 8.7% increase. This meant that if you received SSI in addition to SSDI, both payments increased.

The increase also affected the federal benefit rate for SSI, which is the maximum monthly payment. For 2023, the federal SSI benefit rate rose to $914 per month for an individual and $1,371 for a couple. States that supplement the federal SSI payment also adjusted their amounts, though the increase varied by state.

Veterans' benefits, federal civil service retirement payments, and some other federal payments also receive annual COLA adjustments, though they may use different inflation measures or different effective dates. The 2023 SSDI COLA was specific to Social Security programs.

What to do if your payment did not increase

In rare cases, a beneficiary's payment did not increase in January 2023, or the increase was smaller than expected. This could happen if you had a work incentive in place, such as a Plan to Achieve Self-Support (PASS), which can affect how your benefit is calculated. It could also happen if you were subject to the family maximum — a limit on the total amount that can be paid to all family members on one record.

If your family's total benefits exceeded the family maximum, the increase was distributed among family members rather than given entirely to the primary beneficiary. This meant some family members might have received a smaller increase than 8.7%, or none at all, so that the total stayed within the cap.

If you believe your payment did not increase correctly, contact Social Security at 1-800-772-1213 or visit your local office. Have your payment history available — you can print it from your online account — so you can show the representative what you received in December 2022 and January 2023.

Frequently Asked Questions

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

No. The increase was automatic and applied to all SSDI beneficiaries in January 2023. You did not need to contact Social Security, submit any forms, or take any action. If you were receiving SSDI in December 2022, your January 2023 payment was automatically higher.

What if I was not receiving SSDI in December 2022 but started in 2023?

Your first payment would have reflected the 2023 benefit amount, which already included the COLA increase. You would not receive a separate adjustment later. Your benefit was calculated using the post-COLA primary benefit amount.

Does the COLA increase affect the amount I can earn before my benefits are reduced?

Yes. The substantial gainful activity (SGA) threshold, which determines whether work affects your benefits, increases with COLA. For 2023, the SGA limit rose to $1,470 per month for non-blind beneficiaries. If you earn more than this amount, your benefits may be reduced or stopped, depending on your situation.

Will there be another COLA increase in 2024?

Yes, but the percentage will be different. Social Security announces the new COLA percentage in October of each year, based on inflation data through the third quarter. The 2024 COLA was 3.2%, significantly lower than 2023 because inflation slowed during 2023. Each year's increase is calculated independently based on that year's inflation.

Can I get back pay if I missed the 2023 increase?

If you were may have access to to SSDI in December 2022 but did not receive a payment that month — for example, because you had not yet been approved — you may be owed back pay that includes the COLA increase. Contact Social Security to review your payment history and determine what you are owed.