What the 2021 COLA increase was

In October 2020, the Social Security Administration announced a 1.3% cost of living adjustment (COLA) for 2021. This meant that starting in January 2021, people receiving SSDI payments saw their monthly benefit amount rise by 1.3% compared to what they received in 2020.

The 1.3% increase was one of the smallest COLAs in recent history. For context, the 2020 COLA had been 1.6%, and the 2019 COLA had been 2.8%. The 2021 increase reflected how inflation—the rate at which prices for goods and services rise—was measured during the specific months the Social Security Administration uses to calculate COLA.

If you were receiving SSDI in 2020, your January 2021 payment automatically included this increase. You did not need to do anything to receive it, and the Social Security Administration did not send a separate notice about the amount for most people.

Key Takeaways

  • The 2021 COLA was 1.3%, meaning SSDI payments increased by that percentage starting in January 2021.
  • The increase was automatic—you did not need to request it or take any action to receive it.
  • Social Security calculates COLA using inflation data from specific months each year, which is why the percentage changes annually.
  • A 1.3% increase was smaller than many previous years, reflecting lower inflation during the measurement period.

How the 2021 COLA was calculated

The Social Security Administration calculates COLA using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This index tracks how prices change for things people buy regularly—food, housing, transportation, medical care, and other goods and services.

For the 2021 COLA, Social Security compared the average CPI-W for July, August, and September 2020 to the average for the same three months in 2019. The difference between those two periods was 1.3%. This specific three-month window is used every year to determine the next year's increase.

The timing matters because 2020 was unusual—the COVID-19 pandemic affected prices in ways that varied month to month. Some goods became more expensive while others temporarily became cheaper. The three-month average helped smooth out those fluctuations, though the overall result was still a relatively modest increase compared to some recent years.

What $1.3% meant in actual dollars

The dollar amount of the increase depended on how much you were receiving before January 2021. Someone receiving $1,000 per month in 2020 would have received $1,013 per month starting in January 2021—a $13 increase. Someone receiving $1,500 per month would have seen a $19.50 increase.

The increase was the same percentage for everyone, but the actual dollar amount varied based on your individual benefit amount. People with higher benefit amounts received larger dollar increases, while people with lower benefit amounts received smaller ones.

If you were also receiving Supplemental Security Income (SSI)—a separate program for people with low income—you received a separate COLA for SSI. The SSI COLA for 2021 was also 1.3%, but it was calculated independently and applied to your SSI payment separately from any SSDI increase.

Why 2021's increase was smaller than other years

The 1.3% COLA reflected inflation during mid-2020, when the economy was adjusting to pandemic-related disruptions. Prices for some items rose, but others fell or stayed relatively flat. Energy prices, in particular, were lower in 2020 than they had been in 2019, which pulled down the overall inflation measure.

In contrast, 2022 saw a much larger COLA of 8.7%—the highest in four decades—because inflation accelerated significantly in 2021 and early 2022. The year-to-year variation in COLA reflects real changes in what things cost, not changes in policy or decisions made by Social Security.

A smaller COLA does not mean your benefits are being cut. Your payment amount still went up; it just went up by a smaller percentage than it had in some previous years or would in some future years.

When the 2021 increase took effect

The 2021 COLA increase appeared in SSDI payments starting in January 2021. If you received your payment on the third Wednesday of the month (the standard payment day for most SSDI recipients), you saw the higher amount in your January payment.

The exact payment date depends on your birth date. SSDI beneficiaries born on the 1st through the 10th of the month typically receive payments on the second Wednesday of each month. Those born on the 11th through the 20th receive payments on the third Wednesday. Those born on the 21st through the 31st receive payments on the fourth Wednesday. All of these groups saw their increase reflected in their first payment of January 2021.

How to verify your 2021 COLA increase

You can check whether your payment increased by comparing your January 2021 payment to your December 2020 payment. Your payment should have been 1.3% higher. You can view your payment history by logging into your Social Security account at ssa.gov or by calling Social Security at 1-800-772-1213.

If you received a notice from Social Security about your 2021 benefit amount, it would have shown the new monthly payment starting in January. If you did not receive a notice, you can still verify the amount by checking your account online or calling. Social Security does not always send notices for COLA increases, so the absence of a notice does not mean the increase did not happen.

If your payment did not increase by 1.3% in January 2021, or if you have questions about your specific benefit amount, contact Social Security directly. There may be circumstances—such as a change in your work income or a change in your living situation—that affected your payment in ways separate from the COLA.

Frequently Asked Questions

Did everyone receiving SSDI get the same 1.3% increase in 2021?

Yes, everyone receiving SSDI got a 1.3% increase to their monthly payment starting in January 2021. The percentage was the same for all beneficiaries, though the dollar amount of the increase varied depending on how much each person was receiving.

Why was the 2021 COLA so much smaller than the 2022 COLA?

The 2021 COLA (1.3%) reflected inflation during mid-2020, when prices were relatively stable. The 2022 COLA (8.7%) reflected inflation during mid-2021, when prices rose much more sharply. Each year's COLA is based on inflation during that specific year's measurement period.

If I was working in 2021, did the COLA still explore to my SSDI?

Yes. The COLA applies to all SSDI beneficiaries regardless of work status. However, if your work income was high enough, it might have affected your benefit amount separately from the COLA. Contact Social Security if you want to understand how your work and the COLA both affected your 2021 payment.

Can I get back pay if I did not receive the 2021 COLA increase?

If your payment did not increase in January 2021 and there was no other reason for it to stay the same, contact Social Security to report the issue. They can review your account and correct any errors, which may include back pay to January 2021.