The 2023 COLA increased SSDI payments by 8.7 percent

In October 2022, the Social Security Administration announced that the 2023 Cost of Living Adjustment (COLA) would be 8.7 percent. This meant that starting with the December 2022 payment (received in January 2023), every person receiving SSDI saw their monthly check increase by 8.7 percent compared to what they received in 2022.

The 8.7 percent figure was the largest COLA increase since 1981. It reflected the inflation that had built up through 2022, measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from July through September of that year.

Because COLA is a percentage increase, the dollar amount added to each check varied. Someone receiving $1,000 per month in 2022 would receive $1,087 per month starting in January 2023. Someone receiving $800 would receive $869.60. The exact increase depended on what your individual payment was before the adjustment.

Key Takeaways

  • The 2023 COLA of 8.7 percent was the largest increase since 1981 and applied to all SSDI recipients starting with the January 2023 payment.
  • Your 2023 payment increase was calculated as a percentage of your 2022 amount, so higher payments received larger dollar increases.
  • COLA is set by law based on inflation data from July through September of the prior year and cannot be changed by Social Security.
  • The 2023 COLA affected not only your own SSDI check but also any family benefits paid on your record and Supplemental Security Income (SSI) payments.

How the 8.7 percent increase was calculated

Social Security calculates COLA using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a measure of inflation published by the Bureau of Labor Statistics. The agency looks at the average CPI-W for July, August, and September of each year and compares it to the average for the same three months in the previous year.

For 2023, the July-September 2022 average was compared to the July-September 2021 average. The difference between those two periods was 8.7 percent. That percentage is then applied to all SSDI payments, effective with the first payment of the new year (which arrives in January for most recipients).

This calculation method is set by federal law. The Social Security Administration does not have discretion to adjust the percentage up or down. Once the CPI-W data is published, the COLA amount is determined automatically.

Who received the 2023 COLA increase

The 8.7 percent increase applied to every person receiving SSDI in 2023, with no exceptions based on age, work history, or the reason for disability. If you were on the SSDI rolls in December 2022, your January 2023 payment included the increase.

The increase also applied to family members receiving benefits on your record. If your spouse, ex-spouse, or children were receiving benefits based on your SSDI claim, their payments increased by 8.7 percent as well. This includes divorced spouses who had not remarried and adult children disabled before age 22.

Supplemental Security Income (SSI) recipients also received the 8.7 percent increase to their federal SSI payment in January 2023. However, SSI has a resource limit (the total amount of money and assets you can own), and that limit was not increased by the COLA. This meant some SSI recipients who were near the resource limit may have had to report the increase to Social Security to may support they remained within the allowed amount.

What changed and what stayed the same in 2023

The 8.7 percent increase applied only to the payment amount itself. Other rules and limits that govern SSDI did not change because of COLA. Your work incentives, the amount you can earn before benefits are affected, and the rules about reporting income all remained the same as they were in 2022.

However, the substantial gainful activity (SGA) limit — the amount of monthly earnings that can trigger a work incentive review — did increase for 2023. The SGA limit for non-blind individuals was $1,470 per month in 2023, up from $1,350 in 2022. This increase is separate from COLA and is set by a different formula based on wage data.

Your medical review schedule, the frequency with which Social Security reviews your case to confirm you still meet the disability criteria, was not affected by the COLA increase. If you were scheduled for a medical review in 2023, that review proceeded on its original timeline.

How the 2023 COLA compared to previous years

The 8.7 percent COLA for 2023 was unusually large. In the five years before 2023, COLA increases had been much smaller: 1.3 percent in 2022, 1.3 percent in 2021, 1.6 percent in 2020, 2.8 percent in 2019, and 2.0 percent in 2018. The 2023 increase reflected the rapid inflation that occurred in 2021 and 2022.

The 8.7 percent figure was the highest COLA since 1981, when the increase was 11.2 percent. Between 1982 and 2022, no COLA had exceeded 4.2 percent. This made 2023 a significant year for SSDI recipients whose payments had grown slowly or not at all for many years.

The 2024 COLA, announced in October 2023, was 3.2 percent — a return to smaller increases. This pattern reflects the fact that COLA is tied directly to inflation, which rose sharply in 2021 and 2022 but began to moderate in 2023.

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

Most SSDI recipients saw the 8.7 percent increase in their January 2023 payment automatically. However, some situations could have prevented the increase from appearing on your check.

If you were a representative payee (someone else manages your benefits on your behalf), the increase still applied to your account, but the payee may have held the funds or used them for your care. You can contact Social Security to ask how your increase was used.

If you had a work incentive in place, such as a Plan to Achieve Self-Support (PASS), the increase still applied, but some of it may have been counted as income under your plan. If you were working and your earnings were close to the SGA limit, the increase to your payment might have triggered a work incentive review. In either case, contact your local Social Security office to understand how the increase affected your specific situation.

Frequently Asked Questions

Does COLA explore to people who started SSDI in 2023?

No. COLA applies only to people already receiving SSDI when the adjustment takes effect. If you started receiving SSDI in January 2023 or later, your initial payment was calculated using the 2023 benefit formula, but you did not receive a separate COLA increase on top of that. You will be included in future COLA adjustments once you have been on the rolls for a full year.

Can I get back pay for the 2023 COLA if I missed it?

If your payment was delayed or stopped for any reason in late 2022 or early 2023, and you were later found to be may have access to to benefits, you may be owed back pay that includes the 2023 COLA. Contact your local Social Security office with documentation of when your benefits should have started. They can calculate what you are owed.

Did the 2023 COLA affect my Medicare premiums?

For most SSDI recipients, Medicare Part B premiums are deducted from your SSDI check. In 2023, the standard Part B premium was $164.90 per month, down from $170.10 in 2022. Because the premium decreased while your SSDI payment increased, most recipients saw a larger net increase in their take-home payment than the 8.7 percent COLA alone would suggest.

What if I am receiving both SSDI and SSI?

Both payments received the 8.7 percent increase in January 2023. However, if your SSDI increase pushed your total income above the SSI limit, your SSI payment may have been reduced or stopped. Contact Social Security to understand how both payments were adjusted in your case.

Is the 2023 COLA permanent?

Yes. The 8.7 percent increase became part of your ongoing monthly payment amount. It does not expire or revert. Future COLA adjustments will be calculated as a percentage of this new, higher amount, not the 2022 amount.