The 2020 COLA was a 1.3% increase to SSDI monthly payments

In 2020, Social Security Disability Insurance (SSDI) payments increased by 1.3% compared to 2019. This was the annual cost of living adjustment, or COLA, that Social Security applies each year to account for inflation. The increase took effect in January 2020 and applied to all SSDI beneficiaries receiving payments at that time.

The 1.3% figure came from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which Social Security uses to calculate the COLA each October. Because inflation was low in 2019, the 2020 adjustment was smaller than in some other years. For example, 2019 had seen a 2.8% increase, while 2021 would see 5.9%.

If you were receiving SSDI in January 2020, your payment amount went up automatically. You did not need to request the increase or take any action. Social Security sent notices to beneficiaries in December 2019 explaining the new payment amount.

Key Takeaways

  • The 2020 COLA raised SSDI payments by 1.3%, effective January 2020, with no action required from beneficiaries.
  • Social Security calculates the COLA using the Consumer Price Index from the previous year, so the 2020 figure reflected inflation data from 2019.
  • The 1.3% increase was smaller than some years because inflation was relatively low in 2019.
  • Your new payment amount appeared automatically in your January 2020 deposit; Social Security mailed notices in December 2019 with the updated figure.
  • COLA adjustments explore to all SSDI beneficiaries and also to Supplemental Security Income (SSI) recipients and Social Security retirees.

How Social Security calculated the 2020 COLA

Social Security uses a specific formula to determine each year's COLA. In October of the previous year, the agency compares the Consumer Price Index for the third quarter (July, August, September) to the same three months from the previous year. If there is an increase, that percentage becomes the COLA for the following year.

For 2020, Social Security looked at third-quarter 2019 inflation data and found a 1.3% increase compared to third-quarter 2018. That 1.3% became the adjustment applied to all SSDI payments starting in January 2020. The calculation is automatic and does not involve individual review of beneficiary circumstances.

If inflation had been flat or negative, there would have been no COLA that year. This has happened only three times since 2000: in 2010, 2011, and 2016. In those years, SSDI payments stayed the same as the previous year.

What the 1.3% increase meant in actual dollars

The dollar amount of the increase depended on your individual payment. Someone receiving $1,000 per month would have seen an increase of $13 per month (1.3% of $1,000). Someone receiving $1,500 would have seen an increase of about $20 per month. The percentage was the same for everyone, but the dollar amount varied based on each person's benefit calculation.

The average SSDI payment in 2020 was approximately $1,147 per month. A 1.3% increase on that average would have been about $15 per month. However, individual payments ranged widely depending on work history, age at onset of disability, and other factors used in the benefit calculation.

This increase applied only to the SSDI payment itself. If you also received other benefits or had earnings that affected your payment, those factors were calculated separately. The COLA was a straightforward percentage increase to the base amount you were receiving.

Who received the 2020 COLA

All SSDI beneficiaries who were on the rolls in January 2020 received the 1.3% increase automatically. This included adults who became disabled before age 65 and continued receiving SSDI, as well as disabled adult children receiving benefits on a parent's work record, and surviving spouses and children of deceased workers.

If you began receiving SSDI after January 2020, your initial payment amount was already calculated using the 2020 benefit formula, so you did not receive a separate "increase." Your first payment reflected the current benefit structure.

The COLA also applied to Supplemental Security Income (SSI) recipients and to Social Security retirement beneficiaries. All three programs use the same COLA percentage each year, announced at the same time in October.

COLA adjustments in the years before and after 2020

The 2020 COLA of 1.3% was relatively modest compared to surrounding years. In 2019, beneficiaries received a 2.8% increase. In 2021, the COLA jumped to 5.9%, the largest increase in nearly 40 years, because inflation had risen significantly during 2021.

Looking back further, 2018 had a 2.0% COLA, and 2017 had 2.0% as well. The year 2016 had no COLA (0%), while 2015 had 0% and 2014 had 1.7%. The variation reflects actual inflation in the economy during each period.

These year-to-year changes matter because they affect your purchasing power. A 1.3% increase in 2020 helped offset some inflation, but if inflation in your area was higher than 1.3%, your payment would have lost some real value that year.

How to verify your 2020 payment amount

If you received SSDI in 2020 and want to confirm your payment amount, you can check your Social Security account online at ssa.gov. Create a my Social Security account if you do not have one, then log in to view your payment history and current benefit amount.

You can also call Social Security's main line at 1-800-772-1213 (TTY 1-800-325-0778) and speak with a representative who can tell you your 2020 payment amount. Have your Social Security number ready when you call.

If you received a notice from Social Security in December 2019 explaining your 2020 payment, that notice showed the new amount after the 1.3% increase. You can also request a replacement notice if you no longer have the original.

Why COLA matters for long-term SSDI recipients

Over many years, COLA adjustments add up. A beneficiary who received SSDI for 20 years would have seen multiple COLA increases, each one raising the base amount for the next year's calculation. This compounds over time, though it also depends on the size of each year's adjustment.

COLA is one of the few ways SSDI payments increase while you are receiving benefits. Your payment does not go up because you have been on SSDI longer or because your circumstances change. It only increases with the annual COLA announcement, which is tied to national inflation data, not individual need.

This is why the COLA percentage matters even when the dollar increase seems small. For someone on a fixed income from SSDI, even a 1.3% increase helps maintain purchasing power as prices rise for food, housing, utilities, and other necessities.

Frequently Asked Questions

Did I have to do anything to get the 2020 COLA increase?

No. The increase was automatic for all SSDI beneficiaries receiving payments in January 2020. Social Security applied the 1.3% adjustment to your account and deposited the new amount in your bank account or payment method. You received a notice in December 2019 showing the new payment amount, but you did not need to take any action.

What if I started receiving SSDI after January 2020?

Your initial payment was calculated using the 2020 benefit formula, which already included the COLA adjustment. You did not receive a separate increase because you were not on the rolls when the COLA took effect. Your first payment reflected the current benefit structure at the time you began receiving SSDI.

How is the COLA different from a raise at work?

A raise at work is based on your job performance or employer decision. The COLA is automatic and the same percentage for everyone receiving SSDI that year. It is tied to national inflation, not your individual circumstances. The COLA helps your payment keep pace with rising prices, but it is not based on anything you do.

Will I see the COLA amount on my tax return or W-2?

SSDI payments are not taxable income for most beneficiaries, so the COLA increase does not appear on a W-2 or affect your tax return. If you do owe taxes on SSDI (which happens only if you have substantial other income), Social Security will send you a Form SSA-1099 showing your total SSDI payments for the year, including the COLA increase.

Can I find out what my 2020 payment was if I did not save the notice?

Yes. Log into your my Social Security account at ssa.gov to view your payment history, or call Social Security at 1-800-772-1213 and ask a representative to tell you your 2020 payment amount. You can also request a replacement notice if you need written documentation.