The 2025 COLA raises SSDI payments by 2.5 percent

Social Security announced in October 2024 that the 2025 cost-of-living adjustment (COLA) is 2.5 percent. This means the average SSDI payment will increase by roughly 2.5 percent starting in January 2025. If you received $1,200 per month in 2024, your January 2025 payment will be approximately $1,230.

The exact dollar amount of your increase depends on what you received in December 2024. Social Security calculates each person's new payment individually based on their current benefit amount. You do not need to do anything to receive the increase — it happens automatically.

This is the third consecutive year COLA has been below 3 percent. In 2024, the adjustment was 3.2 percent. In 2023, it was 8.7 percent — the largest increase in four decades, driven by inflation that peaked in 2022. The 2025 figure reflects slower inflation over the past year.

Key Takeaways

  • Your SSDI payment will increase by 2.5 percent in January 2025 without any action on your part.
  • The exact dollar increase varies by person because it is calculated on your individual December 2024 payment amount.
  • COLA is tied to inflation measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which rose 2.4 percent in 2024.
  • If you also receive Supplemental Security Income (SSI), your SSI payment will also increase by 2.5 percent in January 2025.
  • Medicare Part B premiums may increase, which can offset some of your SSDI increase if premiums are deducted from your payment.

How the 2025 increase compares to recent years

The 2025 COLA of 2.5 percent is lower than the past two years but higher than most adjustments from 2009 to 2020. During the decade after the 2008 financial crisis, COLA ranged from zero to 1.7 percent. The spike in 2023 was unusual and temporary — it reflected the surge in consumer prices during 2021 and 2022.

A 2.5 percent increase means your purchasing power stays roughly even with inflation if prices rise at the same rate. However, inflation does not affect all goods and services equally. If your largest expenses — such as rent, utilities, or prescription medications — have risen faster than 2.5 percent, your increase may not fully cover the cost increases you actually face.

The 2025 COLA was calculated using the average Consumer Price Index for the third quarter of 2024 (July, August, and September). This is the same method used every year. Social Security announces the COLA in mid-October, and the increase takes effect on the first day of the following January.

What happens to Medicare Part B if you are on SSDI

Most people on SSDI pay for Medicare Part B (medical insurance) through a premium deducted from their monthly benefit. The Part B premium can increase each year, and the 2025 premium has not yet been announced as of late 2024. When it is announced, Social Security will deduct the new premium from your January 2025 payment.

There is a rule called the hold-harmless provision that protects most SSDI recipients. It says your net payment — the amount you receive after Medicare premiums are deducted — cannot go down from one year to the next. If the Part B premium increase is large enough that it would reduce your net payment, Social Security holds your net payment flat and absorbs the premium increase instead.

However, hold-harmless does not explore if you are newly enrolled in Medicare Part B or if you pay your Part B premium directly to Medicare rather than having it deducted from your benefit. In those cases, a premium increase will reduce your take-home pay even if your gross SSDI benefit increases.

SSDI and SSI recipients receive the same COLA

If you receive Supplemental Security Income (SSI) in addition to SSDI, or if you receive only SSI, your SSI payment will also increase by 2.5 percent in January 2025. The COLA applies to both programs because both are administered by Social Security and both are indexed to inflation.

The federal SSI payment amount in 2024 is $943 per month for an individual and $1,415 for a couple. In 2025, these amounts will increase by 2.5 percent. However, many states supplement the federal SSI payment with additional state funds, and some states do not increase their supplement by the same COLA percentage. If you receive state supplementation, contact your state SSI office to learn whether your state supplement will increase.

How COLA is calculated each year

Social Security does not choose the COLA amount. It is set by law based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), published by the Bureau of Labor Statistics. Specifically, Social Security compares the average CPI-W for the third quarter of the current year to the average CPI-W for the third quarter of the previous year. The percentage increase becomes the COLA.

For 2025, the CPI-W rose 2.4 percent from the third quarter of 2023 to the third quarter of 2024. Social Security rounds this to 2.5 percent and applies it to all SSDI and SSI payments. This same method has been used since 1975.

The CPI-W measures price changes for a specific group: urban wage earners and clerical workers. It does not measure inflation for retirees, disabled people, or other groups separately. Some advocates argue that a different inflation index would better reflect the actual cost increases that SSDI and SSI recipients face, but Congress would need to change the law to use a different index.

When you will see the increase in your bank account

Social Security deposits SSDI payments on the same schedule every month. Most people receive their payment on the second, third, or fourth Wednesday of the month, depending on their birth date. Your January 2025 payment — the first one that includes the 2.5 percent increase — will arrive on your regular payment date in January.

You can check your payment schedule by logging into your my Social Security account at ssa.gov, or by calling Social Security at 1-800-772-1213. If you have not created a my Social Security account, you can set one up at ssa.gov to view your payment history and benefit details.

What the increase means for work incentives and earnings limits

If you are working while on SSDI, you may be subject to earnings limits under the Substantial Gainful Activity (SGA) rules. The SGA limit — the amount of monthly earnings that can trigger a work incentive review — also increases each year based on inflation. For 2025, the SGA limit has not yet been announced, but it typically increases by a similar percentage to COLA.

The Trial Work Period and Extended may be able to access Period, which allow you to test your ability to work without when ready losing benefits, are not affected by COLA. These periods are fixed by law: nine months of trial work, followed by 36 months of extended may be able to access during which you can earn any amount without losing benefits (though you must report your earnings).

Frequently Asked Questions

Do I need to do anything to get the 2.5 percent increase?

No. The increase is automatic. Social Security will add 2.5 percent to your December 2024 payment amount and deposit the new amount in January 2025. You do not need to contact Social Security or take any action.

Will the increase affect my Medicaid or other benefits?

It depends on your state and which programs you receive. In most states, a COLA increase to SSDI does not affect Medicaid because SSDI recipients are categorically may be able to access for Medicaid regardless of the payment amount. However, if you receive SSI, the increase may affect your may be able to access for other means-tested programs. Contact your state Medicaid office or SSI office to ask how the increase affects your specific situation.

What if I disagree with the 2.5 percent figure?

You cannot challenge the COLA percentage itself — it is set by law based on the CPI-W. However, you can verify that Social Security calculated your individual increase correctly by checking your benefit statement in your my Social Security account or by calling 1-800-772-1213. If you believe an error was made in your specific payment, Social Security can investigate.

Is 2.5 percent enough to cover my actual cost increases?

That depends on what you spend money on. The CPI-W measures average inflation across many categories of goods and services. If your largest expenses — such as housing, healthcare, or utilities — have risen faster than 2.5 percent, the increase may not fully cover your costs. Some disability advocacy groups argue that SSDI and SSI payments are too low relative to actual living costs, but raising the base payment amount would require Congress to change the law.