Yes, SSDI received a 8.7% cost of living adjustment in 2023

Social Security Disability Insurance (SSDI) payments increased by 8.7% in 2023, effective January 1st. This was the largest increase in four decades. The increase applied automatically to all people receiving SSDI — you did not have to do anything to receive it.

The 8.7% figure came from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures inflation across the economy. Social Security calculates the annual cost of living adjustment (COLA) each October based on how much prices rose from July through September compared to the same months the previous year. In 2022, prices had risen sharply, which is why the 2023 COLA was unusually large.

If you were receiving SSDI on January 1, 2023, your payment amount increased automatically. The Social Security Administration sent notices in December 2022 showing the new payment amount starting in January. If you did not receive a notice, you can check your current payment amount by logging into your Social Security account online or calling 1-800-772-1213.

Key Takeaways

  • The 2023 COLA increase of 8.7% applied to all SSDI recipients automatically with no action required on your part.
  • The increase took effect on January 1, 2023, and Social Security mailed notices in December 2022 showing the new payment amount.
  • COLA increases are calculated each year based on inflation data from July through September, so the percentage changes annually.
  • If you were receiving SSDI before January 1, 2023, you received the full 8.7% increase; if you started SSDI after that date, your initial payment already reflected the new rate.

How the 2023 increase compared to previous years

The 8.7% increase in 2023 was significantly larger than the increases from the previous three years. In 2022, SSDI recipients received a 5.9% increase. In 2021, the increase was 1.3%. In 2020, it was 1.6%. The 2023 increase reflected the sharp rise in prices that occurred during 2021 and 2022, particularly for food, energy, and housing.

COLA increases vary from year to year because they depend entirely on inflation. When inflation is low, the COLA is low or sometimes zero. When inflation is high, the COLA is high. There is no set percentage — it changes based on what actually happened to prices in the economy.

What the 8.7% increase meant in actual dollars

The dollar amount of the increase depended on how much you were receiving before January 2023. Someone receiving $1,000 per month would have seen an increase of about $87 per month. Someone receiving $1,500 per month would have seen an increase of about $130 per month. The exact amount varied slightly depending on rounding and individual circumstances.

Your new payment amount after the 2023 increase was shown on the notice Social Security mailed in December 2022. If you lost that notice or want to confirm the current amount, you can check your Social Security account at ssa.gov or call 1-800-772-1213 to speak with a representative.

When you receive SSDI after a COLA takes effect

If you started receiving SSDI after January 1, 2023, your initial payment amount already included the 8.7% increase. You did not receive a separate notice about the COLA because the increase was already built into your first payment. The rate you receive is the rate that was in effect when your SSDI began.

This matters if you are currently in the process of explore for SSDI or waiting for a decision. Your payment amount, if approved, will be based on the current COLA rate in effect at the time you are approved, not on a previous year's rate.

How COLA affects other benefits you might receive

If you receive both SSDI and Supplemental Security Income (SSI), both payments increased by 8.7% in 2023. If you receive SSDI and also receive benefits from another source — such as a pension from a job where you did not pay Social Security taxes — the COLA increase to your SSDI does not affect the other benefit. Each program calculates its own increases separately.

If you are a family member receiving benefits on your SSDI record (such as a spouse or child), their payments also increased by 8.7% in 2023. The COLA applies to the entire household's benefits, not just the primary recipient's payment.

Why 2023 was unusual for COLA increases

The 8.7% increase in 2023 was the largest COLA since 1981. Most years, COLA increases are much smaller — often between 1% and 3%. The 2023 increase was large because inflation was unusually high in 2021 and 2022. Prices for groceries, gasoline, rent, and utilities rose sharply during that period, which is what the CPI-W measures.

By late 2022 and into 2023, inflation began to slow down. This means the COLA for 2024 and beyond would likely be smaller than 8.7%, though the exact percentage would not be known until October when Social Security calculates it based on the most recent inflation data.

Frequently Asked Questions

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

No. The increase was automatic for all SSDI recipients. You did not need to contact Social Security, submit any forms, or take any action. If you were receiving SSDI on January 1, 2023, the increase was added to your payment automatically.

What if I did not receive a notice about the 2023 COLA?

Social Security mailed notices in December 2022 to all SSDI recipients showing the new payment amount. If you did not receive one, it may have been lost in the mail. You can check your current payment amount by logging into your Social Security account at ssa.gov or by calling 1-800-772-1213.

Does the COLA increase affect how much I can earn while on SSDI?

The COLA increase does not change the earnings limits for SSDI. The substantial gainful activity (SGA) limit — the amount you can earn before it affects your benefits — is set separately each year and is different from the COLA. You should check the current SGA limit on the Social Security website or by calling 1-800-772-1213.

Will there be another COLA increase in 2024?

Yes, there will be a COLA for 2024, but the percentage will be different from 8.7%. Social Security calculates the 2024 COLA in October 2023 based on inflation data from July through September 2023. The announcement is typically made in mid-October, and the increase takes effect on January 1, 2024.