The 2023 SSDI payment increase was 8.7 percent, the largest raise in four decades

Social Security Disability Insurance (SSDI) payments rose by 8.7 percent in January 2023. This was the biggest annual increase since 1981. The raise came from the Cost of Living Adjustment (COLA), which Social Security recalculates every October based on inflation data from the prior nine months.

The 8.7 percent figure applied to everyone receiving SSDI—there were no exceptions based on age, work history, or when you started collecting. If you received $1,000 per month in December 2022, your January 2023 payment was $1,087. The increase was automatic; you did not have to request it or contact Social Security.

This was a one-time adjustment for the 2023 calendar year. The 2024 COLA was 3.2 percent, and the 2025 COLA is 2.5 percent. Each year's adjustment depends entirely on inflation measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Key Takeaways

  • The 2023 COLA raised SSDI payments by 8.7 percent across the board, with no individual exceptions or process required.
  • The increase took effect in January 2023 and was based on inflation data Social Security collected from January through September 2022.
  • Your new payment amount appeared automatically in your bank account or on your payment card; Social Security mailed notices in December 2022 explaining the change.
  • COLA adjustments vary year to year and are tied directly to inflation, so future increases will be smaller or larger depending on the economy.

How the 8.7 percent was calculated

Social Security measures inflation using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This index tracks the cost of food, housing, transportation, medical care, and other goods and services. In October 2022, Social Security announced that the CPI-W had risen 8.7 percent between October 2021 and September 2022, so the 2023 COLA was set at 8.7 percent.

The calculation is mechanical: Social Security takes the CPI-W increase and applies it to your current payment amount. If you were receiving $1,200 per month, the agency multiplied $1,200 by 1.087 to get $1,304.40. The result is rounded to the nearest dollar. You cannot negotiate this number, and it does not vary based on your income, assets, or living situation.

The 8.7 percent was notably high because inflation spiked in 2021 and 2022 due to supply chain disruptions, pandemic-related spending, and rising energy costs. By late 2023 and into 2024, inflation had cooled, which is why the 2024 COLA dropped to 3.2 percent and the 2025 COLA is 2.5 percent.

When the increase hit your account

The 2023 COLA took effect on January 1, 2023, and the higher payment appeared in your account on January 3, 2023 (or the next business day if January 3 fell on a weekend). Social Security mailed notices in December 2022 telling you the new amount, but many people did not receive them until after the new year. If you did not get a notice, you could log into your my Social Security account online or call 1-800-772-1213 to confirm the new figure.

If you receive SSDI and also receive Supplemental Security Income (SSI)—a separate program for people with low income—your SSI payment also increased by 8.7 percent in January 2023. The two programs use the same COLA, though SSI has a resource limit ($2,000 for an individual) that SSDI does not.

How the 2023 increase affected Medicare and Medicaid

The 8.7 percent SSDI increase did not automatically change your Medicare or Medicaid coverage. However, if you were enrolled in Medicare Part B (medical insurance), your Part B premium may have changed. Social Security holds harmless most beneficiaries age 65 and older, meaning their Part B premium cannot rise faster than their COLA increase. But this rule does not explore to people under 65 who are on SSDI and Medicare—your Part B premium can rise independently of your COLA.

If you were on Medicaid, the 2023 COLA increase could have affected your case, depending on your state's rules. Some states use SSDI income limits to determine Medicaid coverage. A higher SSDI payment might have pushed you over the limit in a state that does not use the "1619(b) work incentive" (which allows some people to keep Medicaid despite higher earnings). You should have received a notice from your state Medicaid office if your coverage changed, but it is worth checking your Medicaid status after any COLA increase.

Impact on work incentives and trial work period

The 2023 COLA increase did not change the rules for the Trial Work Period (TWP) or the Extended may be able to access Period (EEP). These work incentives allow you to test your ability to work without when ready losing SSDI. However, the TWP uses a monthly earnings threshold—in 2023, any month in which you earned $970 or more counted as a work month. That threshold rose to $1,050 in 2024 and $1,110 in 2025, tied to a separate wage index that is not the same as COLA.

The Impairment Related Work Expenses (IRWE) deduction, which lets you subtract disability-related costs from your earnings, also has its own limits that change yearly. In 2023, there was no cap on IRWE deductions, but other work incentives like the Plan to Achieve Self-Support (PASS) have limits that do adjust with inflation. If you are working or planning to work, ask Social Security which thresholds explore to your situation.

Comparing 2023 to prior and future COLA years

The 2023 COLA of 8.7 percent was exceptional. For the five years before 2023, COLA adjustments were 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 average COLA from 2010 to 2022 was about 1.5 percent per year. The 2023 increase was more than five times the historical average.

Looking forward, future COLA adjustments will depend on inflation. If inflation stays near the Federal Reserve's 2 percent target, COLA increases will likely be in the 2 to 3 percent range. If inflation rises again, COLA could be higher. If deflation occurs (prices fall), COLA could be zero or negative, though Social Security law prevents COLA from going below zero for most beneficiaries.

The 2023 spike was a one-time event tied to specific economic conditions. It did not mean SSDI payments would keep rising at 8.7 percent annually. Each year stands alone, and the adjustment is announced in October for the following January.

What to do if you did not receive the increase

If your January 2023 payment did not reflect the 8.7 percent increase, contact Social Security when ready. Call 1-800-772-1213 (TTY 1-800-325-0778) or visit your local Social Security office. Have your Social Security number and your December 2022 and January 2023 payment stubs ready.

Errors are rare but do happen, especially if you have a representative payee (someone who manages your benefits on your behalf) or if your case involves both SSDI and SSI. If you use my Social Security online, you can also message Social Security through that portal and attach documents. Response times vary, but Social Security typically resolves payment discrepancies within two to four weeks.

Frequently Asked Questions

Did everyone on SSDI get the same 8.7 percent raise in 2023?

Yes. The COLA applies uniformly to all SSDI beneficiaries. Your specific payment amount depends on your prior benefit level, but the percentage increase was 8.7 percent for everyone. If you were receiving $500 per month, you got a $43.50 raise. If you were receiving $2,000 per month, you got a $174 raise.

What if I was in the middle of a work trial when the COLA happened?

The COLA increase did not affect your Trial Work Period or your work incentives. Your TWP months are counted based on earnings, not payment amounts. The 2023 COLA straightforward raised your monthly benefit check; it did not restart your TWP or change how many work months you had already used.

Can I refuse the COLA increase?

No. The COLA is automatic and mandatory. You cannot opt out or ask Social Security to hold your payment at the prior year's level. If a higher payment would cause problems with your Medicaid or other means-tested benefits, you should contact your state Medicaid office or a benefits planner to explore work incentives or other options.

How do I know what next year's COLA will be?

Social Security announces the next year's COLA in October. For example, the 2024 COLA (3.2 percent) was announced in October 2023, and the 2025 COLA (2.5 percent) was announced in October 2024. You can find the announcement on the Social Security website or by calling 1-800-772-1213.