What Changed in 2020

In 2020, Social Security Disability Insurance (SSDI) payments increased by 1.3 percent across the board. This was the Cost of Living Adjustment (COLA), an annual recalculation that raises all benefit amounts to account for inflation. The 2020 COLA was lower than the previous year's 2.8 percent increase, reflecting slower inflation in the economy during 2019.

The increase took effect in January 2020 and applied automatically to everyone receiving SSDI. You did not need to do anything to receive it — Social Security recalculated your payment and the new amount appeared in your account or check.

Key Takeaways

  • The 2020 COLA raised all SSDI payments by 1.3 percent, effective January 2020, with no action required on your part.
  • COLA is calculated each year based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures inflation in the previous year.
  • The 2020 increase was smaller than 2019's because inflation was lower in 2019 than in 2018.
  • Your new payment amount was shown on your Social Security statement and in your My Social Security account online.

How the 2020 COLA Was Calculated

Social Security uses a specific formula to determine the annual COLA. The agency calculates the average Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the third quarter of the current year, then compares it to the average for the third quarter of the previous year. The percentage difference becomes the COLA for the following January.

For 2020, the third-quarter 2019 CPI-W was lower than the third-quarter 2018 CPI-W, which is why the increase was modest. If inflation had been higher, the COLA would have been higher. If inflation had been negative (deflation), there would have been no COLA at all — Social Security does not reduce payments below the prior year's amount.

What the 2020 Increase Meant in Dollars

The exact dollar amount of your increase depended on your individual payment. Because the COLA was 1.3 percent, someone receiving $1,000 per month would have seen an increase of roughly $13 per month. Someone receiving $1,500 would have seen roughly $19.50 more per month. The increase was proportional to your existing benefit amount.

The 2020 COLA also raised the maximum family benefit and the earnings limit for the Substantial Gainful Activity (SGA) test, which determines whether you can work and still receive SSDI. These changes affected how much you could earn without risking your benefits.

Why 2020 Was Different From Other Years

Not every year brings the same COLA. The 2020 increase of 1.3 percent was lower than 2019's 2.8 percent, and much lower than 2008's 5.8 percent. The variation reflects real changes in the cost of living. When inflation is high, COLA is high. When inflation is low or flat, COLA is low or zero.

In some years — 2009, 2010, and 2016 — there was no COLA at all because inflation was too low. This meant beneficiaries received the same dollar amount as the previous year, even though prices for goods and services may have risen slightly. The lack of a COLA in those years was controversial because it meant the purchasing power of benefits declined.

How to Check Your 2020 Payment Amount

You could see your 2020 payment amount on your Social Security Statement, which was mailed to you before January 2020 if you were age 60 or older and not yet receiving benefits. If you were already receiving SSDI, the statement showed your new monthly amount starting in January.

You could also log into your My Social Security account online at ssa.gov to view your payment history and current benefit amount. The account showed the exact date the increase took effect and the new monthly payment. If you received direct deposit, the first payment at the new rate appeared in your bank account in early January 2020.

The Relationship Between COLA and Your Other Benefits

The 2020 COLA affected not only your SSDI payment but also any benefits tied to your record. If you had a spouse or child receiving benefits based on your work history, their payments also increased by 1.3 percent. The family maximum benefit — the total amount Social Security will pay to all family members on one worker's record — also rose.

If you were also receiving Medicare, the COLA influenced your Part B premium, though not in a direct way. Social Security uses a "hold harmless" rule that prevents your Part B premium from rising faster than your COLA increase. In 2020, this meant many beneficiaries saw their Part B premium stay the same or rise only slightly, even though the actual cost of Part B coverage increased.

Frequently Asked Questions

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

No. The COLA increase was automatic. Social Security recalculated all payments and the new amount took effect in January 2020 without any action on your part. You did not need to contact Social Security or submit any forms.

Why was the 2020 increase so small?

The 2020 COLA of 1.3 percent reflected inflation in 2019. Inflation that year was lower than in 2018, so the COLA was smaller. COLA is tied directly to the Consumer Price Index, which measures actual price changes in the economy.

Did the 2020 increase affect my work incentives or earnings limit?

Yes. The Substantial Gainful Activity (SGA) threshold — the amount you can earn and still receive SSDI — also increased in 2020. The new SGA limit was higher than 2019's, meaning you could earn more before your benefits were affected. Your state Vocational Rehabilitation agency or a work incentives planning organization could tell you the exact new limit.

What if I didn't receive the increase?

If your payment did not increase in January 2020, contact Social Security to verify your record. In rare cases, payment suspensions, overpayments, or other issues can prevent a COLA from taking effect. Social Security's toll-free number is 1-800-772-1213, and you can also visit your local office or create an account at ssa.gov.