The 2020 COLA raised SSDI payments by 1.6 percent

In October 2019, the Social Security Administration announced a 1.6 percent cost of living adjustment (COLA) for benefits paid in 2020. This meant that starting with the December 2019 payment (received in January 2020), every person receiving SSDI saw their monthly benefit amount increase by 1.6 percent. The exact dollar increase depended on what you were receiving before the adjustment.

The 1.6 percent figure came from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), measured from the third quarter of 2018 to the third quarter of 2019. Social Security calculates COLA each year using this same method, comparing prices over that specific nine-month window. The 2020 adjustment was smaller than some years and larger than others—it reflected actual inflation during that period, not a fixed or may provide amount.

Key Takeaways

  • The 2020 COLA of 1.6 percent applied to all SSDI beneficiaries starting with the January 2020 payment, with no action required on your part.
  • Your new benefit amount was calculated automatically by Social Security and appeared on your payment stub without you needing to report anything.
  • The increase was based on the Consumer Price Index measured from mid-2018 to mid-2019, not on legislative action or political decisions.
  • If you were also receiving Supplemental Security Income (SSI), you received a separate COLA adjustment that year, which was also 1.6 percent.

How the 1.6 percent increase worked in practice

If you were receiving $1,200 per month in SSDI before the 2020 adjustment, your new payment became $1,219.20 per month—an increase of $19.20. If you were receiving $800 per month, you received an additional $12.80. The increase was proportional: everyone's benefit went up by exactly 1.6 percent of what they were already receiving.

You did not need to do anything to receive this increase. Social Security calculated and applied it automatically. Your payment stub or online account statement showed the new amount starting in January 2020. If you had questions about whether the adjustment was correct, you could contact Social Security to verify, but the vast majority of beneficiaries received the correct amount without issue.

The increase applied to your primary SSDI benefit only. If you were receiving benefits as a family—for example, if your children were also on your record as dependents—each family member's benefit increased by 1.6 percent as well. The total family maximum (the highest amount your household could receive in combined benefits) also adjusted upward.

Why 2020's adjustment was smaller than some years

The 1.6 percent COLA in 2020 was modest compared to some recent years. In 2019, the adjustment had been 2.8 percent. In 2018, it was 2.0 percent. The 2020 figure reflected slower inflation during the measurement period (mid-2018 to mid-2019), when prices for goods and services rose more slowly than they had in the previous year.

COLA amounts vary year to year because they are tied directly to inflation data, not to a formula that guarantees a minimum increase. Some years the adjustment is as low as zero (which happened in 2010, 2011, and 2016). Other years it exceeds 3 percent. The 1.6 percent in 2020 fell in the middle range of recent history.

What happened to SSI recipients in 2020

If you were receiving Supplemental Security Income (SSI) in addition to or instead of SSDI, you also received a 1.6 percent COLA increase in 2020. However, SSI and SSDI are separate programs with different rules, so the increase was calculated and applied separately for each program.

SSI recipients also saw the federal benefit rate (the base amount SSI pays) increase by 1.6 percent. In 2020, the federal benefit rate for an individual became $783 per month, up from $771. For a couple, it became $1,175 per month, up from $1,157. These are the maximum amounts; your actual payment depended on your income and resources.

How COLA affects your taxes and work incentives

The increase in your SSDI benefit amount could affect your taxes if you were working or had other income. Social Security benefits become partially taxable if your combined income (adjusted gross income plus nontaxable interest plus half your Social Security benefits) exceeds certain thresholds. The higher your SSDI payment, the more likely you were to cross those thresholds.

If you were using a work incentive like Impairment Related Work Expenses (IRWE) or Plan to Achieve Self-Support (PASS), the increase in your benefit amount did not directly change how those programs worked. However, if your benefit increase pushed you closer to the earnings limit for continuing to receive benefits, you needed to monitor your work income more carefully.

When you would have received notice of the 2020 increase

Social Security mailed a notice in December 2019 to all beneficiaries, explaining the 1.6 percent COLA and showing your new benefit amount. This notice arrived before the January 2020 payment, so you had time to see what the increase would be. If you had set up direct deposit (which most beneficiaries had), the new amount straightforward appeared in your bank account on the regular payment date.

If you did not receive a notice or if the amount shown seemed incorrect, you could contact Social Security by phone at 1-800-772-1213 (TTY 1-800-325-0778) or visit your local Social Security office. You could also create or log into your account at ssa.gov to view your payment history and verify the amount.

Frequently Asked Questions

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

No. Social Security calculated and applied the 1.6 percent increase automatically to all SSDI beneficiaries. You received it with no action required on your part. You straightforward saw the new amount in your January 2020 payment.

What if I thought the increase was calculated wrong?

Contact Social Security at 1-800-772-1213 to ask them to review your payment. Have your Social Security number and your payment stub from December 2019 and January 2020 ready so they can compare the amounts and verify the calculation.

Did the 2020 COLA affect my Medicare premiums?

It may have. If your SSDI increase pushed you into a higher income bracket, your Medicare Part B or Part D premiums could have changed. Social Security sends a separate notice about Medicare premium changes if they explore to you.

If I was in a work incentive program, did the COLA change my work limits?

The COLA itself did not change your work incentive rules, but your higher benefit amount meant you had less room before hitting your program's earnings limits. Review your work incentive plan with your representative payee or benefits planner to confirm your new thresholds.