The 2023 COLA raised SSDI payments by 8.7 percent, the largest increase in four decades
In October 2022, the Social Security Administration announced that SSDI payments would increase by 8.7 percent starting in January 2023. This was the biggest year-over-year raise since 1981. The increase was tied to inflation measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which tracks the cost of food, housing, energy, and other goods that affect household budgets.
The 8.7 percent figure applied to all SSDI beneficiaries — people receiving disability benefits and their family members who may have access to for benefits on a disabled worker's record. If you were receiving SSDI in December 2022, your January 2023 payment was automatically higher. You did not have to do anything to receive it.
The actual dollar amount of your increase depended on what you were receiving before the adjustment. Someone getting $1,000 per month in December 2022 would receive $1,087 in January 2023. Someone getting $1,500 would receive $1,630.50. The SSA sent notices in December 2022 showing the new payment amount for each beneficiary.
Key Takeaways
- The 2023 COLA of 8.7 percent was the largest increase since 1981 and affected all SSDI beneficiaries automatically starting January 2023.
- Your new payment amount was based on your December 2022 benefit, multiplied by 1.087, and you received a notice from Social Security showing the exact new amount.
- The COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers, which measures inflation in everyday costs like food and housing.
- If you were receiving SSDI in December 2022, the increase was applied automatically — you did not need to contact Social Security or take any action.
How the 2023 COLA was calculated
The COLA is not set by Congress or by Social Security leadership. It is determined by a formula written into federal law. The SSA compares the average Consumer Price Index for the third quarter of the current year (July, August, September) to the average CPI for the third quarter of the previous year. If the index went up, beneficiaries receive a COLA. If it stayed flat or went down, there is no increase that year.
In 2023, the CPI-W rose significantly because inflation was high throughout 2022. Prices for gasoline, groceries, rent, and utilities all increased faster than they had in previous years. The 8.7 percent COLA reflected those real increases in the cost of living. The announcement came in October 2022, giving the SSA three months to update payment records before the new amount took effect in January.
This automatic calculation means the COLA changes every year. There is no single "standard" increase. In 2022, the COLA was 5.9 percent. In 2024, it was 3.2 percent. The year-to-year variation depends entirely on inflation during that specific measurement period.
Who received the 2023 COLA increase
The 8.7 percent increase applied to all people receiving SSDI benefits in January 2023. This included disabled workers, adult children of disabled workers (if they became disabled before age 22), and surviving spouses and children of workers who died. It also applied to people receiving Supplemental Security Income (SSI), which is a separate program for people with low income and limited resources.
If you were receiving SSDI in December 2022 and remained on the rolls in January 2023, the increase was automatic. You did not have to reapply, contact Social Security, or submit any paperwork. The SSA updated its payment system in December and sent notices to all beneficiaries showing their new amount.
If you started receiving SSDI after January 2023, your first payment was already calculated using the new COLA-adjusted benefit formula. You did not receive a separate "increase" because you were not on the rolls during the previous year.
What the 2023 COLA meant for your monthly payment
The 8.7 percent increase was applied uniformly to all beneficiaries, but the dollar amount varied based on what each person was receiving. The table below shows examples of how the increase worked:
| December 2022 Payment | January 2023 Payment | Monthly Increase |
|---|---|---|
| $800 | $869.60 | $69.60 |
| $1,000 | $1,087 | $87 |
| $1,200 | $1,304.40 | $104.40 |
| $1,500 | $1,630.50 | $130.50 |
| $2,000 | $2,174 | $174 |
For most beneficiaries, the 2023 COLA was the first substantial increase in several years. The 2021 COLA was 1.3 percent, and the 2020 COLA was 1.6 percent. The jump to 8.7 percent in 2023 reflected a sharp rise in inflation during 2022, particularly in housing and energy costs.
When you would have received notice of the 2023 COLA
The Social Security Administration mailed notices to all SSDI beneficiaries in December 2022. The notice showed your December 2022 payment amount, the 8.7 percent increase, and your new January 2023 payment amount. If you were receiving direct deposit, the new amount appeared in your bank account on the first business day of January 2023 (or the last business day of December if January 1 fell on a weekend).
If you did not receive a notice in December 2022, you could have called Social Security at 1-800-772-1213 to confirm your new payment amount. You could also have created or logged into your account at ssa.gov to view your payment history and current benefit amount.
The notice was informational only — it did not require you to respond or take any action. Some beneficiaries kept the notice for their records; others discarded it. Either way, the payment increase took effect automatically.
How the 2023 COLA affected other benefits and programs
The 8.7 percent COLA increase affected more than just SSDI. It also applied to Social Security retirement benefits, survivor benefits, and Supplemental Security Income (SSI). Because SSI and SSDI are linked in the Social Security system, changes to one often affect the other.
The COLA also affected the federal benefit rate for SSI, which is the maximum monthly payment amount. In 2023, the federal SSI benefit rate increased from $841 per month (for an individual) to $914 per month. Some states add their own supplemental payments to SSI, and those amounts were also adjusted.
The COLA did not directly affect Medicare premiums or Medicaid coverage, though some beneficiaries saw changes in their Medicare Part B premiums based on separate calculations. If you were receiving both SSDI and Medicare, you should have reviewed your Medicare notices separately to understand any changes to your coverage or costs.
Frequently Asked Questions
Did I have to do anything to get the 2023 COLA increase?
No. The increase was automatic for all SSDI beneficiaries receiving payments in December 2022. Social Security updated its payment system in December and your new amount took effect in January 2023 without any action on your part.
What if I didn't receive a notice about the 2023 COLA?
Contact Social Security at 1-800-772-1213 or visit your local Social Security office to confirm your current payment amount. You can also log into your account at ssa.gov to view your payment history. If your payment did not increase in January 2023, there may be an issue with your account that needs to be resolved.
Does the COLA increase affect my Medicare or Medicaid?
The COLA increase to SSDI does not directly change your Medicare or Medicaid coverage. However, if your SSDI payment increased above certain thresholds, it could affect your may be able to access for other means-tested programs like SNAP or housing information. Review any notices you receive from those programs separately.
Will there be another COLA increase in 2024?
Yes. The Social Security Administration announces a new COLA every October for the following year. The 2024 COLA was 3.2 percent, which was lower than 2023 because inflation slowed during 2023. The 2025 COLA will be announced in October 2024 and will take effect in January 2025.
What if I started receiving SSDI after January 2023?
Your first payment was calculated using the new benefit formula that already included the 2023 COLA adjustment. You did not receive a separate increase because you were not on the rolls in December 2022. Your future COLA increases will be applied starting in January 2024 and beyond.