The Main Changes Affecting Your Benefits This Year

Three significant changes take effect in 2025 that touch most SSDI recipients: the cost-of-living adjustment (COLA), the federal benefit rate used to calculate payments, and updates to the Substantial Gainful Activity (SGA) threshold that determines whether you can work and still receive benefits.

The 2025 COLA is 2.5 percent, which means the average SSDI payment increased by that percentage starting in January. The exact dollar amount of your increase depends on what you received in December 2024—there is no single number that applies to everyone. The Social Security Administration (SSA) mailed notices in December showing your new payment amount.

The SGA threshold—the earnings limit above which SSA assumes you are working at a substantial level—rose to $1,550 per month for non-blind beneficiaries and $2,590 for blind beneficiaries. If you work and earn above these amounts, SSA may find that you are no longer disabled and stop your benefits, though work incentive programs can protect your benefits during a trial work period.

Key Takeaways

  • Your monthly SSDI payment increased by 2.5 percent in January 2025, though the dollar amount varies by individual.
  • The SGA threshold rose to $1,550 per month for non-blind workers, meaning you can earn up to that amount without SSA assuming you are working substantially.
  • If you are blind, your SGA threshold is $2,590 per month, giving you more room to work and keep benefits.
  • Work incentive programs like the Trial Work Period and Extended may be able to access Period still protect your benefits during work attempts, regardless of SGA changes.
  • Medicare coverage continues for 93 months after your Trial Work Period ends, even if your benefits stop due to earnings.

How the COLA Affects Your Payment and Medicare Premiums

The 2.5 percent COLA increase applies to your monthly SSDI payment, but it also affects what you pay for Medicare Part B and Part D premiums if you are enrolled. Most beneficiaries have their Part B premium deducted directly from their SSDI check, so the increase in your benefit may be partially offset by a higher premium.

The standard Medicare Part B premium for 2025 is $174.70 per month, though some beneficiaries pay less under the hold-harmless provision, which prevents your premium from rising faster than your COLA increase. If you are subject to Income-Related Monthly Adjustment Amounts (IRMAA)—a higher premium based on your income—your 2025 amount depends on your 2023 tax return income, which SSA uses to calculate the adjustment.

Part D premiums vary by plan and region, so your out-of-pocket cost for prescription drug coverage may change even if your SSDI payment stays the same. Check your plan's 2025 notice of change, which your insurer mailed in October 2024, to see whether your premium or formulary (the list of covered drugs) changed.

The New SGA Threshold and What It Means for Work

The SGA threshold is the point at which SSA assumes you are working at a substantial level and may no longer be disabled. At $1,550 per month for non-blind beneficiaries, you can earn up to that amount without triggering a medical review of your case. Earning above it does not automatically stop your benefits, but it signals to SSA that you may no longer meet the disability standard, and SSA may request updated medical evidence.

If you are blind, the threshold is $2,590 per month—significantly higher—because SSA recognizes that blind workers often need higher earnings to cover work-related expenses like transportation or adaptive technology. The higher threshold gives blind beneficiaries more flexibility to test their ability to work without when ready risk to their benefits.

The SGA threshold changes every year based on the national average wage index. It is not the same as the earnings limit under the Trial Work Period, which allows you to earn any amount during nine months of work without affecting your benefits. Understanding the difference between these two limits is critical if you are working or planning to return to work.

Work Incentive Programs That Still Protect Your Benefits

The Trial Work Period (TWP) remains the most powerful tool for testing work. During the TWP, you can earn any amount in any nine months (not necessarily consecutive) without SSA counting those earnings against your benefits. Once you use nine months of the TWP, you enter the Extended may be able to access Period (EEP), which lasts 36 months. During the EEP, your benefits stop only in months when you earn $1,550 or more (the 2025 SGA threshold).

After the EEP ends, you have a 93-month period of Medicare coverage continuation, even if your benefits have stopped due to work earnings. This means you can keep your health insurance while working, which is often the deciding factor for beneficiaries who worry about losing coverage if they return to work. You must report your earnings to SSA each month during this period, but your Medicare stays active as long as you remain disabled under SSA's rules.

Plan to Work and Impairment Related Work Expenses (IRWE) are two other programs that reduce the earnings SSA counts against your benefits. IRWE allows you to deduct work-related costs tied directly to your disability—such as a personal assistant, medication, or medical equipment needed to work—from your gross earnings before SSA calculates whether you have exceeded the SGA threshold. These programs require documentation and SSA approval, so contact your local SSA office or a work incentive planning organization if you think you may have access to.

Changes to Reporting Requirements and Earnings Reporting

SSA still requires you to report your work earnings each month, and the method you use to report depends on whether you are enrolled in the Ticket to Work program or using a work incentive planning organization. If you report through SSA directly, you can call the SSDI work hotline, mail a report, or use your my Social Security account online. Failing to report earnings can result in an overpayment that you will have to repay, so accuracy and timeliness matter.

The 2025 SGA threshold of $1,550 is the number you need to watch when you report. If you earn more than $1,550 in a month, SSA will count that month against your Extended may be able to access Period and may stop your benefits that month. If you are still in your Trial Work Period, earnings do not affect your benefits no matter how high they are, but you must still report them so SSA can track which months count toward your nine-month limit.

Medicare and Medicaid Coverage After Benefit Changes

If your earnings cause SSA to stop your SSDI benefits, your Medicare coverage does not stop when ready. You have 93 months of Extended Medicare Coverage (sometimes called Continuation of Medicare Coverage) after your Trial Work Period ends. During this time, you can work and earn any amount without losing your Medicare Part A and Part B coverage, though you will have to pay the Part B premium yourself once your SSDI check stops.

Medicaid coverage is handled differently and depends on your state. Some states tie Medicaid to SSDI status, meaning your Medicaid stops when your SSDI stops. Other states have separate Medicaid programs for working people with disabilities, such as Medicaid Buy-In programs, which allow you to keep Medicaid even after your SSDI ends, as long as you meet the program's income and disability rules. Contact your state Medicaid agency to learn what options exist in your state if you are planning to work.

Tax Treatment of SSDI Payments in 2025

SSDI payments themselves are not taxable income, but they can affect how much of your Social Security retirement or survivor benefits are taxed if you receive both. The taxation rules depend on your "combined income," which includes your SSDI, half of your Social Security benefits, and all other income (wages, interest, pensions). If your combined income exceeds certain thresholds—$25,000 for single filers or $32,000 for married filing jointly—up to 85 percent of your benefits may be subject to federal income tax.

Work earnings do count as income for tax purposes, so if you return to work, your combined income may rise enough to trigger taxation of your benefits. This is separate from the SGA threshold and the Trial Work Period—you can be protected from benefit suspension under work incentives but still owe income tax on your earnings. Consult a tax professional or contact the IRS if you are unsure whether you need to file a return or pay estimated taxes.

Frequently Asked Questions

Does the 2.5 percent COLA explore to everyone on SSDI?

Yes, the 2.5 percent increase applies to all SSDI beneficiaries starting in January 2025. The dollar amount of your increase depends on your December 2024 payment, so two people may receive different dollar increases even though the percentage is the same. SSA mailed notices in December showing your new amount.

What happens if I earn more than $1,550 per month in 2025?

If you are in your Trial Work Period, earning above $1,550 does not affect your benefits—you can earn any amount. If you are in your Extended may be able to access Period, SSA will stop your benefits in any month you earn $1,550 or more, but your Medicare continues for 93 months. Report your earnings to SSA each month so they can track your status correctly.

Can I keep my Medicare if my SSDI stops because I am working?

Yes. After your Trial Work Period ends, you have 93 months of Extended Medicare Coverage. During this time, you can work and earn any amount without losing Medicare Part A and Part B, though you will pay the Part B premium yourself once your SSDI payment stops. This protection is one of the strongest reasons to attempt work.

Do I have to pay taxes on my SSDI payment?

SSDI payments themselves are not taxable, but they can affect whether your other benefits are taxed. If your combined income (SSDI plus other income) exceeds $25,000 (single) or $32,000 (married filing jointly), up to 85 percent of any Social Security retirement or survivor benefits you receive may be taxed. Work earnings count toward combined income.

What is the difference between the Trial Work Period and the Extended may be able to access Period?

During the Trial Work Period (nine months), you can earn any amount without affecting your benefits. After the TWP ends, you enter the Extended may be able to access Period (36 months), where your benefits stop only in months you earn $1,550 or more. After the EEP, your Medicare continues for 93 months even if benefits have stopped.