If you are new to Social Security Disability Insurance benefits, then you may have heard about a potential increase next year and you may have even heard about the increase last year. Do SSDI benefits increase every year? The answer is a little complicated, but we can walk you through it, and in the process, you will learn what a COLA is and how it works as well.
Is There Always a Cost of Living Adjustment for SSDI?
A cost of living adjustment—or COLA as it is commonly called—is the primary way that your SSDI benefits increase. As you may or may not know, SSDI benefits are otherwise static. They do not increase if your disability worsens or improves. Though they can be taken away entirely if your disability improves. Instead, SSDI benefits—just like retirement benefits—are based on work history. In fact, your SSDI benefit amount is the same as your full Social Security retirement benefit would be, and once you reach full retirement age, your SSDI benefits change to retirement benefits at the same amount automatically.
Read More: What Can Make You Lose Your SSDI Benefits?
When it comes to your yearly COLA, you can’t always expect one. In truth, most years will see at least a small COLA, but in the past, there have been a total of three years where there wasn’t a COLA.
Why Would the SSDI COLA Be Zero?
The COLA is essentially based on inflation. It looks at certain consumer price indexes specifically in the third quarter of the year to determine what the COLA should be for next year. This means if inflation was near zero, then your COLA could also be zero as it was in 2009, 2010, and 2015.
Now you may be wondering about deflation. Deflation is essentially negative inflation. In other words, a dollar you had one year is actually worth a little more the next year. This is typically a bad economic trend, but it has happened. There was high deflation during the Great Depression, which of course is before COLA or even the SSDI program in general, but there was also very slight deflation (-0.1%) in 2009 and 2015. Deflation doesn’t make the COLA go negative though. Instead, the COLA bottoms out at 0%.
This also means that the annual COLA is an automatic increase. The increase is not subject to a vote or the passing of a budget. Budgetary issues at the federal level may lead to you getting your benefits late at times, but without a change to current Social Security legislation, you can rely on your SSDI benefits to keep up with inflation because of the automatic COLA measures that are already in place and have been since 1975.
How is Your SSDI Increase Calculated?
COLA is a percentage. For the 2023 COLA (which is sometimes referred to as the 2022 COLA as it was based on the 2022 economy) the COLA actually hit the highest percentage in decades at 8.7%. The 2024 increase is expected to be far lower.
You can think of this percentage as a raised percentage. For example, if the increase was 3%, you could just take your current benefits and multiply it by 1.03 to see what your new benefit would be.
Is SSDI the Only Program Affected by COLA
No, SSDI isn’t the only government benefits program affected by the COLA. The same COLA is also used in the same way to calculate the increase in Supplemental Security Income benefits. In a relatively recent change, the COLA now also applies to VA benefits as well in a similar fashion.
Help With a Denied SSDI Claim
If you need legal help with a denied SSDI claim, then Tabak Law is here for you. We have decades of combined experience working with SSDI cases. We do not get paid unless we win and get your claim approved, and we only get paid from your back pay so there is no ongoing cost to you. You can reach out to us today online for a free case review.