When you are relying on SSDI benefits or when you are in the application process, you always pay close attention to what those benefits are and how much they increase each year. We don’t know what 2024 benefits will look like yet, but we do have some reliable estimates. How much could SSDI increase in 2014? We have answers.
Current Estimate for 2024 SSDI Increase
This is only an estimate, but most sources are guessing it will increase by about 2.7%. What would that look like for you? Assuming that the increase is 2.7%, you would just have to use the simple formula below to see what your new monthly payments would be:
Current Monthly Benefit x 1.027 = New Monthly Benefit
Why is the 2024 Adjustment Lower Than 2023?
Unlike many government programs, SSDI along with SSI and VA benefits get an increase that’s automatic. It’s entirely based on the economy and since our economy has recovered substantially since 2022, the increase is lower.
This yearly increase is known as the COLA or cost of living adjustment. To reduce it down to its simplest terms, it is based on inflation, specifically comparing consumer price indexes from the third quarter of the previous year to the year before that. When determining the 2024 COLA, the government will compare 2022 and 2023’s 3rd quarter to see how much inflation has increased and whatever percentage that is will be the increase for 2024’s COLA.
How Certain is the 2024 COLA Estimate?
In 2022, there was a lot of speculation on the COLA percentages. Some estimates were as high as 11% while others were closer to 7% or even 6%. To put some of those numbers in perspective, the highest increase ever was 14.3% in 1981, followed by an 11.2% increase in 1982. The next highest increase actually did end up being the 2023 increase which wound up being 8.7%.
The estimates for the 2023 increase were all over the place because the economy wasn’t in a very stable position. Throughout the year, inflation numbers bounced between numbers as low as 6.5% and numbers as high as 9.1%, and with inflation numbers that high, runaway effects tend to happen, which led to some estimates being much higher.
Numbers in 2023 though have been much more stable than 2023 and have shown a steady decline every single month so far with the final numbers in June being just 3.0%. As we have only just begun the third quarter, something could always happen to spike inflation rates or even make them drop significantly. Just don’t count these chickens until they are hatched.
Read More: What Can You Do to Speed Up Your SSDI Claim?
Could the COLA Ever be Negative?
Deflation occurs when inflation goes below 0%. You may think if inflation is bad, then deflation must be good, but the actual truth is that for an economy a small amount of inflation is the best-case scenario. In fact, most countries including the United States, target an inflation rate somewhere around 2%.
Since the COLA is based on inflation though, and in the case of deflation, inflation could technically be negative, could that make your COLA negative as well? Luckily the government thought about that when signing these automatic increases into law back in the mid-’70s.
If deflation ever occurs, the COLA will be 0%. No matter how bad the deflation is, unless there is a change to the law, your COLA will never go below 0%. This has happened 3 times since the COLA was introduced. It happened in 2010, 2011, and in 2016. In each of those years, the amount of deflation was minimal at most.