How COLA Influences Your Monthly SSD Payments

Disability Benefits

The cost of living tends to increase every year, and many people thinking about applying for Social Security disability (SSD) benefits wonder if their payments will reflect this. Payment amounts that may be adequate one year may not be enough to live on the next, so does the Social Security Administration (SSA) make a cost-of-living adjustment (COLA) every year?

In short, yes. However, there are numerous stipulations.

How COLA Impacts Monthly SSDI Payments

According to the SSA FAQs, the administration increases beneficiaries’ payment amounts on an annual basis to protect against inflation. If there is a rise in the consumer price index, beneficiaries will see a COLA to their payments. The amount varies depending on the increase. The SSA gives the example that a yearly rise between third quarter 2017 and 2018 resulted in a COLA boost of 2.8% for 2019. Every October, the SSA usually announces the next year’s COLA increase.

The SSA recently published a full list of COLAs for various programs. The SSDI income threshold for nonblind beneficiaries is $1,310 a month in 2021, while it was $1,260/month previously. Blind beneficiaries have a higher threshold, with $2,190/month this year compared to $2,110 in 2020. The average monthly SSD benefits for disabled workers before the 2021 COLA of 1.3% was $1,258. In 2021, that increased to an average of $1,543/month in SSD benefits.

What Happens In Years Without a COLA Increase?

When there’s no increase from year to year, the SSA says there can be no COLA boost for beneficiaries. The SSA says some beneficiaries also enrolled in Medicare may see lower monthly payments, despite a COLA increase. According to the SSA, this only occurs when health care costs rise faster than the cost of living. As a result, higher Medicare premiums makes monthly Social Security payments appear smaller. These benefits aren’t actually growing smaller, but your take-home payments appear that way after Medicare deductions.

COLA may make its way into the spotlight as government officials continue to talk about cutting Social Security because of declining funds. While COLA increases are essential to SSDI and other Social Security beneficiaries, the way such increases are calculated with a “chained” CPI is on its way out.

According to AARP, chained CPI often causes COLA to be lower because it uses a different formula. This formula assumes people will buy less expensive options when prices increase, meaning people often make do with fewer goods when costs rise rather than needing more money to live the same lifestyle. If COLA is calculated using a chained CPI, beneficiaries may see less of an increase in payments than they would have.

Thinking about applying for Social Security disability? Those who qualify for legal assistance through this website typically get $10,000 in lump-sum backpay plus monthly benefits. The SSA’s also 2x more likely to approve your disability claim the first time you apply. Those who apply without legal assistance usually can’t win benefits without pleading their case before an appeals court judge. Those who apply without help from a disability advocate usually wait 2.5 years for their first SSD payment.

Your first step towards legal assistance is signing up for a free phone call from a local Social Security attorney. During this call, you’ll get confidential claim advice that applies to your specific case. This phone call doesn’t obligate you to do anything else, but it does help determine if you’ll qualify for benefits.

Ready to see if you may qualify? Click the button below to start your free benefits evaluation now.

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Lori Polemenakos is Director of Consumer Content and SEO strategist for LeadingResponse, a legal marketing company. An award-winning journalist, writer and editor based in Dallas, Texas, she's produced articles for major brands such as, Yahoo!, MSN, AOL, Xfinity,, and edited several published books. Since 2016, she's published hundreds of articles about Social Security disability, workers' compensation, veterans' benefits, personal injury, mass tort, auto accident claims, bankruptcy, employment law and other related legal issues.