Social Security Disability beneficiaries will likely be seeing an increase in their payments next year which may be the largest in decades. This is due to growing inflation and the continuously climbing cost-of-living in the United States, which informs the automatic cost-of-living adjustment, or COLA.
The COLA is based on how any increase in the Consumer Price Index – calculated by the U.S. Department of Labor’s Bureau of Labor Statistics – during the third quarter of the year compares to the same period in the previous year. This is intended to ensure that disability benefits keep up with inflation and the increased cost-of-living in the U.S.
According to a report from the Senior Citizen’s League, the cost-of-living adjustment could increase by about 8.6%, which would be the highest COLA increase since 1981. For reference, this year’s COLA increase was 5.9% – the highest automatic increase since 1982. The COLA has grown by an average of 1.88% annually over the past decade.
The Social Security Administration (SSA) will officially announce the 2023 COLA increase this October.