How Much Will Social Security Disability Benefits Increase in 2023?

Inflation and its impact on the national economy dominated the news with social media exploding with posts from people struggling to make ends meet as consumer prices climbed. If you are among the millions of people whose ability to work has been affected by an injury or illness, 2023 brings some good news.

The Social Security Administration makes annual adjustments to its benefits programs, including Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), based on changes in the cost of living. Payments in 2023 to beneficiaries receiving Social Security retirement, SSDI, and SSI increased by 8.7% thanks to a bump in the cost-of-living adjustment.

The disability benefits increase in 2023 is not the only change caused by inflation. Here is a look at how much Social Security disability benefits increase in 2023 and information about other changes that will affect SSDI and SSI benefits.

Have There Also Been Disability Cost-Of-Living Adjustments?

The purpose of cost-of-living adjustments is to offset the effects of inflation on people who rely on disability benefits to meet their financial obligations and, particularly for people receiving SSI, pay for food and shelter. At one time, cost-of-living adjustments to Social Security benefits required Congress to pass a law authorizing it, but that changed in 1972 when Congress amended the Social Security Act.

One of the amendments was authorization for automatic annual cost-of-living adjustments to retirement and disability benefits based on the average increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The first automatic increase in benefits occurred under the new law in 1975. The actual adjustment for an upcoming year is based on the third quarter CPI-W from the current year’s third quarter. For example, the 2022 third-quarter CPI-W accounted for the 8.7% cost-of-living allowance that 2023 Social Security beneficiaries received.

Social Security Disability Benefits Increase 2023

The cost-of-living adjustment that went into effect on January 1, 2023, increased the benefits payable to beneficiaries through SSI as follows:

• SSI monthly individual disability benefit went from $841 in 2022 to $914 in 2023.
• SSI monthly couple disability benefits went from $1,261 in 2022 to $1,371 in 2023.
• SSI monthly student exclusion went from $2040 in 2022 to $2,220 in 2023.

The student exclusion lets a blind or disabled child receive SSI benefits to exclude monthly earnings up to the exclusion limit while attending school, including college, vocational, and technical school or training, without affecting their eligibility for benefits. There is a yearly cap on the exclusion of $8,950 in 2023.

Disabled workers eligible to receive SSDI benefits in 2023 also received an increase based on the cost-of-living adjustment. The average SSDI monthly benefit went from $1,364 in 2022 to $1,483 in 2023. The average benefit payable for family benefits to a disabled worker with a spouse and children increased from $2,407 in 2022 to $2,616 in 2023.

The disability benefit you receive through SSDI is calculated using lifetime earnings, so Social Security presents an average monthly benefit payment rather than an actual one as it does with SSI. The SSI federal benefit of $914 per month applies to all beneficiaries unless it is reduced because the person has other countable income.

SSDI has a cap or maximum on how much you may receive each month. It had been $3,345 a month in 2022, but it increased in 2023 to $3,627. The maximum benefit, which Social Security refers to as the “Maximum Social Security Benefit,” is the maximum retirement benefit a worker could receive by waiting to retire at full retirement age instead of opting to take early retirement at age 62.

The maximum SSDI and retirement benefit is tied into Social Security Old-Age, Survivors, and Disability Insurance (OASDI) payroll taxes. There is a limit on the amount of Social Security taxes that you pay each year based on earnings. In 2022, the maximum taxable earnings for Social Security OASDI taxes were $147,000, but they increased in 2023 to $160,200 to conform to the cost-of-living adjustments.

If you look at your paystub or the annual federal income tax return, you’ll notice that Social Security OASDI taxes are reported separately from the taxes taken out for Medicare. The reason is that OASDI taxes fund the Social Security benefit programs, and Medicare taxes are dedicated to funding the medical insurance that retirees and disabled workers receive.

Get Help with SSI And SSDI Benefits

When a disability affects your ability to work and earn a living SSDI and SSI benefits do not automatically come to you. You need to fight for them. Social Security denies disability benefits to more than two-thirds of the applicants applying for them yearly.

A disability lawyer at the Keener Law Firm has the experience, knowledge, and skills to fight to get you the disability benefits that you need and deserve. Contact us today for a free consultation.