Social Security’s “cost-of-living adjustment” (COLA) for 2023 changes
Posted December 20, 2022 by Premier Disability Services, LLC®Social Security’s “cost-of-living adjustment” (COLA) for 2023 increases disability payments for SSDI and SSI recipients by 8.7%, the largest increase since the early 1980s. This means that the average monthly SSDI payment for 2023 will increase by $119 and the maximum SSI benefit will go up by $73.
SSDI Changes for 2023
Monthly benefit amount. Social Security disability insurance (SSDI) payments have increased by 8.7% for 2023. Social Security expects the average monthly SSDI benefit to be $1,483 in 2023, but the most anyone can receive will be $3,627 per month (there is no minimum amount).
Benefit amounts for dependents. Benefit amounts for the spouses and children of disabled workers have also increased by 8.7%. The average amount received by a married disability recipient with one or more children in 2023 will be $2,616.
SSDI limits on income. Social Security won’t consider you for SSDI benefits if you’re making more than $1,470 per month from working (up from $1,350 in 2022). But if you’re legally blind, you can make up to $2,460 per month. These are the “substantial gainful activity” (SGA) limits.
SSDI limits on “unearned income.” The SSDI program has no limits on income like gifts, interest income, or unemployment benefits. SSDI recipients aren’t subject to an asset limit either. That’s because SSDI is an insurance program that people pay into out of every paycheck.
Number of work credits. To be “insured” (eligible) for SSDI, you must have paid into the system for a number of years, either by paying FICA taxes in a job covered by Social Security or by paying self-employment taxes. Social Security keeps track of how much you’ve worked by giving you credits for each calendar quarter you worked. The number of work credits you need varies for people of different ages, but to give you some examples, a 50-year-old needs 28 credits (7 years) and a 60-year-old needs 38 credits (9.5 years) to qualify for SSDI.
Income per credit. The amount of income needed to earn a credit for a calendar quarter of Social Security coverage has increased in 2023, to $1,640, but you can only earn four credits per year.
SSI Changes for 2023
Federal monthly payment. The new federal payment for disabled SSI recipients is $914 per month. For married couples who live together and who both receive SSI, the monthly payment is $1,371. You’ll receive less if you receive free room or board from friends or relatives, or if you make any income.
State supplementary payments. Many states add on a small state supplement to the federal amount, at least for some SSI recipients. Some states have increased the supplement amounts for 2023, but many have not.
SSI initial income limit. When you apply for SSI, you can’t be making more than $1,470 per month from working. If you’re legally blind, you can’t be making more than $2,460 per month. These are the substantial gainful activity limits.
After you’ve started receiving SSI benefits, you’re no longer prevented from making above $1,470 (or $2,460 for those who are blind or have low vision). But a different income limit does apply (it’s about $1,900 per month).
SSI income limit after approval. The SSI income limit applies after you’ve started receiving benefits. Any income you have (earned income like wages or unearned income like gifts) over $914 will reduce your benefit. But Social Security doesn’t count over half of the income you receive from work. In 2023, for example, if you make $915 per month and you live on your own, your federal SSI benefit would be reduced to $500 per month. The more you make, the lower your SSI benefit will be.
Student income exclusion. For students who receive SSI, Social Security will ignore $2,220 of income per month, up to an annual limit of $8,950.
SSI asset limit. The resource limits for SSI haven’t changed for many years: $2,000 for an individual and $3,000 for a couple.
