Staying Fit
Social Security’s annual cost-of-living adjustment (COLA) provides beneficiaries with a hedge against rising prices. That includes all beneficiaries — not just retirees and survivors, but also people who receive disability payments.
So, starting in January, people collecting Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI), the two types of payments Social Security administers for people unable to work due to a serious health condition, will get an 8.7 percent increase in their monthly benefits.
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The COLA tracks changes in consumer prices year to year and is applied to benefit amounts. Other measures that chart national trends in wage growth can also affect eligibility and payments for SSDI and SSI recipients. Here are some of the changes those groups will see in 2023.
SSDI benefit amounts
More than 7.7 million workers were receiving SSDI as of September, representing nearly 12 percent of all Social Security beneficiaries. Like retirement benefits, SSDI is paid out of payroll tax revenue that flows into Social Security’s trust funds, and eligibility and benefit amounts are determined by a worker’s earnings record.
According to the Social Security Administration (SSA), the 2023 COLA will increase the average monthly SSDI benefit for a disabled worker by $119, from $1,364 to $1,483.
About 1.25 million family members also receive SSDI on the earnings record of a disabled spouse, former spouse or parent. The average collective benefit for a disabled worker with a spouse and child (or children) receiving benefits on their record will increase in January from $2,407 a month to $2,616.
SSDI income limits
Because disability benefits are contingent on a person being largely unable to work, Social Security sets an income ceiling for SSDI recipients. Beneficiaries who exceed this cap on what the SSA calls “substantial gainful activity” (SGA) will, in most cases, lose their SSDI eligibility.
The SGA cap is adjusted annually based on the National Average Wage Index, an SSA measure of historical trends in U.S. wages. In 2023, most SSDI recipients can earn up to $1,470 a month from work without risk to their benefits, up from $1,350 the previous year. The cap is higher for beneficiaries who are blind: They can make up to $2,460 a month, a $200 increase from 2022.
Social Security offers several work incentives aimed at helping people with disabilities explore options for going back to work. One of these is a trial work period: An SSDI recipient can work, and earn any amount of income, for any nine months over a rolling five-year period without losing benefits. In 2022, the SSA counts a month toward your trial work period quota if you earned at least $970; next year, that goes up to $1,050.
