The Social Security Administration applies a cost-of-living adjustment (COLA) to benefits each year, including SSDI and SSI payments. This annual adjustment is one of the protections built into the program to help benefits maintain their purchasing power over time as the cost of living changes. The COLA is calculated based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) between the third quarter of one year and the third quarter of the following year.
If prices have risen, benefits increase by a corresponding percentage. The SSA announces the upcoming COLA each October, and the adjustment takes effect with January payments. For SSDI recipients, the COLA applies automatically to your monthly benefit. No action is required — the increase is calculated and applied by the SSA. You’ll receive a notice explaining your new benefit amount.
For SSI recipients, the COLA adjusts the federal benefit rate. In 2025, the maximum federal SSI payment is $967 per month for an individual and $1,450 for a couple. These amounts increase when a COLA is applied. It’s worth understanding that even a meaningful COLA percentage may result in a modest dollar amount depending on your benefit level. A 3% COLA on a $1,200 monthly benefit adds $36 per month.
While helpful, COLA increases are typically modest and are not intended to provide significant growth in benefit value — they are a maintenance adjustment. Tax implications are worth noting as well. For SSDI recipients who also have other income sources, a COLA increase can occasionally push total income closer to or over the threshold at which SSDI becomes partially taxable.
Our team at Grech Law Firm Attorney & Counselor is available to answer questions about your benefits. Contact us anytime.
