On October 13, 2022, the Social Security Administration (SSA) announced an 8.7 percent benefit increase in 2023, surpassing the 5.9 percent increase in 2022. Beginning in January, more than 65 million beneficiaries will see an increase in benefits by over $140 each month.
Every year, there is an annual cost-of-living adjustment (COLA), which is measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The CPI-W measures the change in prices paid by consumers for goods and services. To calculate the COLA, SSA compares the change in the CPI-W from the third quarter of the previous year to the third quarter of the current year.
Therefore, the 2023 adjustment is the difference between the average CPI-W from July, August and September of 2021 and the average for those months in 2022. Due to inflation, the CPI-W has been high over the past two years and the purpose of the COLA is to help offset increasing costs so individual purchasing power is not diminished.
Supplemental Security Income (SSI) benefits will also increase in 2023. For individuals, the monthly benefit will increase to $914 a month. For couples, the monthly benefit will increase to $1,371 a month. Regarding substantial gainful activity (SGA), the amount for a disabled, non-blind individual in 2023 is $1,470.
In the past, the COLA was offset because of increases in Medicare premiums. However, in 2023, there will be a decrease in the Medicare Part B premium, which covers doctor and hospital outpatient services. Next year’s record high increase, along with reductions in the Part B premium, comes as a relief to many individuals who are struggling with increasing prices.
The increased amount of Social Security benefits will start in January 2023, but SSI payments will increase starting December 30, 2022. In December, SSA will mail notices to retirement, survivors, disability, and SSI beneficiaries regarding their COLA increase.
Beneficiaries also have the option to see their COLA increase online through their “my Social Security account.” This information will be available around early December. If you do not have a “my Social Security account,” you must create one by November 15, 2022 to view the 2023 COLA notice online.
More information about the 2023 cost-of-living adjustment is available in Social Security’s COLA Fact Sheet for 2023.