Social security retirement benefits and disability benefits, the latter granted based on a medical record review, provide valuable financial support to millions of Americans. In October 2022, the Social Security Administration (SSA) announced the COLA or cost-of-living-adjustment for social security beneficiaries in 2023. Consequent to the rising inflation this year, seniors will receive 8.7% more in 2023. COLA is calculated based on the year-over-year inflation in the third quarter of each year. Currently, this is July to September 2021 vs. July to September 2022. This is the largest increase since the year 1981, and the fourth highest increase ever. As a result of this increase, social security beneficiaries will receive an additional $146 per check. It is expected that around 70 million Americans receiving social security payments and supplemental security income payments will benefit from this increase in 2023.
The cost of living is measured by the Department of Labor’s Consumer Price Index (CPI-W). When the cost of living rises, federal benefit rates also increase. When inflation increases, the CPI-W also rises and it results in a higher cost of living. The prices for goods and services will be higher. COLA adjustment is made to offset these costs.
Beneficiaries will receive this increase in their January 2023 checks because COLA goes into effect with their December 2022 benefits. Typically, the SSA makes the benefit payments on Wednesdays, based on a rollout schedule based on the beneficiary’s birth date. So, a person born from the 1st through the 10th of the month, will receive the benefits on the second Wednesday of the month. For beneficiaries whose birthday falls between the 11th and 20th of the month, the checks are paid on the third Wednesday. For those born between the 21st and the end of the month, the checks are paid on the fourth Wednesday.
The SSA sends out letters through the month of December, explaining their specific benefit rate for the new year. Since the year 1975, SS benefits have been adjusted automatically each year based on the increase in the cost of living.
- The current increase of 8.7% is the largest increase since 1981, when it was 11.2%.
- It was at the time of the deep recession, that COLA saw the maximum increase of 14.3% in 1980.
- There was no COLA increase for the years 2009, 2010, and 2015 because of the lack of inflation following the great recession of 2008.
According to Acting Commissioner of the SSA, Kilolo Kijakazi, seniors will get more peace of mind and breathing room with the Medicare premiums decreasing and social security benefits increasing in 2023. She added that the substantial COLA adjustment for 2023 is the first time in more than ten years that Medicare premiums are not increasing. This shows that the SSA can provide more support to older Americans who depend on the benefits they have earned. Social security COLA notice can be also accessed online in each beneficiary’s my Social Security Account.
As a company providing medical record review for social security disability firms, we are aware of the significance of such social security updates. The SSA points out that 55% of social security recipients in 2021 were women. The vast majority of those Americans are retired; however, approximately 3 million children also receive SS benefits. People with disabilities, and those who have lost their spouses, also receive these payments. It is expected that the average payment for disabled workers will increase from $1,364 to $1,483, and that for a widow with two children will increase from $3,238 to $3,520.
MOS (Managed Outsource Solutions) provides prompt medical record review solutions for social security disability firms and valuable pre-trial documentation preparation. For more details regarding our customized solutions, call 1-800-670-2809.
