Social Security Disability Increase (With 2021 Updates)
- The 2020 Social Security disability increase is set at 1.3% to reflect the rise in living costs. Here's what this means for your disability benefits in 2021.
Understanding the 2020 Social Security Disability Increase (With 2021 Updates)
If you receive Social Security disability benefits, you can expect a slight boost in the amount of your monthly check in 2021 due to inflation. The federal government adjusts benefits annually to reflect cost of living and has set the 2020 Social Security disability increase at 1.3%. This change affects an estimated 10 million disabled workers and dependents receiving disability benefits.
Here's a look at how the increase is calculated and what the average beneficiary can expect to earn on Social Security disability in 2021.
How Is the 2020 Social Security Disability Increase Determined?
Every fall, the Social Security Administration (SSA) looks at how much the cost is for workers for basic necessities like food and shelter. The SSA uses the Consumer Price Index (CPI-W) established by the Department of Labor, which is determined from the third quarter of one year to the third quarter of the next year.
An increase in the CPI-W from the previous year indicates that goods and services are more expensive, and a cost-of-living adjustment (COLA) is made to Social Security benefits to ensure there's no reduction in your purchasing power. If the CPI-W doesn't go up, there's no Social Security disability increase.
Social Security is required to consider annual cost-of-living adjustments because of legislation that took effect in 1975. Before this, benefits only increased when enacted by Congress.
When Does the Annual Cost-of-Living Adjustment Take Effect?
The SSA announces any cost-of-living adjustment in October of each year for the following year. It's automatically reflected in your check, so there's no need to apply for the increase if you're already receiving benefits.
The 2020 Social Security disability increase of 1.3% takes effect in December 2020. You should see the raise reflected in your payments beginning January 2021.
How Much Will My Disability Check Increase?
According to Social Security, the 1.3% COLA adjustment is expected to increase average monthly disability benefits as follows:
- The average payment for a disabled worker is expected to rise $16 to $1,277 from $1,261 per month
- The average payment for a disabled worker, spouse and children is expected to rise $29 to $2,226 from $2,197 per month
Keep in mind that these estimated monthly payments are based on averages. All beneficiaries are notified of the exact amount of their 2020 Social Security disability increase. This information is usually mailed out on paper, but you can also log into your online Social Security account starting in early December to see how the cost-of-living adjustment impacts your specific situation in 2021.