What is the cost of living adjustment and how does it impact my Disability (SSDI) payments?
If you receive Social Security Disability Insurance (SSDI) benefits, you may have heard of the term “Cost of Living Adjustment” or COLA. But what exactly does this mean for your payments, and how does it affect you? COLA is an important factor in keeping your benefits aligned with inflation. As prices for things like food, gas, and healthcare go up, your SSDI payments should also increase to help you keep up. So let’s break down what COLA is, and how it affects your SSDI payments.
What is the Cost of Living Adjustment (COLA)?
The Cost of Living Adjustment (COLA) is an annual increase in Social Security benefits that helps ensure your payments keep up with inflation. Inflation refers to the rise in prices for goods and services over time, like food and fuel. When prices go up, the purchasing power of money goes down, meaning you can buy less with the same amount of money.
COLA is determined by the government based on the rate of inflation, and it’s meant to prevent your benefits from losing value as everything else becomes more expensive. It is calculated using data from the Consumer Price Index (CPI), which measures changes in prices. When inflation is high, the COLA is higher, and when inflation is low, the COLA might be smaller.
This adjustment is typically announced each year in October and applies to benefits starting in January. As of October of last year, it was announced that the COLA increase for 2025 is 2.5%. As of right now, your SSDI payments should have increased 2.5%.
How and Why Does COLA Impact My Disability (SSDI) Payments?
For SSDI recipients, COLA ensures that your benefits increase to match the rising cost of living. This means that if inflation rises, you will receive a higher monthly payment to help cover the increasing costs of goods and services.
Example
This year (2025) the COLA increase was 2.5%, meaning if you currently receive $1,000 a month, a 2.5% increase would add $25, making your new monthly payment $1,025. This extra money will automatically apply starting the year, so there is no need for you to do anything about it.
As you can see, regular COLA increases help maintain the value of your SSDI payments over time. Without COLA, your benefits would lose value as prices rise. With COLA, your payments grow, helping you keep up with inflation and plan for future expenses.
It’s also important to remember that COLA is usually applied automatically, so you won’t have to request the increase yourself.
CONCLUSION
The Cost of Living Adjustment (COLA) is a vital part of your SSDI benefits. By adjusting your payments annually, COLA ensures that your benefits remain sufficient to cover your needs. If you have questions about how COLA affects your payments, or if you need help with your SSDI claim, the attorneys at Casa de la Justicia are here to guide you every step of the way with no cost out of pocket to you. So call us now for a free consultation, at 1 800 840 4040.
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