The Social Security Administration makes changes to its disability benefits programs, Social Security Disability Insurance and Supplemental Security Income (SSI), to account for changes in the economy and other factors. As such, beneficiaries may wonder what some of the recent changes in Social Security Disability Insurance (SSDI) are.
The SSDI Cost-of-Living Adjustment for 2023 was 8.7%, which has been the biggest increase in four decades. Furthermore, SSDI beneficiaries are also expected to receive a higher average benefits payout in 2023.
Read below as we talk about more recent changes in SSDI benefits for 2023.
COLA Increase
In 2023, around 70 million people who receive Social Security benefits will see the highest Cost-of-Living Adjustment (COLA) increase to their monthly benefits in over 40 years.
The increase is contingent on the U.S. Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) and ensures that benefits stay up with the rising inflation.
If there is a year-over-year increase in the CPI-W of over 0.1 percent between the third quarter of the previous year and the third quarter of the present year, then the Social Security Administration (SSA) will increase their benefit payouts by the same amount.
The 8.7 percent increase in 2023 was considerably more than the average annual raise for the past several decades. Prior to this, the 5.9% rise in 2022 was the highest increase in benefits since the 7.4% increase in 1982.
Higher Payout
The Social Security Disability Insurance program works like earned insurance; beneficiaries pay for it through Social Security taxes on their covered earnings.
Individuals who are no longer able to work as a result of their condition are eligible to receive financial assistance from the program in the form of income, which can help replace a portion of the wages they have lost.
Social Security Disability payments typically increase by a small amount each year. However, in 2023, workers with disabilities are likely to receive an average of $1,483 in benefits on a monthly basis, up from $1,364 in 2022.
The average payment for disabled workers with a spouse and dependent children also likely went up to $2,616 in 2023, an increase of $209.
Higher SGA Limits
The Substantial Gainful Activity (SGA) limit is the maximum amount of money an individual can earn while still being eligible for Supplemental Security Income and SSDI.
In 2023, the monthly pre-tax income limit for those receiving disability payments increased to $1,470, up from $1,350 in the previous year. The monthly SGA limit for blind individuals increased to $2,460. This income limit applies to both existing beneficiaries and new applicants to SSDI.
As a result of the increased threshold, a greater number of people may qualify for benefits in 2023 than in 2022. It also means that people currently receiving benefits can earn a little more money without having their benefits reduced.
It’s important to remember that if your income is even slightly above the threshold, you may not get approved for or be able to keep your disability benefits. Unfortunately, the income limit stays the same for Supplemental Security Income, regardless of the increase in SGA limits.
Benefit Base
Everyone who has worked for a company in the United States knows that a portion of their income should be withheld to pay Social Security taxes.
Maximum taxable earnings, often known as the benefit base, are the highest amount of income subject to Social Security taxation. This maximum increased from $147,000 in 2022 to the new amount of $160,200 in 2023.
Increase in Spousal Benefits
In 2023, there was also an increase in the average SSDI benefits payout, and this increase applied to all types of benefits, including those for disabled individuals or their spouses. Here is a breakdown of those numbers:
- According to the SSA, a widowed mother with two children should expect a substantial increase in monthly benefits, from $3,238 to $3,520.
- The monthly benefits for elderly widows and widowers who live alone would go up from $1,567 to $1,704.
- A disabled worker who is also supporting a spouse and/or child(ren) will see an increase in benefits from $2,407 per month to $2,616.
Do note that these numbers are only averages, and the specifics of your case may result in a different amount.
New Website
The Social Security Administration introduced a newly redesigned website for the year 2023. The redesigned SSA website is now much simpler to use. Disability appeals and application status checks are now much more streamlined. These changes, however, will not have any bearing on your payments or the application process.
Those who are already receiving Social Security disability benefits can easily modify their direct deposit and various other payment information on the updated website. It also makes it easier to navigate.
Lower Medicare Premiums
Although Social Security and Medicare are two separate programs, the majority of beneficiaries are enrolled in both.
The 2023 changes to the Medicare healthcare system were especially noteworthy.
Medicare Part B rates went down from $170.10 per month in 2022 to $164.90 per month in 2023. According to data from the Centers for Medicare & Medicaid Services (CMS), the number of Medicare recipients was close to 64 million as of October 2021.
Income Threshold for Withholding Benefits
If you start receiving Social Security benefits before you reach Full Retirement Age (FRA), the Social Security Administration will deduct $1 for every $2 in earnings that are over a certain limit. In 2023, the threshold increased to $21,240 from its previous level of $19,560; therefore, you will be able to keep an additional $840 every year.
If $21,240 still seems like it’s not enough for you, know that the SSA modifies the formula for those who will achieve FRA this year (2023). Furthermore, the Social Security Administration only keeps $1 of every $3 earned over that threshold.
When you reach your full retirement age, any benefits that were withheld owing to the income limits mentioned above will be paid back to you in the form of larger monthly benefit payments.
In conclusion, there are many substantial changes in SSDI benefits that have been made in 2023. You should also be aware that every year, changes and updates are announced on the SSA’s website.
