SSDI Payment Increase 2025: Projected Changes and Impact

The Social Security payments are anticipated to rise with the 2025 Cost-of-Living adjustments, that is, scheduled to be announced in October 2024. The US citizens who receive Disability benefits through SSDI payments can check the estimated increase in 2025 payments.  

SSDI Payment Increase 2025

The Social Security Administration adjusts the COLA every year to make sure the social security assistance is enough for the recipients with the rising inflation and cost of living. Many Americans rely on Social Security benefits to manage their living costs. 

The Social Security Insurance Disability benefit offers assistance to people with disabilities or serious medical conditions who can’t earn enough due to their incapability to work. The SSDI recipients receive the monthly benefit based on how long they have worked and their earnings during that time as they are paid out of the payroll taxes you paid during your working days. 

The rate of all the social security payments will change in 2025 based on the COLA adjustments and so does the SSDI rates. The inflation rates for the coming year will be lowered to 3.2% in 2025 from 3.8%. Hence the SSA COLA adjustment is expected to lower down from 2024 COLA but it will increase the SSDI payment. 

As per the expert’s analysis, the SSDI payments in 2025 will increase based on the 2.5% to 3% COLA. 

How does COLA affect your SSDI payment increase? 

The SSA adjusts the COLA concerning the consumer price Index for Urban Wage Earners and Clerical Workers allowing them to ensure that Social Security recipients receive enough payment. With the COLA adjustment every year, the administration intends to match the benefits payment with the inflation to provide effective financial relief to the recipients. 

The administration determined the consumer purchasing power to buy goods and services based on the Bureau of Labour Statistics calculated CPI-W and determined the COLA for the year. Hence, the COLA depends on the CPI-W, meaning the COLA increase and decrease depends on the purchasing power of citizens.  

For 2024, the SSA announced the COLA 3.2, increasing the Social Security benefits payments by 3.2%. The SSA announced COLA 2024 on 12 October 2023 based on last year’s third-quartered CPI-W. The administration will generally announce the COLA of the next year in October, so the SSDI recipients can expect the 2025 COLA adjustments in October 2024 and determine their payment increase.   

How is the increase in SSDI Payment Increase 2025 calculated?

The SSA calculates the COLA for the next year based on the CPI-W changes in the third quarter of the current year (July, August, and September) compared to the previous year’s CPI-W changes.  According to the reports, the US inflation is showing a declining trend in the third quarter compared to previous quarters. 

The SSA calculates the COLA for the next year based on the formula where they compare the average CPI-W of July, August, and September of the current year with the average CPI-W of last year’s third quarter. Here’s the COLA calculation for the 2025:

COLA %= Average CPI-W third quarter the 2024   – Average CPI-W of the 2023 third quarterAverage CPI-W of the 2023 third quarter x 100

The COLA approves when the CPI-W of the current year is increased by more than 0.1% if there is no decrease in the increase will be rounded to zero, which leads to no COLA for the year, keeping the Social Security payments the same as the previous year.

The COLA % increase will be applicable to your current SSDI payments and raise the payout amount for the recipients.

Impact of SSDI Payment Increase 2025

The increase in 2025 SSA COLA will increase the social security payments by $50 if the prediction is correct. The SSDI recipients can also expect a hike in payments by $38.50 based on the COLA 2.5% increase. 

The projected SSDI payment will boost the purchasing power of the disabled people who can’t work and earn enough for their livelihood. The recipients who are eligible for Supplemental Security Income up to $943 and SSDI payments at the same time, can expect a high raise in their 2025 payments based on the 2025 increase. 

So, the SSDI recipients can expect the monthly SSDI payment up to $1900 which is considerably lower than the previous Social Security benefits increase. However, the SSDI payments depend on many factors that would vary the payment from person to person, such as:

  • At the age you get disabled 
  • Your number of working years and how long you have contributed to the social security through payroll taxes
  • During your working years, you average monthly earnings.

The recipients should remember your current income and assets resources do not affect their SSDI payments just as SSI payments.

When will the COLA 2025 increase be effective on SSDI payments?

As we have mentioned before, the SSA will announce the 2025 COLA in October 2024. The increase in Social Security payments based on the COLA will be effective from 1 December 2024. The SSDI recipients can expect an increase in their payments (if the COLA increases the payments) from their January 2025 payments. 

The social security recipients will know whether the COLA will increase their payment in October 2024 as the September 2024 CPI-W will be announced by the BLS and the SSA will calculate the COLA based on the 2024 third quarter CPI-W average. 

The SSDI social security benefits are the source of inflation-protected income for millions of Americans who are suffering from disability. The 2025 COLA may increase the SSDI payout, so recipients should keep an eye on the October 2024 announcement.