2023 Social Security COLA
The 2023 Social Security COLA is 8.7%.
Effective 2023-01-01Source: Cost-of-Living Increase and Other Determinations for 2023 (SSA)Verified 2026-09-01
Compared with 2022
| Item | 2022 | 2023 | Change |
|---|---|---|---|
| Cost-of-living increase | 5.9% | 8.7% | +2.8% (+47.5%) |
Who it applies to
The increase applies to people receiving Social Security retirement, survivors or disability benefits under title II of the Social Security Act, and to people receiving Supplemental Security Income under title XVI. Both rise by 8.7 percent. A title II benefit reflects the increase from the December 2022 benefit, which is payable in January 2023; an SSI payment reflects it from the payment made for January 2023. It is a single rate rather than a per-person calculation, so every benefit it applies to rises by the same 8.7 percent and what differs between people is the amount the rate is applied to. The same notice settles other program amounts for 2023 as well, among them the contribution and benefit base, the retirement earnings test exempt amounts and the substantial gainful activity amounts; this page states the cost-of-living increase only, and each of those is a separate figure with its own sentence in the notice.
What changed this year, and why
The Social Security Administration determined a cost-of-living increase of 8.7 percent for 2023. Its notice states the increase as 8.7 percent for benefits under title II of the Social Security Act and for payments under title XVI, so retirement, survivors and disability benefits and Supplemental Security Income payments all rise by the same 8.7 percent. Under title II the increase reaches individuals eligible for December 2022 benefits, which are payable in January 2023. SSI payments increase by 8.7 percent effective for payments made for January 2023. The increase for 2022 was 5.9 percent; each year's figure is determined on its own and stated in its own notice.
Common questions
- What is the 2023 Social Security COLA?
- It is 8.7 percent. SSA's notice for 2023 states that the cost-of-living increase is 8.7 percent for benefits under title II of the Social Security Act and for payments under title XVI.
- When does the 2023 COLA take effect?
- Under title II it is effective for individuals eligible for December 2022 benefits, which are payable in January 2023. That is why an increase settled in the autumn of 2022 is the increase people see in their 2023 payments.
- Does the 2023 COLA apply to Supplemental Security Income?
- Yes. Federal SSI payments also increase by 8.7 percent, effective for payments made for January 2023. The notice states the same increase for title XVI payments as for title II benefits.
- Who settles the COLA, and where is it published?
- The Social Security Administration does, and it publishes the determination as a notice in the Federal Register titled "Cost-of-Living Increase and Other Determinations for 2023". That notice is the document this page cites, and it is where 8.7 percent is stated in a sentence.
- How is the cost-of-living increase worked out?
- From the Consumer Price Index for Urban Wage Earners and Clerical Workers, which the Bureau of Labor Statistics produces. SSA compares that index for the calendar quarter ending in September with the same quarter of the most recent year in which an increase was determined, and rounds the result. For 2023 that computation gave 8.7 percent.
- Does every beneficiary get the same increase?
- The rate is the same for everyone it applies to: the notice states a single increase of 8.7 percent for benefits under title II and payments under title XVI. What differs between people is the benefit the rate is applied to, not the rate itself.
- What else does the same notice decide?
- The notice that carries the 8.7 percent increase also settles other amounts for 2023, including the contribution and benefit base, the retirement earnings test exempt amounts, the substantial gainful activity amounts and the SSI student earned income exclusion. Each of those is a separate figure with its own sentence in the notice, and this page publishes the cost-of-living increase only.
- How does the 2023 COLA compare with the year before?
- The increase for 2023 is 8.7 percent. The increase for 2022 was 5.9 percent. Each year's figure is settled on its own and stated in its own notice, so an increase in a given year does not carry into the next.
How the increase is computed, and when there is none
The Social Security COLA is computed by comparing the Consumer Price Index (CPI) from the third quarter of the current year to the third quarter of the prior computation. The law states that a cost-of-living increase for benefits is determined based on the percentage increase, if any, in the CPI from the last computation quarter to the third quarter of the current year. When the CPI has not risen from one third quarter to the next, there is no COLA and benefits stay the same. For 2023, the percentage increase was 8.7%. When an increase does exist, it is rounded to the nearest tenth of a percent and applied to benefits beginning with December of the announcement year. The CPI values used are those published by the Bureau of Labor Statistics, and the comparison is always between consecutive third quarters - July, August, and September - of the two relevant years.
The law states that a cost-of-living increase for benefits is determined based on the percentage increase, if any, in the CPI from the last computation quarter to the third quarter of the current year.
Cost-of-Living Increase and Other Determinations for 2023 (SSA)
Only three months of the CPI decide it
The increase is not measured over a year of prices. The Act defines a cost-of-living computation quarter as three months, and the index for that quarter is one number: the arithmetic mean of the index for the 3 months in it. That mean is rounded to the nearest 0.001 before any comparison is made, and the comparison is then between two such means a year apart. Two things follow for anyone reading the 8.7% on this page against inflation reported elsewhere. Prices in the other nine months of the year never enter the calculation directly; they matter only insofar as they are still showing in the third quarter when it comes round. And a sharp move late in the year does not raise the increase announced for 2023. It falls inside the following year's quarter, so it is carried into the next announcement instead.
Section 215(i)(1) of the Act states that the CPI for a cost-of- living computation quarter is the arithmetic mean of this index for the 3 months in that quarter. In accordance with 20 CFR 404.275, we round the arithmetic mean, if necessary, to the nearest 0.001.
Cost-of-Living Increase and Other Determinations for 2023 (SSA)
It starts with December benefits, paid in January
Although the 8.7 percent cost-of-living increase for 2023 is announced in October 2022, beneficiaries do not see the higher amount in their December 2022 check. Instead, the increase is effective beginning with benefits for December 2022, which are payable in January 2023. This timing reflects the way Social Security benefits are paid: a given month's benefit is always paid in the following month. So the first payment reflecting the 8.7 percent increase is the one that arrives in January 2023, covering December 2022. For those first eligible after 2022, the 8.7 percent increase does not apply; their benefits are calculated under the current-year rules without a COLA adjustment.
In accordance with section 215(i) of the Act, for workers and family members for whom eligibility for benefits (that is, the worker's attainment of age 62, or disability or death before age 62) occurred before 2023, benefits will increase by 8.7 percent beginning with benefits for December 2022, which are payable in January 2023.
Cost-of-Living Increase and Other Determinations for 2023 (SSA)
Working before full retirement age withholds part of the benefit
If you work and receive Social Security benefits before reaching full retirement age (NRA), the Retirement Earnings Test may withhold part of your benefit. For beneficiaries who attain full retirement age in the year, the rule is more favorable: SSA withholds $1 in benefits for every $3 of earnings over the annual exempt amount, but only for earnings in months before the month of NRA attainment. For all other beneficiaries under full retirement age, the withholding is steeper: $1 in benefits is withheld for every $2 of earnings over the lower annual exempt amount. These exempt amounts are adjusted annually. Once you reach full retirement age, there is no withholding regardless of how much you earn.
For beneficiaries who attain NRA in the year, we withhold $1 in benefits for every $3 of earnings over the annual exempt amount for months before NRA. For all other beneficiaries under NRA, we withhold $1 in benefits for every $2 of earnings over the annual exempt amount.
Cost-of-Living Increase and Other Determinations for 2023 (SSA)
The year you reach full retirement age has its own limit
The Social Security Administration applies different earnings limits depending on whether a beneficiary has reached full retirement age. For people who reach full retirement age during a given year, a higher exempt amount applies, but only for earnings in the months before they attain that age. Once they reach full retirement age, there is no limit on earnings and no benefit withholding. For all other months in which a beneficiary is below full retirement age, a lower exempt amount applies. The higher limit recognizes that beneficiaries transitioning into full retirement age may have already earned substantial income earlier in the year before becoming entitled to unlimited earnings. This rule ensures that the earnings test applies more leniently during the year of reaching full retirement age compared to earlier years when beneficiaries are fully subject to the lower limit.
A higher exempt amount applies in the year in which a person attains NRA, but only for earnings in months before such attainment. A lower exempt amount applies at all other ages below NRA.
Cost-of-Living Increase and Other Determinations for 2023 (SSA)
What earnings count as substantial gainful activity
To qualify for Social Security disability benefits under titles II and XVI of the Act, a person must be unable to engage in substantial gainful activity (SGA), except for certain title XVI children with a determined disability. A person who is earning more than a certain monthly amount is ordinarily considered to be engaging in SGA. The monthly earnings threshold that defines SGA depends on the nature of the person's disability. For statutorily blind individuals under title II, the SGA amount is specified directly in the Act. For non-blind individuals with a determined disability, the SGA amount is set by SSA regulations. The SGA amounts are updated annually in accordance with changes in the national average wage index.
A person who is earning more than a certain monthly amount is ordinarily considered to be engaging in SGA.
Cost-of-Living Increase and Other Determinations for 2023 (SSA)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Cost-of-Living Increase and Other Determinations for 2023 (SSA)
- Cost-of-living increase
The cost-of-living increase is 8.7 percent for monthly benefits under title II and for monthly payments under title XVI of the Act.