This is how much COLA for Social Security could rise in 2023
August 22, 2022
Social Security recipients could see an 8 to 10% increase in their monthly payments next year as a result of a cost of living adjustment, experts say.
In 2022, Social Security and Supplemental Security recipients saw their benefits increase by 5.9%, the largest since 1982, as a result of an annual adjustment in the cost of living based on inflation.
Social Security gives people an income when they retire or are unable to work because of a disability. Those who are retired can typically receive their Social Security benefits as early as age 62.
Over the past few weeks, some have people On social media have claimed that Social Security benefits will rise by as much as 10% by 2023.
Ruby and other VERIFY readers also asked the team whether Social Security recipients will see a bigger than usual increase in their checks next year.
Is the Social Security cost of living adjustment expected to be higher than average for 2023?
Yes, the Social Security cost of living adjustment for 2023 is expected to be higher than average.
Sign up for the VERIFY Fast Facts Daily Newsletter
WHAT WE FOUND
The Social Security Administration (SSA) adjusts benefit amounts each year to account for inflation through a cost of living (COLA) adjustment. The agency will announce the 2023 COLA in October this year, a spokesperson told VERIFY.
The COLA is calculated based on the percent increase in the Consumer Price Index for Urban Wages and Employees (CPI-W), an inflation gauge measured by the U.S. Bureau of Labor Statistics (BLS). It measures the average change over time in the prices employees pay in a “basket of consumer goods and services”.
The SSA explains on its website that COLA is equal to the percentage increase in CPI-W from the previous year’s third quarter average to the same current year average. If there is an increase, it is rounded to the nearest tenth of a percent. That same increase is applied to the monthly Social Security benefits.
More from VERIFY: No, Social Security recipients will not get new $1,400 incentive checks
To determine the COLA for 2023, SSA compares the CPI-W for July, August and September 2021 with the same period in 2022.
In July 2022, the CPI-W increased by 9.1% annually, BLS data shows. No data is available for August or September.
Data from SSA shows that the highest COLA recorded in 1980 was 14.3%. But over the past decade, COLA has averaged just under 2%.
More recently, it has risen from 1.3% in 2021 to 5.9% in 2022. The last time the COLA came close to this percentage increase was in 2009, when it was 5.8%.
While SSA hasn’t announced COLA for 2023, experts estimate that benefits could increase by the largest amount since 1981. The COLA that year was 11.2%.
David Certner, legislative adviser and director of legislative policy for government affairs at AARP, says Social Security recipients can expect a COLA of 8-10% for 2023, although these estimates are preliminary and depend on consumer price data through September.
Mary Johnson, Social Security and Health Care Policy Analyst for the Senior Citizens League, predicts COLA will be 9.6% by 2023. That would average about $160 more per month for retired workers. That number may vary slightly depending on how inflation develops in the coming months, she said.
COLAs for the SSI program, which provides monthly payments to adults and children with disabilities with limited incomes and resources, are generally the same as those for Social Security, although they usually take effect the month after Social Security benefits increase, says SSA on its website.
More from VERIFY: No, Social Security recipients will not receive any bonus payment in September
The VERIFY team works to separate fact from fiction so you can understand what is true and false. Please consider subscribing to our daily newsletter, SMS alerts and our YouTube channel. You can also follow us on Snapchat, Twitter, Instagram, Facebook and TikTok. Learn more “