5 Changes Coming to Social Security in 2023
As we approach the beginning of a new calendar year, the Social Security Administration (SSA) is about to implement several changes in their system of benefit payments. Most of them relate to the biggest “cost-of-living adjustment” or “COLA” in many years because of inflation.
Basic Benefit Rates Will Increase by 8.7% COLA
First and foremost, benefit payments to those who receive Social Security Disability and Retirement benefits will rise 8.7%, the biggest single-year increase since 1981. In practical terms, this means that the average person receiving disability benefits will see an increase from about $1,400 to about $1,520 per month, a gain of about $120/month. If you have already qualified for a higher monthly benefit than average, your increase will be proportionally higher. The new, higher amount will begin with the January 2023 payments.
Bear in mind, these numbers are rough averages, and that many variables could result in a different amount in a particular case. But the important point is that the vast majority of disability and retirement benefit recipients will see a substantial increase in their monthly check because inflation has been running at such a high rate over the past year.
Benefit Rates for SSI Recipients Will Also Rise
Disabled persons who did not work long enough to have paid into the SSA system enough money to qualify for Social Security Disability Income, and who have no or very little income or property, can still qualify for Supplemental Security Income, the program designed to help disabled people of modest means. The monthly benefit they receive is, on average, significantly lower than most SSDI benefits. However, the SSI maximum monthly benefit will rise from $841 to $914 in most states (some states adjust the benefit their residents receive). Married couples and domestic partners will see their joint benefit rise from $1,261 to $1,371/month.
The Amount You Can Earn While Still Receiving Disability Benefits Will Rise
There is a common misperception that a person cannot work at all if they receive disability benefits. The law says that a person can still work part time and make a modest income in addition to receiving disability benefits as long as their medical and mental health conditions prevent them from working at what the SSA calls “substantial gainful activity” level, which is a fancy term for full-time. The general rule for people whose disability is based on problems other than blindness (special rules apply when blindness is your disability) is that you can earn around $1,350 (gross) per month and still qualify for disability benefits. That amount goes up to $1,470/month in 2023, again because of the way the SSA takes inflation into account when calculating benefits.
The Maximum Monthly Benefit Amount Will Also Increase
No matter how much a person pays into the Social Security system during their working lives, there is a limit to how much they can receive in a monthly benefit when they retire (or become disabled) and start to collect. A person who waits until their “full retirement age” — either 66 or 67, depending on their year of birth — will see an increase in their maximum monthly benefit from $3,345 to $3,627 effective January 2023.
High-Income Earners Will Pay More Social Security Tax
For high-income earners there is a limit to the portion of their earnings subject to withholding for Social Security taxes. That limit will increase from $147,000 in 2022 to $160,200 in 2023. In other words, even if you earn $1 million in 2023, only the first $160,200 of it is subject to the Social Security withholding tax.
The Social Security Administration is constantly adapting to changing inflation and income levels, and these changes can affect the benefits you might eventually receive.
Do You Need to Appeal a Disability Denial?
Riddle & Brantley is ready to help. Our team has helped hundreds of North Carolinians get the disability benefits they need and deserve. Call 1-800-525-7111 for a free, no-obligation case review and let’s see how we can help.