Social Security will be seeing a lot of changes in 2023, many of them tied to the biggest cost-of-living adjustment (COLA) in more than 40 years. The new COLA will impact payments to Social Security beneficiaries, but it’s not the only change you will see in 2023.

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Social Security: Why Not Everyone Will Get An 8.7% COLA Increase in 2023

Following are six changes to the program you can expect in the new year, according to a recently published fact sheet from the Social Security Administration.

New COLA Takes Effect

The big news for 2023 is an 8.7% jump in the Social Security COLA, which is the highest since an 11.2% increase in 1981. The COLA’s steep hike next year is due to this year’s soaring inflation rate, which is also the biggest in 41 years.

The average monthly Social Security payment for all retired workers will rise to an estimated $1,827 in 2023 from $1,681, the SSA said – a gain of $146 a month.

For anyone receiving Social Security benefits, the new payment amount will start in January 2023, according to the SSA. For those receiving Supplemental Security Income (SSI), the new payment amounts will begin on Dec. 30, 2022. Beneficiaries who receive both types will see their payments follow the same schedule, with the SSI increase arriving shortly before the Social Security increase.

One thing to keep in mind: The 2023 COLA of 8.7% won’t apply to all Social Security recipients. Some payment increases will be higher than 8.7% and some will be lower due to a variety of factors, including your primary insurance amount (PIA) and when you sign up for Medicare. Beginning in December, the SSA will start mailing COLA notices to beneficiaries providing details on next year’s payment amounts.

Increase in Social Security Disability Thresholds

The SSA pays monthly benefits to people who are unable to work for a year or more because of a disability, and the benefits usually continue until recipients can work again on a regular basis. However, there are also instances when you might have a qualifying disability even if you’re still working, such as if you can’t do work you previously did because of your medical condition. In this case, you are only eligible up to a certain amount of income. When you pass that threshold, you cannot be considered to have a qualifying disability. Following are the threshold changes for next year, based on average monthly earnings: