The Social Security Administration (SSA) has announced that monthly benefit checks will increase 2.5% in 2025 as part of its annual cost-of-living adjustment (COLA). Increased SSI payments will begin on December 31, 2024.
SSA has also highlighted in recent weeks the work it is doing to reduce its notoriously long disability claim processing times. The average time to receive an initial decision on a claim has more than doubled since the late 2010s and is now 230 days. The SSA commissioner says that 30,000 disability applicants died last year while waiting for benefit decisions.
Lower SSA COLA 2025 Reflects Cooling Inflation
The news on SSA COLA for 2025 is likely to be greeted with mixed reactions.
Annual Social Security benefit increases are pegged to year-over-year changes in the cost of living, as measured by the Department of Labor’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a subset of the overall Consumer Price Index that follows price trends for more than 200 common household goods such as food, beverages, housing, and transportation.
There can be a lag in how COLA affects purchasing power because it is based on the prior year’s price trends. This year’s adjustment represents the average CPI-W for July, August, and September 2024 compared to the average for those three months in 2023. The Federal Reserve projects that the main Consumer Price Index will remain steady at 2.4% in the first half of 2025, according to AARP.
“Social Security benefits and SSI payments will increase in 2025, helping tens of millions of people keep up with expenses even as inflation has started to cool.”
Next year’s 2.5% COLA is the lowest since 2021, reflecting a continued inflation cooldown since the COVID-19 spike in consumer prices.
However, next year’s benefit bump builds on a 5.9% increase in payments in 2022, 8.7% in 2023 and 3.2% in 2024 and is in line with an average COLA of about 2.6% over the last decade.
“Social Security benefits and SSI payments will increase in 2025, helping tens of millions of people keep up with expenses even as inflation has started to cool,” said Social Security Commissioner Martin O’Malley.
- On average, the 2.5% COLA for 2025 will bring up the average monthly SSDI payment from $1,542 to $1,580 per month.
- SSA will pay a maximum of $967 per month to individual SSI recipients, up from $943 this year, and a maximum of $1,450 to couples, up from $1,415.
Actual benefit amounts can vary for individual recipients. SSA will send COLA notices in December notifying recipients of their new benefit amount. COLA notices will also be available online to beneficiaries who have a my Social Security account. Recipients will need to create an account by November 20th to view their COLA notice online.
Starting this year, SSA is using a newly designed COLA notice that the agency says is more user-friendly, providing exact dates and dollar amounts of a recipient’s new benefit payment and any deductions. You can learn more about the new form here.
If you still receive disability payments by paper check, and wish to receive electronic payments, you can request the change at www.godirect.gov.
How SSA Is Working to Improve Disability Program Delays
Social Security’s SSDI and SSI programs help to meet the basic living expenses of millions of Americans who have a medical condition that prevents them from earning substantial income. But qualifying for disability benefits requires extensive medical documentation and often involves wait times of up to a year or more.
- The average time to receive an initial decision on a disability claim today is 229 days.
- The current average wait time for a disability reconsideration decision is 244 days.
- The average wait time for a decision at the hearing level is now 307 days.
Add these figures up, and it can take, on average, 780 months—or more than two years—for a disability applicant to work their way through the three levels.
In 2022, only about one-third of Social Security disability claims were initially approved. Around 13% were approved at the first appeal stage (reconsideration).
The highest approval rate by far comes at a court hearing in front of an administrative judge, where about 54% of claims were approved in 2022. But some applicants don’t make it that far. Social Security Commissioner Martin O’Malley told AARP that 30,000 people died in 2023 while awaiting a decision on their disability applications.
Ohio fairs somewhat better than the national average on disability hearing wait times. For September 2024, average wait times were 7 months in Akron and Cincinnati; 6 months in Cleveland; 7.5 months in Columbus; and 10 months in Dayton. These numbers have come down substantially since Graham Law wrote about them in 2019.
On the SSA blog, O’Malley outlined steps the agency is taking to reduce long disability wait times. They include hiring more medical consultants to help with case reviews, using technology to speed up the review process, and prioritizing applicants with the most severe disabilities.
“We’ve brought together agency’s top executive team every two weeks to deeply explore all available policies and tools that could stretch existing resources and address disability processing times within legal and regulatory constraints.”
Social Security blames the breakdowns in customer service on chronic underfunding and understaffing. Benefit payments and COLA increases are codified in federal law, but operational spending at SSA is subject to annual budget allocations. SSA’s budget has decreased by an inflation-adjusted 19% since 2010 even though the number of beneficiaries it serves has risen by 25% over the same period.
The need for more funding and staffing at SSA was the subject of a recent Last Week Tonight with John Oliver segment. O’Malley responded to the segment on Twitter/X, writing, “John—I couldn’t agree more that we must step up to the plate and deliver better for people.” The full show segment is available on YouTube.
Lowering wait times is part of a broader SSA effort to improve the disability program. Other steps include three rule changes rolled out in September 2024 that should help more people qualify for payments and increase monthly payments for some current recipients.
Discuss Your SSDI/SSI Questions With a Disability Lawyer at Graham Law
Graham Law has deep roots in Southeast Ohio and we’re dedicated to helping our community members secure disability benefits, from filing an initial claim to appeals at the reconsideration and hearing levels.
There are several ways we can help you avoid waiting years to get a final decision on your application, such as obtaining a “critical” designation and requesting an on-the-record decision or attorney advisor opinion prior to a disability hearing. We can also assist with navigating issues related to COLA, such as appealing a benefit discrepancy, advising on income and resource limits to avoid disqualification or reduction in benefits, and managing overpayment issues.
Schedule your free consultation or reach out directly to Social Security attorney Joshua Graham.
