What to Expect From the Social Security Cost-of-Living Adjustment in 2023
When you’re trying to make Social Security benefits stretch, every little bit counts, especially in years like 2022 with record-high inflation and rising prices. Fortunately, a bit of relief is coming from the Social Security Administration (SSA) with the highest Cost-of-Living Adjustment (COLA) in more than 40 years – an 8.7% increase.
Every year the SSA decides what adjustments need to be made to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation. This year's 8.7% adjustment follows another significant increase in 2022 of 5.9% and also comes in a year where some Medicare premiums are decreasing.
According to the SSA, approximately 70 million Americans who receive these benefits will be able to take advantage of these raises.
KEY PAYMENT ADJUSTMENTS
Several adjustments will go into effect as a result of the COLA increase; here are some specific numbers that may be relevant.
- New Federal SSI payment standard is $914/month for an individual and $1,371/month for a couple.
- New Social Security Disability Insurance (SSDI) thresholds: $1,470/month (non-blind), $2,460/month (blind), and $1,050/month (Trial Work Period).
- Estimated average monthly Social Security retirement payment for individuals is $1,827 per month.
- Annual gift exclusion limit for 2023 is $17,000 and the same limit applies to annual ABLE Account contributions.
For more details about the 2023 COLA changes, refer to the official fact sheet from the Social Security Administration.
In regards to Medicaid, the Spousal Impoverishment Figures will see their own changes for this new year:
- The new minimum Community Spouse Resource Allowance (CSRA) is $29,724 and the maximum is $148,620.
- The maximum monthly maintenance needs allowance is $3,715.
- The minimum monthly maintenance needs allowance is $2,288.75 ($2,861.25 for Alaska and $2,632.50 for Hawaii) until July 1, 2022.
Another piece of good news is that premiums and deductibles for Medicare Part B are decreasing in 2023 (though recipients of Medicare Part A will see some increases). Here are some notable changes:
- Part B premium: $164.90 (decrease from $170.10)
- Part B deductible: $226 (decrease from $233)
- Part A deductible: $1,600 (increase from $1,556)
- Co-payment for hospital stay days 61-90: $400/day (increase from $389)
- Co-payment for hospital stay days 91 and beyond:$800/day (increase from $778)
- Skilled nursing facility co-payment days 21-100: $200/day (increase from $194.50)
Note that these numbers are for low-income beneficiaries; you can find more details about Medicare changes on the Centers for Medicare & Medicaid Services website.