2025 Changes for Social Security

As 2025 approaches, Social Security disability benefits are set to undergo some changes. Factors like inflation, average wages, and other economic conditions lead to changes in the Social Security program every year to help ensure benefits keep pace with the cost of living. The most welcome change is the cost-of-living adjustment, which will result in increased benefit payments in the new year.

A few other changes, though, like the incoming Trump administration and a new Social Security Administration commissioner, bring uncertainty to the program in 2025. Social Security taxation was a pillar of President-elect Trump’s campaign, with a proposal to eliminate federal income tax on benefits. Social Security’s deficit and fears that funds will deplete by 2035 have also been hot-button topics this year.

In this article, we’ll discuss the changes to expect in January, including the increase in payment amounts, and review some proposed changes for the new year. Rest assured: Major changes to the 89-year-old program take time to implement, and your benefits are secure.

SSI online applications

By late 2025, online applications for Supplemental Security Income (SSI) will be available to all applicants.

In December 2024, the Social Security Administration introduced online SSI applications, marking the first phase of a multi-year effort to simplify the process. Through customer testing, the SSA reduced the application’s 54 questions to 12 for this online version.

Currently, the online application is limited to:

• Applicants applying for both SSI and Social Security Disability Income (SSDI)

• Applicants aged 18 to 64 and 10 months

• Applicants who have never been married

• Applicants who have never applied for SSI for themselves or a child before

• Applicants who are U.S. citizens or qualifying noncitizens

This streamlined application makes applying for both SSI and SSDI more accessible. Previously, applicants could file for SSDI online but had to indicate their intent to apply for SSI separately, often requiring mail or in-person visits to a local SSA office.

2025 COLA increases

First, let’s talk about benefit payments. Thanks to an annual cost-of-living adjustment (COLA), the Social Security Administration (SSA) increases its benefits values each year to keep pace with inflation and the rising cost of living. The size of the increase is determined by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), which measures the cost of everyday goods over time, like groceries, transportation, and housing.

“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 Martin O’Malley, the former Commissioner of Social Security, in a statement.

How much is the 2025 COLA?

The SSA has announced a COLA increase of 2.5% for 2025. While this is a smaller jump compared to 3.2% in 2024 or the record-breaking 8.7% in 2023, it’s close to the 20-year average of 2.6%. Despite this upcoming payment boost, some beneficiaries are dissatisfied with the smaller increase. A study we conducted last fall found that nearly 3 in 5 seniors receiving Social Security face financial struggles, with many seeking work to supplement last year’s 3.2% COLA increase.

How to get the 2025 COLA increase

If you're already receiving Social Security benefits, your new payment amounts will take effect automatically. SSI recipients will begin receiving increased payments on December 31, 2024, and SSDI and retirement beneficiaries will receive updated payments in January 2025.

The SSA will mail notices to recipients with their updated payment amounts in December. You can also view your COLA notice — new and improved this year — by logging into your mySocialSecurity account.

Substantial gainful activity limit for 2025

Substantial Gainful Activity (SGA) refers to the maximum monthly income that disability beneficiaries can earn without losing their benefits. If you receive SSDI or SSI benefits, it's important to be aware of these limits — earning above the SGA threshold could result in the loss of your benefits.

In 2025, the SGA limit for non-blind individuals will be $1,620, up from $1,550 in 2024. For statutorily blind individuals, it’s $2,700, up from $2,590. These higher limits allow you to earn more without risking your benefits.

If you’re approaching the SGA limit, it's a good idea to consult with a disability lawyer to understand how it may affect your eligibility to maintain benefits.

SGA limits

Earnings limit for 2025

The earnings limit is the maximum amount of work-related income that Social Security beneficiaries can receive before their benefits are reduced. The SSA adjusts this limit annually based on the Average Wage Index (AWI), which tracks the growth in the average earnings of U.S. workers across industries and regions each year. Based on the AWI, the earnings limit can slightly increase or decrease each year. Once you reach full retirement age, this earnings limit no longer applies.

Here’s what this earnings cap looks like for workers who are under or approaching full retirement age: For 2025, the earnings limit for workers younger than the full retirement age will increase to $23,400. The SSA deducts $1 from benefits for every $2 earned over $23,400. For those reaching full retirement age in 2025 — 66 years and 10 months — the earnings limit will rise to $62,160. The SSA will deduct $1 from benefits for every $3 earned over $62,160, up until the month you turn full retirement age.

2025 full-retirement age

The current full retirement age is 66 years and 8 months. In November 2025, the full retirement age will increase to 66 years and 10 months. Since 1983, the Social Security Administration has incrementally raised the retirement age by two months based on a person’s birthdate to account for longer life expectancy. You can calculate your retirement age using your birthdate and expected retirement on SSA.gov.

Work credits for 2025

To qualify for Social Security Disability Insurance (SSDI), you must have at least 40 work credits, 20 of which were earned in the 10 years before you became disabled. You earn work credits by working and paying Social Security taxes, whether you’re employed full-time, part-time, or self-employed.

You can earn up to four credits every year, but the SSA adjusts the amount of earnings needed to earn one credit annually to reflect the rise in average earnings across the U.S. In 2025, the amount of earnings to earn one credit is $1,810, up from $1,730 in 2024. To earn four work credits in 2025, you’ll need to earn $7,240.

Rising Medicare costs for 2025

While the COLA increase is intended to help offset rising costs, many disability beneficiaries rely on Medicare, which will see an increase in 2025, making the COLA bump less effective.

Earlier this month, the Centers for Medicare & Medicaid Services (CMS) released the 2025 premiums, deductibles, and coinsurance amounts for Medicare Part A and Part B, as well as the income-related adjustment amounts for Medicare Part D.

Medicare costs depend on an individual’s income level, work history, coverage plan, and medication needs. But here are the overall increases: The standard monthly premium for Medicare Part B enrollees will be $185.00 in 2025, up $10.30 from $174.70 in 2024. The annual deductible for all Medicare Part B beneficiaries will rise to $257 in 2025, an increase of $17 from the $240 deductible in 2024. You can find more information about increases on Medicare.gov.

Tax limit for 2025

Nearly everyone pays taxes on their income to support Social Security, and that isn’t changing in 2025. However, individuals with annual earnings above a certain level don’t pay Social Security taxes on income above that limit. 

In 2025, the taxable income limit will be $176,100, up from $168,600 in 2024. Workers — and their employers — will each pay 6.2% on income up to the limit, while self-employed workers will pay the full 12.4% (with half deductible on tax returns). This means higher-income individuals stop contributing once they exceed the taxable limit. 

Proposals to eliminate this type of Social Security tax would primarily benefit the wealthy while jeopardizing the funding for Social Security benefits that millions of Americans rely on.

2025 SSA commissioner

Martin O’Malley stepped down from his post as Social Security Administration Commissioner on November 29, 2024, to kick off a campaign to lead the Democratic National Convention.

SSA commissioners typically serve a six-year term unless they resign or are removed by the president. In July 2023, President Biden appointed O’Malley to the role. During his nearly two-year tenure, O’Malley made meaningful changes by introducing performance management tools and technology to improve customer service, reduce wait times, and digitize the mailing process, among other things. For example, SSA hotline wait times dropped from 37 to 13 minutes and hearing wait times fell from 13 to 7.8 months in the last year.

President-elect Trump has selected Frank Bisignano, the chairman of the financial technology company Fiserv, as the new commissioner of the SSA. Bisignano must receive Senate approval for the position. In the meantime, Carolyn W. Colvin, who was the SSA commissioner from 2013-2017, is serving as the interim commissioner.

Disability lawyers and advocates hope O’Malley’s efforts will continue in the new year. However, it’s hard to say what the new commissioner will prioritize in the department's day-to-day operations and how that may affect beneficiaries.

What’s the future financial status of Social Security?

A hot topic this year has been the Social Security program's deficit and its projected depletion of funds by 2035. Amid the fear-mongering, it's crucial to note there are separate trust funds for retirement and disability benefits, and the disability trust is fully funded through 2098.

However, in a study we conducted in May, polling 1,000 Americans, we found that 61% are not confident the current government will take effective action to prevent the depletion of Social Security retirement funds.

President-elect Trump has proposed several changes for his next term, and financial experts have raised concerns about how these proposals will affect Social Security. For one, Trump has proposed cutting taxes on overtime and tips and ending Social Security taxation. These cuts would slash a vital funding resource for the program.

President-elect Trump’s central campaign pledge was the mass deportation of undocumented immigrants, with plans in motion to build detention centers along the Texas border. Several economists are raising alarm bells about this plan. To start, undocumented workers pay into Social Security through payroll deductions and voluntary filings — without withdrawing benefits (only citizens and legal residents can receive Social Security benefits).

In 2010, the SSA released data showing that these workers contribute more than $12 billion annually to the Social Security program. What’s more, drastically shrinking the labor force would make an existing problem worse for Social Security: fewer workers would be supporting an increasing number of retirees.

Again, sweeping change in the Social Security program is challenging—you can't turn a big ship quickly—but changes now can impact generations to come.

2025 Woman & Dual Entitlement projection

Here’s an encouraging projection for 2025: According to the SSA, over half of female Social Security beneficiaries aged 60 and older will receive benefits solely based on their own work, and more than one-third will be “dually entitled.” This means women will receive benefits based on both their own work and their spouse’s work credits.

This points to a positive shift in societal norms as more women are working and earning income than ever before. The increase in the number of women qualifying and applying for benefits will continue to rise, perhaps straining the system. However, the boost in women in the workforce also means increased payroll contributions throughout their working years.

Get help with your disability application

If you plan to apply for disability benefits in 2025, Atticus can help. Take our 2-minute quiz to check your eligibility and connect with a knowledgeable team member about your claim. If you'd like, Atticus can introduce you to a lawyer. A disability lawyer can guide you through any changes to the application process in 2025 and improve your chances of winning benefits at the hearing stage.