As expected, there will be no cost-of-living adjustment (COLA) benefit increase next year for millions of Social Security recipients, according to a Social Security press release issued today.
This marks just the third time in 40 years that payments will remain flat, with all three times coming since 2010.
The Social Security Act provides for an automatic increase in Social Security and SSI benefits if there is an increase in inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The period of consideration includes the third quarter of the last year a cost-of-living adjustment (COLA) was made to the third quarter of the current year. As determined by the Bureau of Labor Statistics, there was no increase in the CPI-W from the third quarter of 2014 to the third quarter of 2015. Therefore, under existing law, there can be no COLA in 2016.
Signifcantly lower gas prices were blamed for the lack of an increase in this year's CPI-W measurement compared to last year's.
Congress enacted automatic increases for Social Security beneficiaries in 1975, when inflation was high and there was pressure to regularly raise benefits. Since then, increases have averaged 4 percent a year.
