Law Does Not Provide for a Social Security Cost-of-Living
Adjustment for 2016
According to the Social Security Administration (SSA) with consumer prices down over the past year, monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 65 million Americans will not automatically increase in 2016. In other words, there will be no increase to monthly Social Security retirement benefits for 2016.
The SSA goes on to state that 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. (For details see https://www.ssa.gov/oact/STATS/cpiw.html.)
Other adjustments that would normally take effect based on changes in the national average wage index also will not take effect in January 2016. Since there is no COLA, the statute also prohibits a change in the maximum amount of earnings subject to the Social Security tax, as well as the retirement earnings test exempt amounts. These amounts will remain unchanged in 2016. For more information see the Social Security 2016 Fact Sheet located at https://www.ssa.gov/news/press/factsheets/colafacts2016.pdf.
