No Social Security Cost of Living Adjustment for 2016

The Social Security Administration announced there will be no cost of living adjustment (COLA) for benefits for the calendar year 2016. There are almost 13 million persons receiving Social Security Disability payments and/or SSI that will be impacted by this decision not to give a COLA.

History of the Cost of Living Adjustment.

The purpose of the yearly adjustment is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits are not eroded by inflation.

How does Social Security calculate the Cost of Living Adjustment?

It is based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year. If there is no increase, there can be no COLA. [1]

Automatic COLA adjustments began in 1975, and the only years in which there has been no COLA are 2010, 2011, and now, 2016.

 

Interestingly, the Social Security Trust Fund took in 855 Billion dollars in 2014. Of that 855 Billion, only 96.2% was paid out to beneficiaries and to cover administrative expenses.[2] That means that the Social Security Taxes collected over what was paid resulted in a net surplus of 3.8%.

Our firm has been practicing Social Security Disability Law since 1994. If your claim for Social Security Disability benefits has been denied, it is crucial you appeal the Social Security disability denial within 60 days. As a Tampa Social Security Law Firm, we will do everything in our power to keep you from losing out on disability benefits you deserve. Our Tampa Disability Lawyers are available for free consultations.

[1] http://www.ssa.gov/news/cola/

[2] http://www.ssa.gov/policy/docs/chartbooks/fast_facts/2014/fast_facts14.pdf

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