Social Security Beneficiaries Get No COLA Increase in 2016

Third Year of No Increases in 40-Year History

 

For the third time in the last six years, nearly 65 million Americans will not receive a cost-of-living adjustment (COLA) increase to their Social Security income for 2016.   

Social Security and Supplemental Security Income beneficiaries had received increases every year since 1975, when Congress first enacteautomatic benefit increases. That changed in 2010, when income remained flat for two years. The COLA increase in 2015 was only 1.7 percent, up 0.3 percent from 2014.

COLA raises are based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). In Fiscal Year 2015, inflation declined by 0.4 percent, largely due to the decreasing price of gasoline.automatic benefit increases. That changed in 2010, when income remained flat for two years. The COLA increase in 2015 was only 1.7 percent, up 0.3 percent from 2014.

The loss of the Social Security COLA is especially bad news for many Medicare Part B beneficiaries. Those with Part B premiums withheld from their SS checks—about 70% of total beneficiaries—will continue paying $104.90 per month even as this income remains frozen. The remaining will still bear the brunt of increasing Medicare costs, with most paying premiums of $121.80 per month, or 16% more, in 2016.

Numerous advocates are calling for a change.  Every year since 2009, U.S. Representative Eliot Engel (D-NY) has introduced The Guaranteed Cost of Living Adjustment for Seniors Act, which would pay COLAs based on the Consumer Price Index for Elderly (CPI-E), a more reasonable standard for American retirees. The bill would also guarantee a three percent COLA increase every year, even if the CPI-E falls below.

A recent survey by The Seniors Citizens League shows that Social Security benefits do not correspond with mounting household budgets. Medical costs alone are expected to increase by 6.5% in 2016, according to PricewaterhouseCooper’s Health Research Institute.

The record low growth in COLAs in recent years is causing long-term budget shortfalls for about 31 million Americans aged 65 and older, according to The Seniors League.


For more official information on Social Security or Medicare changes in 2016, visit https://www.ssa.gov/ or https://www.ssa.gov/

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