No cost-of-living adjustment for 2016

During 2015, disability beneficiaries got an average of $1,165 per month. This amount was higher than the previous year due to something called the cost-of-living adjustment (COLA). Every year, except for 2010 and 2011, there has been a COLA increase based on inflation.

The government takes a look at price changes of transportation, energy, food, housing, education and recreation to calculate an index called the Consumer Price Index for Urban Wage Earners and Clerical Workers. If this number goes up, the government can decide to also implement a COLA increase.

Although there was a 1.7-percent increase last year, there will be no increase for 2016. Some senior advocate groups say the calculation is not fair to elderly people. This year’s index drop had a lot to do with lower gas prices. The advocacy groups point out that elderly individuals do not drive as much as working individuals do. At the same time, they tend to spend a lot more money on health care.

There are some 65 million Americans that receive Social Security benefits. The COLA determination can be extremely important for those individuals who live solely off their benefits. Politicians have taken steps to change the law by introducing bills that would change the way COLA is decided. There is some hope that in the future a better system would offer a fairer adjustment for those who are totally disabled and unable to work. While it’s unfortunate that 2016 will bring no increase, there is hope that the following year will be different.