No Increase in Social Security Benefits Next Year

For just the third time in 40 years, millions of Social Security recipients, disabled veterans and federal retirees can expect no increase in benefits next year.  By law, the annual cost-of-living adjustment, "COLA," is based on a government measure of inflation. 

The government is scheduled to announce the COLA — or lack of one — on Thursday, when it releases the Consumer Price Index for September. Inflation has been so low this year that economists say there is little chance the September numbers will produce a benefit increase for next year. Prices actually have dropped from a year ago, according to the inflation measure used for the COLA.

Congress enacted automatic increases for Social Security beneficiaries in 1975, when inflation was high and there was a lot of pressure to regularly raise benefits. Since then, increases have averaged 4 percent a year.  Only twice before, in 2010 and 2011, have there been no increases. 

Almost 60 million retirees, disabled workers, spouses and children get Social Security benefits. The average monthly payment is $1,224.  The COLA also affects benefits for about 4 million disabled veterans, 2.5 million federal retirees and their survivors, and more than 8 million people who get Supplemental Security Income, the disability program for the poor. Many people who get SSI also receive Social Security. 

In all, the COLA affects payments to more than 70 million Americans, more than one-fifth of the nation's population. 

Medicare premiums, however, will increase.