No Social Security Increase in 2016


Before this week, it had only happened two times since 1975. Now, it’s happening again.

There will be no Social Security benefit increase in 2016.

Benefits change on a year-to-year basis to adjust for cost-of-living. But with gas prices low this year, there has been little inflation to speak of – and therefore, it’s unlikely Social Security beneficiaries will see a COLA adjustment in 2016.

More from CBS:

By law, the annual cost-of-living adjustment, or COLA, is based on a government measure of inflation, which is being dragged down by lower prices at the pump.

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.

“It’s a very high probability that it will be zero,” said economist Polina Vlasenko, a research fellow at the American Institute for Economic Research. “Other prices – other than energy – would have to jump. It would have to be a very sizable increase that would be visible, and I don’t think that’s happened.”


The COLA is calculated by comparing consumer prices in July, August and September each year with prices in the same three months from the previous year. If prices go up, benefits go up. If prices drop or stay flat, benefits stay the same.

The numbers for July and August show that, overall, consumer prices have fallen since last year. Fuel prices are down by 23 percent from a year ago, according to the August inflation report. But prices for some other goods and services, such as health care and housing, are up.

The average Social Security benefit is $1,224 per month.


Photo by  frankieleon via Flickr CC License

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