Synopsis: No Social Security and Supplemental Security Income (SSI) COLA for 65 million Americans in 2016.
For the third time in only 7 years, senior Americans, and persons on disability benefits, will not see any Cost of Living Adjustment (COLA) increase in their Social Security benefits.
U.S. Social Security and Supplemental Security Income (SSI) benefits are adjusted to reflect the increase, if any, in the cost of living as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) prepared by the Bureau of Labor Statistics (BLS).
The purpose of the cost-of-living adjustment (COLA) is to ensure that the purchasing power of Social Security and SSI benefits is not eroded by inflation.
For purposes of determining the COLA, the average CPI-W for the third calendar quarter of the last year a COLA was determined is compared to the average CPI-W for the third calendar quarter of the current year. The resulting percentage increase, if any, represents the percentage that will be used to increase Social Security benefits beginning for December of the current year.
SSI benefits increase by the same percentage the following month (January).
If the increase in the CPI-W is at least one-tenth of one percent (0.1 percent), there will be a COLA. However, if the CPI-W increases by less than 0.05 percent, or if the CPI-W decreases, there will not be a COLA.
Monthly Social Security and Supplemental Security Income (SSI) benefits will not automatically increase in 2016 as there was no increase in the Consumer Price Index (CPI-W) from the third quarter of 2014 to the third quarter of 2015.
With consumer prices down over the past year, monthly Social Security and Supplemental Security Income (SSI) benefits for nearly 65 million Americans will not automatically increase in 2016.
The Social Security Act provides for an automatic increase in Social Security and SSI benefits if there is an increase in inflation as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).
The period of consideration includes the third quarter of the last year a cost-of-living adjustment (COLA) was made to the third quarter of the current year. As determined by the Bureau of Labor Statistics, there was no increase in the CPI-W from the third quarter of 2014 to the third quarter of 2015. Therefore, under existing law, there can be no COLA in 2016.
Other adjustments that would normally take effect based on changes in the national average wage index also will not take effect in January 2016. Since there is no COLA, the statute also prohibits a change in the maximum amount of earnings subject to the Social Security tax, as well as the retirement earnings test exempt amounts. These amounts will remain unchanged in 2016.
Important 2016 Social Security information
|NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.20% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings. Also, as of January 2013, individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9 percent in Medicare taxes . The tax rates shown above do not include the 0.9 percent.|
|Maximum Taxable Earnings:||2015||2016|
|Social Security (OASDI only)||$118,500||$118,500*|
|Medicare (HI only)||No Limit|
|Quarter of Coverage:||2015||2016|
|Retirement Earnings Test Exempt Amounts:||2015||2016|
|Under full retirement age|
NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.
|The year an individual reaches full retirement age|
NOTE: Applies only to earnings for months prior to attaining full retirement age. One dollar in benefits will be withheld for every $3 in earnings above the limit.
There is no limit on earnings beginning the month an individual attains full retirement age.
|Social Security Disability Thresholds:||2015||2016|
|Substantial Gainful Activity (SGA)|
|Trial Work Period (TWP)||$780/mo.||$810/mo.|
|Maximum Social Security Benefit:||2015||2016|
|Worker Retiring at Full Retirement Age||$2,663/mo.||$2,639/mo.**|
|SSI Federal Payment Standard:||2015||2016|
|SSI Resources Limits:||2015||2016|
|SSI Student Exclusion:||2015||2016|
|Estimated Average Monthly Social Security Benefits Payable in January 2016:|
|All Retired Workers||$1,341|
|Aged Couple, Both Receiving Benefits||$2,212|
|Widowed Mother and Two Children||$2,680|
|Aged Widow(er) Alone||$1,285|
|Disabled Worker, Spouse and One or More Children||$1,983|
|All Disabled Workers||$1,166|
Because there is no COLA, by law these amounts remain unchanged in 2016.
*A decrease in full maximum benefits occurs when there is no COLA, but there is an increase in the national average wage index.
The Department of Health and Human Services has not yet announced Medicare premium changes for 2016.
Should there be an increase in the Medicare Part B premium, the law contains a "hold harmless" provision that protects approximately 70 percent of Social Security beneficiaries from paying a higher Part B premium, in order to avoid reducing their net Social Security benefit. Those not protected include higher income beneficiaries subject to an income-adjusted Part B premium and beneficiaries newly entitled to Part B in 2016. In addition, beneficiaries who have their Medicare Part B premiums paid by state medical assistance programs will see no change in their Social Security benefit. The state will be required to pay any Medicare Part B premium increase.
The Senior Citizens League
In a press release The Senior Citizens League (TSCL), is calling on every Member of Congress to provide emergency COLA and Medicare relief for 2016, saying that Congress should:
To learn how you can join the effort for an Emergency COLA and Medicare relief, Visit www.SeniorsLeague.org
Information about Medicare changes for 2016, when available, will be found at www.medicare.gov
For additional information, please go to https://www.ssa.gov/news/cola/