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No 2016 COLA Increase for Social Security Disability & Veteran Disability Recipients

  • Publish Date : 2015/10/15 - (Rev. 2016/03/27)
  • Author : U.S. Department of Social Security
  • Contact : ssa.gov

Synopsis: No Social Security and Supplemental Security Income (SSI) COLA for 65 million Americans in 2016.


Main Document

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

Tax Rate:20152016
Employee7.65%7.65%
Self-Employed15.30%15.30%
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:20152016
Social Security (OASDI only)$118,500$118,500*
Medicare (HI only)No Limit
Quarter of Coverage:20152016
$1,220$1,260
Retirement Earnings Test Exempt Amounts:20152016
Under full retirement age

NOTE: One dollar in benefits will be withheld for every $2 in earnings above the limit.

$15,720/yr.
($1,310/mo.)
$15,720/yr.*
($1,310/mo.)
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.

$41,880/yr.
($3,490/mo.)
$41,880/yr.*
($3,490/mo.)
Social Security Disability Thresholds:20152016
Substantial Gainful Activity (SGA)
Non-Blind
Blind

$1,090/mo.
$1,820/mo.

$1,310/mo.
$1,820/mo.*
Trial Work Period (TWP)$780/mo.$810/mo.
Maximum Social Security Benefit:20152016
Worker Retiring at Full Retirement Age$2,663/mo.$2,639/mo.**
SSI Federal Payment Standard:20152016
Individual$733/mo.$ 733/mo.*
Couple$1,100/mo.$1,100/mo.*
SSI Resources Limits:20152016
Individual$2,000$2,000
Couple$3,000$3,000
SSI Student Exclusion:20152016
Monthly limit$1,780$1,780*
Annual limit$7,180$7,180*
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:

  • Provide Social Security beneficiaries with an emergency COLA. Medical costs are on the rise, and many seniors are currently experiencing excessive prescription drug price increases of 1,000% or more. Those increases are not reflected in the COLA since it is based on the way young, urban workers spend their money, using the CPI-W. TSCL feels strongly that a modest one-time payment of $250 would give seniors much-needed relief next year.
  • Prevent a 50 percent Medicare premium hike from taking effect. According to the Medicare Trustees, an estimated 15 million Medicare beneficiaries will be hit with Part B premium hikes of 50 percent next year, along with $80 increases in deductibles. TSCL believes that the abrupt and dramatic increase must be prevented, and we hope Congress will pass legislation like the Protecting Medicare Beneficiaries Act (S. 2148) or the Medicare Premium Fairness Act (H.R. 3696).

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/

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