Automatic Determinations

COLA history

How COLA is used

Federal SSI benefit rate

Wage-indexed amounts

What is a COLA?
Legislation enacted in 1973 provides for cost-of-living adjustments, or COLAs. With COLAs, Social Security and Supplemental Security Income (SSI) benefits keep pace with inflation.

No COLA
There will be no increase in Social Security benefits payable in January 2016, nor will there be an increase in SSI payments.

How is a COLA calculated?
The Social Security Act specifies a formula for determining each COLA. According to the formula, COLAs are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-Ws are calculated on a monthly basis by the Bureau of Labor Statistics.

A COLA effective for December of the current year is equal to the percentage increase (if any) in the average CPI-W for the third quarter of the current year over the average for the third quarter of the last year in which a COLA became effective. If there is an increase, it must be rounded to the nearest tenth of one percent. If there is no increase, or if the rounded increase is zero, there is no COLA.

COLA Computation
The last year in which a COLA became effective was 2014. Therefore the law requires that we use the average CPI-W for the third quarter of 2014 as the base from which we measure the increase (if any) in the average CPI-W. The base average is 234.242, as shown in the table below.

Also shown in the table below, the average CPI-W for the third quarter of 2015 is 233.278. Because there is no increase in the CPI-W from the third quarter of 2014 through the third quarter of 2015, there is no COLA for December 2015.

  CPI-W for—
2014 2015
July 234.525 233.806
August 234.030 233.366
September 234.170 232.661
Third quarter total 702.725 699.833
Average (rounded to the nearest 0.001) 234.242 233.278