Published on: November 21, 2014
Oncoming Cost of Living Adjustments (COLA) made by the Social Security Administration will take effect at the end of December 2014, with the following month being the first payable under the new COLA (January 2015). While the coming increase in Cost of Living won’t radically affect your benefits, there are some minor changes you can expect to see in 2015.
The December 2014 Cost of Living Adjustment represents the largest change to COL since 2011, when inflation led to an over 3% increase in COLA. This year, the Cost of Living Adjustments for retirement benefits, SSDI and SSI recipients is 1.7%. This spells incremental and nationwide increases for all recipients, whether they are receiving Social Security benefits as:
- A disabled worker
- A disabled widow
- A retired worker
- An aging worker
- The spouse of a retiree
- Or as surviving children of a beneficiary
Benefit Increase Amounts Based on COLA Percentage
Whether you currently receive disability benefits, retirement benefits or SSI, the 2014 Cost of Living Adjustment, like other COLAs before it, will result in noticeable, percentage-based increases in your 2015 benefit amounts.
For instance, if you are a disabled worker receiving benefits through the SSA in the form of disability insurance, who receives $1,146 monthly in supplementary support, you can expect a $19 increase in monthly benefits, reflecting inflation and small increases in Cost of Living.
This same adjustment applies for family benefits of the disabled, retired or deceased; if you receive, for example, $1943 in total benefits for a spouse, yourself and your children, you can expect those benefits to increase 1.7% in December 2014, to $1,976 (a direct 1.7% increase in benefits, rounded down to the lower dollar). The first payment with the new amount is for December 2014, and is payable in january 2015.
Automatic Cost of Living Adjustments were first introduced in 1975, to help the SSA deal with changes in inflation amount and economic fluctuations that occur on a yearly basis. If there is no increase in COL for a set year period, adjustments are not made for that year (as was the case in 2009 and 2010, the first and last times this has occurred since 1975).
Adjustments to Cost of Living are computed from changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers, most often shortened to CPI-W. The U.S. Bureau of Labor Statistics calculates this amount every month, which helps the SSA keep track of changes and make necessary adjustments for the new year.
The COLA used by Social Security is based on the increase in the CPI-W for October 1 to September 30 of that year.
If you or a loved one are receiving disability support through the SSA, and would like to learn more about what affects changes in COLA will have on your benefits, don’t hesitate to contact us today. Our knowledgeable, experienced team of disability professionals can help you ensure that you receive the full benefits you deserve, including changes in 2015 benefit amount due to inflation.
Click here to access a fact sheet by the SSA regarding 2014/2015 changes to COLA.
