No Cost-of-Living Adjustment for Social Security Recipients in 2016
Recently, 65 million retired and disabled workers, spouses, and children were given bad news from the Social Security Administration. Social Security retirement and disability checks are usually given a Cost-of-Living Adjustment (COLA) each year based on the overall inflation rate. However, the Social Security Administration announced that there will not be a Cost-of-Living Adjustment for 2016. This is only the third time in 40 years that a Cost-of-Living Adjustment has not been given. Due to the low inflation rate in 2015, as calculated by the Consumer Price Index, Social Security checks for 2016 will remain the same as they were in 2015.
Although inflation was negligible for 2015, other costs have gone up. In 2015, housing costs went up 3.7%, medical costs went up 2.4%, and food prices have risen by 1.6%. Seniors and disabled workers will have to face relatively higher prices without an increase in benefits. Because there will not be a cost-of-living adjustment for 2016, the maximum amount of earnings subject to Social Security tax will also remain the same.
The lack of a Cost-of-Living Adjustment will also impact seniors and disabled workers' Medicare. For most receiving Social Security benefits, outpatient premiums for Medicare are taken out of the recipient's Social Security check. Usually, the Cost-of-Living increase covers a recipient's increase in Medicare premiums. When it does not, 70% of seniors are saved by a "hold harmless" law that does not allow for seniors' payments to be reduced. However, for the other 30%, the rise in premiums will not be covered by the Cost-of-Living increase and can mean a dramatic increase in Medicare premiums. Although inflation has remained relatively the same, many of those receiving Social Security benefits will be harmed in 2016 without the increase.
For more information on Cost-of-Living Adjustments and Social Security disability benefits, contact an experienced Social Security disability attorney at Gardberg & Kemmerly, P.C. today at 251-343-1111 for a free case evaluation. Gardberg & Kemmerly, P.C. represents Social Security disability claimants in Alabama, Mississippi, Florida, and Louisiana at all levels of the disability process from initial application to appeals to Federal Court.