Social Security Administration: No Social Security Cost Of Living Adjustment in 2011

Submitted by mpjones@ancor.org on Fri, 10/15/2010 - 1:11pm
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Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 58 million Americans will not automatically increase in 2011, the Social Security Administration announced today.

Why? According SSA’s website, “under existing law, there can be no COLA in 2011. As determined by the Bureau of Labor Statistics, there is no increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of 2008, the last year a COLA was determined, to the third quarter of 2010.”  In other words, inflation is too low.

By law, annual increases to Social Security benefits are tied to a rise in inflation, but economists say consumer prices have not altered significantly enough to trigger an increase. Accordingly, the coming year will be just the second since COLA was established in 1975 that benefits will not rise. The first time this happened was in 2010.

Without COLA, the maximum monthly payment an individual on SSI will be able to receive from the federal government will remain flat at $674, while couples will continue to be eligible for up to $1,011 monthly.

House of Representatives leadership said they will vote on a bill in November to provide one-time payments of $250 to more than 50 million Social Security recipients, much like the payments made to government beneficiaries in 2009. White House officials say the President supports efforts to provide the additional one-time payments to seniors, veterans and individuals with disabilities.

Other changes that would normally take effect based on changes in the national average wage index also will not take effect in January 2011.  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 2011.  The attached fact sheet provides more information on 2011 Social Security and SSI changes.

For additional information about the 2011 COLA, go to www.socialsecurity.gov/cola. 

For additional information about changes in the national average wage index, go to www.socialsecurity.gov/OACT/COLA/AWI.html.