The Social Security Administration confirmed Thursday there will not be a cost of living increase for 2016 due to declines in consumer prices.

The nearly 65 million recipients of monthly Social Security and Supplementary Social Security Income will see no automatic increase in their payments next year. Steep declines in oil prices have driven down inflation for many of the consumer goods that the federal government includes in its cost of living calculations. The move had been widely anticipated in recent days ahead of Thursday's official announcement.

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, or CPI-W.  The period of consideration includes the third quarter of the last year a cost-of-living adjustment, or 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, along with the retirement earnings test exempt amounts. These amounts will remain unchanged in 2016. 

The Department of Health and Human Services has not yet announced Medicare premium changes for 2016, the Social Security Administration noted.  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.

Sen. Ron Wyden, D-Ore., the ranking Democrat on the Senate Finance Committee, nevertheless expressed alarm about the news that Social Security beneficiaries will not receive a cost of living adjustment in 2016. He pointed out that one serious effect of this news is that some seniors would face Medicare Part B premium increases of over 50 percent, and all Medicare beneficiaries would see their deductible increase by a similar rate.

“Today’s news confirms that seniors, through no fault of their own, will face substantially higher Medicare costs on top of not receiving a cost of living increase next year.” Wyden said in a statement. “Significant increases in Medicare Part B premiums and deductibles can and should be prevented by Congress on a bipartisan basis before the end of the year.”

The information about the Medicare changes for 2016, when it's available, will be found at For additional information, please go to A fact sheet provides more information on the 2016 Social Security and SSI changes.

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