Cost of Living Adjustments

Massachusetts Attorneys Providing Guidance on Social Security Claims

When individuals apply for disability benefits, the amount of their benefits is calculated based on a formula involving the extent of their injury and past wages. Over time, however, the value of these wages may decrease as inflation rises. If Social Security disability benefits remain the same, a recipient will find that the money he or she receives is gradually worth less and less. While this is an issue of concern for disability beneficiaries, the Social Security Administration has tried to account for inflation by offering cost of living adjustments. At Kantrovitz & Associates, our Social Security lawyers can help Massachusetts residents understand how cost of living adjustments work and the effect they will have on the benefits that SSDI recipients receive.

What Is a Cost of Living Adjustment?

A cost of living adjustment (“COLA”) is a small increase in benefits that a disability beneficiary receives that is intended to counteract the effect of inflation over time. Disability benefits are calculated to ensure that an individual has the money that he or she needs in order to provide for basic needs such as food and shelter. Inflation, which is the gradual increase in cost for goods and services over time, gradually reduces the value of these benefits if they remain the same. Thus, for instance, if a week’s worth of groceries costs $300 a month this year, but rises to $400 a month in the next year, the $500 in benefits that a recipient receives will buy less over time. COLA acts to reduce the effect of inflation by increasing the value of one’s benefits at a pace similar to inflation.

How does a COLA work?

A COLA is determined by the Social Security Administration and is based on the Consumer Price Index as determined by the Bureau of Labor Statistics at the Department of Labor. Each year, the Bureau of Labor Statistics evaluates the average costs for goods and services that Americans purchase and creates a Consumer Price Index that measures the change in these costs. In the third quarter of every year, the Consumer Price Index from the prior year is compared to the Consumer Price Index from the current year. If the Index has increased by at least 0.1 percent, the Social Security Administration will issue a COLA to address this increase. If the index has increased by less than 0.05% or has not increased at all, a COLA is not issued. The exact amount of the COLA will correspond to the overall increase in the price of goods and services.

COLA increases are automatic. A disability recipient does not have to apply for a COLA increase, nor can a recipient specifically request an increase. Instead, the SSA applies increases to all beneficiary payments at the beginning of each year, if the increase is warranted.

Discuss Your Government Benefits Claim with a Massachusetts Lawyer

If you are an SSDI recipient who is concerned that your benefits have decreased in value over time, or are not keeping pace with the cost of basic good and services, the government benefits attorneys at Kantrovitz & Associates can help. We can assist people throughout Massachusetts in evaluating their disability payments over time and determining whether COLA increases have been applied. We can also investigate whether the SSA has initiated COLA increases over the last few years and what the amounts of those increases were. Contact our office today for assistance at (800) 367-0871 or online. We have represented individuals from throughout Norfolk, Plymouth, Suffolk, and Essex Counties, as well as the Merrimack River area.