 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 (CPI-W). The period of consideration includes the
third quarter of the last year a cost-of-living adjustment (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, as well as the retirement earnings test exempt
amounts. These amounts will remain unchanged in 2016. The attached
fact sheet provides more information on 2016 Social Security and SSI
changes.
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 The Department of Health and Human Services has not yet announced
Medicare premium changes for 2016. 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.
FACT
SHEET: 2016 Social Security Changes
Information about Medicare changes for 2016, when available, will be
found at www.medicare.gov.
For additional information, please go to
www.socialsecurity.gov/cola.
[Jack Myers, Public Affairs
Specialist, Area 8,
Social Security Administration] |
