The Social Security wage increase for veterans’ benefits and federal pensions is among the lowest increase in years.
According to preliminary figures, Social Security wages will increase by only 1.5 percent year-over-year. The new figure is low because of consumer prices, which have not increased by much over the last 12 months.
Adjustments for Social Security were first announced in 1975 and for the second year in a row, those adjustments failed to reach above two percent.
Government officials will not reveal the exact cost-of-living adjustment, or COLA, until the Labor Department releases final inflation figures for September. Those numbers were supposed to be revealed on Wednesday, but have been delayed because of the government shutdown.
Nearly 58 million retirees, disabled workers, spouses and children receive help from Social Security benefits. The current average payment is $1,162 per month. A 1.5 percent raise would add $17 per month to those checks. While $17 may not seem like a lot of money, it can make a big difference to someone on a fixed income.
The cost-of-living adjustment also benefits nearly 3 million disabled veterans and 2.5 million federal retirees. Cost-of-living adjustments also affect more than 8 million Americans who receive Supplemental Security Income.
The COLA report is usually revealed in October so Social Security workers have time to adjust payments for January of the following year.
The low 1.5 percent increase in Social Security wages is likely to anger many people who receive that income. Seniors have long complained that Social Security payments have failed to keep up with actual inflationary prices.
Taking into account all Social Security wage increases since 1975, the average annual increase is 4.1 percent. An increase of 2 percent or less has only occurred six times, including a 2013 increase of just 1.7 percent. In 2010 and 2011, there was no increase because inflation was too low.
The cost-of-living adjustment is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers. That index measures consumer prices, including changes for food, housing, clothing, transportation, energy, medical care, recreation and education.
Do you think Social Security wage increases are too low based on the actual cost of living these days?