Section 215(i)(1) of the Social Security Act defines the calendar quarters that are to be used in the calculation of a Cost-of-Living Adjustment (COLA). In particular, the Act defines a "cost-of-living computation quarter" to mean a third calendar quarter with respect to which the Consumer Price Index (CPI) has increased relative to the last such quarter. Simply put, this means that, if a COLA becomes effective in any year, the COLA must be greater than zero.
If there is no COLA in one year, how is the next COLA calculated?
Assuming Congress does not intervene by enacting a general benefit increase, the next COLA would become effective in December of the next year that has a third-quarter average CPI greater than the average for the last cost-of-living computation quarter.