Since 1975, Social Security general benefit increases have been cost-of-living
adjustments or COLAs. The 1975-82 COLAs were effective with Social Security benefits
payable for June in each of those years; thereafter COLAs have been effective
with benefits payable for December.
Prior to 1975, Social Security benefit increases were set by legislation.
The COLA for December 1999 was originally determined as 2.4 percent based on
CPIs published by the Bureau of Labor Statistics. Pursuant to Public Law
106-554, however, this COLA is effectively now 2.5 percent.
The first COLA, for June 1975, was based on the increase in the Consumer Price Index
for Urban Wage Earners and Clerical Workers (CPI-W) from the second quarter of 1974 to
the first quarter of 1975. The 1976-83 COLAs were based on increases in the CPI-W from
the first quarter of the prior year to the corresponding quarter of the current year
in which the COLA became effective. After 1983, COLAs have been based on increases in
the CPI-W from the third quarter of the prior year to the corresponding quarter of the
current year in which the COLA became effective.
COLAs for the Supplemental Security Income (SSI)
program are generally the same as those for the Social Security program.
However, COLAs for SSI have generally been effective for the month
following the effective month of Social Security benefit increases. See
SSI historical payment standards for more detail.