Automatic Determinations

COLA history

How COLA is used

Federal SSI benefit rate

Wage-indexed amounts

What is a COLA?
Legislation enacted in 1973 provides for cost-of-living adjustments, or COLAs. With COLAs, Social Security and Supplemental Security Income (SSI) benefits keep pace with inflation.

Latest COLA
The latest COLA is 1.6 percent for Social Security benefits and SSI payments. Social Security benefits will increase by 1.6 percent beginning with the December 2019 benefits, which are payable in January 2020. Federal SSI payment levels will also increase by 1.6 percent effective for payments made for January 2020. Because the normal SSI payment date is the first of the month and January 1 is a holiday, the SSI payments for January are always made at the end of the previous December.

How is a COLA calculated?
The Social Security Act specifies a formula for determining each COLA. According to the formula, COLAs are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). CPI-Ws are calculated on a monthly basis by the Bureau of Labor Statistics.

A COLA effective for December of the current year is equal to the percentage increase (if any) in the CPI-W from the average for the third quarter of the current year to the average for the third quarter of the last year in which a COLA became effective. If there is an increase, it must be rounded to the nearest tenth of one percent. If there is no increase, or if the rounded increase is zero, there is no COLA for the year.

COLA Computation
The last year in which a COLA became effective was 2018. Therefore the law requires that we use the average CPI-W for the third quarter of 2018 as the base from which we measure the increase (if any) in the average CPI-W. The base average is 246.352, as shown in the table below.

Also shown in the table below, the average CPI-W for the third quarter of 2019 is 250.200. Because this average exceeds 246.352 by 1.6 percent, the COLA effective for December 2019 is 1.6 percent. The COLA calculation, with the result rounded to the nearest one-tenth of one percent, is:

(250.200 - 246.352) / 246.352 x 100 = 1.6 percent.

  CPI-W for—
2018 2019
July 246.155 250.236
August 246.336 250.112
September 246.565 250.251
Third quarter total 739.056 750.599
Average (rounded to the nearest 0.001) 246.352 250.200