What is a COLA?
Legislation enacted in 1973 provides for costofliving adjustments, or COLAs. With
COLAs, Social Security and Supplemental Security Income (SSI) benefits keep pace with
inflation. Latest COLA
The latest COLA is 2.0 percent for Social Security benefits and SSI payments.
Social Security benefits will increase by 2.0 percent beginning with the December
2017 benefits, which are payable in January 2018. Federal SSI payment levels
will also increase by 2.0 percent effective for payments made for January 2018.
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 (CPIW). CPIWs 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 CPIW 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 2016. Therefore the law requires
that we use the average CPIW for the third quarter of 2016 as the base from which
we measure the increase (if any) in the average CPIW. The base average is
235.057, as shown in the table below.
Also shown in the table below, the average CPIW for the third quarter of 2017 is
239.668. Because this average exceeds 235.057 by 2.0 percent,
the COLA effective for December 2017 is 2.0 percent. The COLA calculation, with the result rounded to the nearest
onetenth of one percent, is:
(239.668  235.057)
/ 235.057 x 100 = 2.0 percent.

CPIW for— 
2016 
2017 
July 
234.771 
238.617 
August 
234.904 
239.448 
September 
235.495 
240.939 
Third quarter total 
705.170 
719.004 
Average (rounded to the nearest 0.001) 
235.057 
239.668 
