Social Security Benefits to Go Up by 1.7 Percent
On Oct. 22, the federal government announced that the Social Security Cost of Living Adjustment (COLA) for 2015 will be 1.7 percent. This is up from the 2014 increase of 1.5 percent, but less than the 3.6 percent increase of 2012. Next year will mark only the eighth time the COLA has been less than 2 percent. Payments will begin in January and will also affect persons receiving SSI, VA pensions, Civil Service Pensions, and Railroad Retirement.
The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits isn’t eroded by inflation. It’s based on the percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the last year a COLA was determined to the third quarter of the current year. If there’s no increase, there can be no COLA.
The latest COLA announcement will increase the monthly pension for the average retired worker by $22 per month. Owners and managers of sites that are required to determine the income of residents should use the 1.7 percent increase when projecting the income of applicants and residents. You can add the 1.7 percent COLA by multiplying the current award amount by 1.017.