Each year Social Security announces the annual costofliving adjustment (COLA). Usually there is an increase in the Social Security and Supplemental Security Income (SSI) benefit amount people receive each month, starting the following January. By law, federal benefits increase when the cost of living rises, as measured by the Department of Labor’s Consumer Price Index for Urban Wage Earners and Clerical Workers (CPIW).
The CPIW rises when prices increase for the things the average consumer buys. This means that when prices for goods and services purchased become more expensive, on average, the COLA increases monthly benefit levels and helps Medicare beneficiaries keep up with the changing cost of living.
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