What is Cost-of-Living Adjustment (COLA) in Social Security?

by Kara Dolan-West | Nov 05, 2014 | Social Security and Disability Compensation

The purpose of the COLA is to ensure that the purchasing power of Social Security and Supplemental Security Income (SSI) benefits is not eroded by inflation. It is 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 is no increase, there can be no COLA.

Tags: COLA cost of living adjustment Social Security benefits