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October 12, 2010

Cost-of-Living Adjustment (COLA) for Social Security Disability Benefits Recipients

Indianapolis Social Security disability benefits recipients receiving either Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) payments are entitled to a Cost-of-Living Adjustment (COLA) each year.  COLA is an automatic adjustment to the recipient’s benefits that may occur each year.  Indiana Social Security Disability Attorney Scott Lewis tries to explain to his clients how COLA may affect their disability payments.The purpose of COLA is so the purchasing power of SSDI or SSI benefits is not eroded by inflation.  The increase in payments is determined by the percentage increase from year to year of the Consumer Price Index for Urban Wage Earners and Clerical Worker (CPI-W) during the third quarter of the year.  This percentage increase of COLA is strictly based on the CPI-W increase so when there is not an increase in the CPI-W then there is no increase in COLA.  CPI-W increases are determined by the Bureau of Labor Statistics in the Department of Labor. In 2010, there was no increase in COLA.  As all SSDI and SSI recipients experienced, this is the first time in history, dated back to 1975, that there was not an increase in COLA. There was no SSDI and SSI COLA increase in 2010 because there was no increase in the CPI-W from the third quarter of 2008 to the third quarter of 2009. Therefore, SSDI and SSI payments remained the same in 2010. Indiana SSDI and SSI benefits recipients may be wondering if there will be a COLA increase in 2011.  According to recent studies, experts are predicting that there may not be a COLA increase in 2011 and possibly in 2012 due to lack of inflation. Official projections will be determined later this month.  Most Social Security disability recipients rely on these benefits as their only source of income. In some cases, the effects of no increase in COLA may be financially painstaking. At the … Continued

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