Social Security Disability benefits are subject to an annual review to determine whether a Cost of Living Adjustment (COLA) is merited. The Social Security Administration uses the Consumer Price Index to determine if the overall cost of living has risen. If it has, a proportionate Cost of Living Adjustment (COLA) is added to Social Security Disability benefit payments for the year.
The Consumer Price Index (CPI) is based on information gleaned in government surveys regarding the overall expenses of those living in urban areas of the nation. The CPI is designed to be a snapshot of how the overall cost of living has changed across the United States. The CPI affects Social Security Disability recipients because it is used to determine whether a Cost of Living Adjustment (COLA) will be added to benefit amounts. Depending on where you live, the CPI may or may not accurately reflect the actual expense changes in your area.
The Social Security Administration determines whether you will receive a Cost of Living Adjustment (COLA) to your Social Security Disability benefits. You will be informed of this in one of two ways:
- If you receive your Social Security Disability benefits by direct deposit or Direct Express®, you will receive a note in the mail explaining the Cost of Living Adjustment (COLA) to your Social Security Disability payments.
- If you receive your Social Security Disability payments by paper check through the mail, a note will come with your payment explaining the Cost of Living Adjustment (COLA).
Social Security Disability recipients do not receive a Cost of Living Adjustment (COLA) every year. A Cost of Living Adjustment (COLA) is only added to your benefit amount if the Consumer Price Index has gone up in the prior year. As of 2011, the CPI has not risen since 2008, meaning the Social Security Disability benefits have not received a Cost of Living Adjustment (COLA) since then.
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