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.
The CPI-W is determined by the Bureau of Labor Statistics in the Department of Labor. By law, it is the official measure used by the Social Security Administration to calculate COLAs.
Congress enacted the COLA provision as part of the 1972 Social Security Amendments, and automatic annual COLAs began in 1975. Before that, benefits were increased only when Congress enacted special legislation.
Beginning in 1975, Social Security started automatic annual cost-of-living allowances. The change was enacted by legislation that ties COLAs to the annual increase in the Consumer Price Index (CPI-W).
Automatic Cost-Of-Living Adjustments received since 1975
| Year | Month | COLA Increase (%) |
|---|---|---|
| 1975 | July | 8.0 |
| 1976 | July | 6.4 |
| 1977 | July | 5.9 |
| 1978 | July | 6.5 |
| 1979 | July | 9.9 |
| 1980 | July | 14.3 |
| 1981 | July | 11.2 |
| 1982 | July | 7.4 |
| 1984 | January | 3.5 |
| 1985 | January | 3.5 |
| 1986 | January | 3.1 |
| 1987 | January | 1.3 |
| 1988 | January | 4.2 |
| 1989 | January | 4.0 |
| 1990 | January | 4.7 |
| 1991 | January | 5.4 |
| 1992 | January | 3.7 |
| 1993 | January | 3.0 |
| 1994 | January | 2.6 |
| 1995 | January | 2.8 |
| 1996 | January | 2.6 |
| 1997 | January | 2.9 |
| 1998 | January | 2.1 |
| 1999 | January | 1.3 |
| 2000 | January | 2.5 |
| 2001 | January | 3.5 |
| 2002 | January | 2.6 |
| 2003 | January | 1.4 |
| 2004 | January | 2.1 |
| 2005 | January | 2.7 |
| 2006 | January | 4.1 |
| 2007 | January | 3.3 |
| 2008 | January | 2.3 |
| 2009 | January | 5.8 |
| 2010 | January | 0.0 |
| 2011 | January | 0.0 |
| 2012 | January | 3.6 |
| 2013 | January | 1.7 |
| 2014 | January | 1.5 |
| 2015 | January | 1.7 |
| 2016 | January | 0.0 |
| 2017 | January | 0.3 |
| 2018 | January | 2.0 |
| 2019 | January | 2.8 |
| 2020 | January | 1.6 |
| 2021 | January | 1.3 |
| 2022 | January | 5.9 |
| 2023 | January | 8.7 |
| 2024 | January | 3.2 |
| 2025 | January | 2.5 |