Elizabeth L. Moreland, NCP-E, SCS, HCCP, SHCM, FHC
On October 18, 2016, the Social Security Administration announced that the nation’s nearly 66 million Social Security recipients will receive a 0.3% cost of living increase for 2017. This is up from last year, which saw no increase. The increase will show up in regular Social Security checks in January and for Supplemental Security Income (SSI) benefits on Dec. 31, 2016.
Since 1975, the law has linked Social Security COLA to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). It is set each October based on the CPI-W for the 12 months ending September 30.
Social Security COLAs have flat-lined at unprecedented lows over the past seven years, averaging just 1.2% a year, which is, less than half the 3% that COLAs averaged from 2000 to 2009.
Beyond this tiny increase in benefits, the Medicare Part B premium, released later this month, is likely to experience a significant jump. Some experts predict this increase to be as much as a 20%. Because of the “hold harmless” rule, which protects most retirees against a net decline in Social Security benefits, the increase for the 2017 Medicare Part B premium cannot exceed the dollar amount of Social Security benefit increase. That means the increase in Medicare Part B premiums could vary widely depending on the amount of an individual’s Social Security benefit.