The cost-of-living adjustment, or COLA usually provided to Social Security Disability beneficiaries on an annual basis will not be available next year. Retirees and Disabled Veterans will not receive an increase in benefits either. This is bad news in light of higher medicare costs.
In 1975 Congress passed legislation providing for an annual increase in benefits to account for increases in inflation. However, the formula used to determine inflation uses a consumer price index which relies heavily on gas prices. Since gas prices have been dropping, figures used to determine the COLA led the government to conclude that there hasn't been any significant inflation that would justify an increase in benefits.
It is widely accepted that the drop in gas and heating oil prices were the main reason why there will be no COLA in 2016. However, the cost of other items and services that disabled individuals spend a great deal of money on --such as health care-- went up last year. Therefore, Social Security Disability beneficiaries will take a big hit as a result of not receiving the yearly boost in benefits. It is estimated that the prices for medical care increased by 2.4 percent last year. The prices for other items that disabled beneficiaries need have also gone up. For example, the price of housing went up by 3.2 and food prices climbed by 1.6 percent.
Advocates for the disabled and the elderly have argued for years that the formula used by the government to determine inflation does not accurately reflect the cost of good and services consumed by this sector of the population. Instead, advocates favor another price index called the CPI-E (E for elderly), which takes into consideration the specific spending patters of those who are elderly. Congressman Eliot Engel (D-N.Y.) is proposing legislation that would amend the law and require the use of the consumer price index for the elderly instead of the consumer price index being used now.
Advocates for the disabled and the elderly have argued for years that the formula used by the government to determine inflation does not accurately reflect the cost of good and services consumed by this sector of the population. Instead, advocates favor another price index called the CPI-E (E for elderly), which takes into consideration the specific spending patters of those who are elderly. Congressman Eliot Engel (D-N.Y.) is proposing legislation that would amend the law and require the use of the consumer price index for the elderly instead of the consumer price index being used now.
