On October 19, the Social Security Administration formally announced that based on the increase in the Consumer Price Index from the third quarter of 2008 through the third quarter of 2011, Social Security and Supplemental Security Income beneficiaries will receive a 3.6 percent cost-of-living adjustment (COLA) for 2012.Starting in January 2012, the maximum federal SSI payment for individuals will be $698 per month ($1048 for couples). This will be the first COLA increase since 2009.
If consumer prices increase from year to year, Social Security recipients automatically get higher payments, starting the following January. If price changes are negative, the payments stay unchanged. Social Security payments increased by 5.8 percent in 2009, the largest increase in 27 years, after energy prices spiked in 2008. But energy prices quickly dropped and home prices became soft in markets across the country, contributing to lower inflation in the past two years. As a result, Social Security recipients got an increase that was far larger than actual overall inflation. However, they can’t get another increase until consumer prices exceed the levels measured in 2008. So far this year, prices have been higher than in 2008,
For other important information regarding the COLA increas, includingresource limitations, click here.