WASHINGTON, D.C. –U.S. Senator John Boozman (R-AR) today said the announcement of a 3.6 percent increase for Social Security recipients “welcome news for Arkansas’s seniors.”
“This is welcome news for Arkansas’s seniors. Over the past two years they have watched as the cost of food, medicine, housing, energy and other necessities has risen while their retirement accounts and home values have taken a huge hit. The COLA will help our seniors—especially those living on fixed incomes—make ends meet in this challenging, volatile economy,” Boozman said.
In the third quarter of each year, Social Security and Supplemental Security Income (SSI) benefits are reviewed to see if a cost of living adjustment (COLA) is necessary to ensure that the purchasing power of benefits are not diminished by inflation.
The Social Security Administration uses a formula for determining the amount of a COLA that is based on the cost of living as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). If there is no increase at the time of the annual review of the CPI-W, there is no COLA. Such was in the case in 2010 and 2011, the first two years without a COLA since automatic increases were adopted in 1975.
According to the Social Security Administration, 63 million Americans who are drawing Social Security and SSI benefits will receive the COLA.
The COLA is set to kick in for Social Security benefits this December. For SSI recipients, it will begin January 2012.