"To compensate for the effects of inflation, Social Security recipients received cost-of-living adjustments (COLAs) through the legislative process sporadically from 1950 to 1974, and automatically through a trigger mechanism in all but two years from 1975 to 2012. No adjustment was made in 2010 and 2011. Benefits will be increased by 1.7% in 2013, after an increase of 3.6% in 2012. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), updated monthly by the Department of Labor’s Bureau of Labor Statistics (BLS), is the measure that can trigger a change. The Social Security COLA is based on the percentage change in the index from the highest third calendar quarter average CPI-W recorded (most often, from the previous year) to the average CPI-W for the third calendar quarter of the current year. The COLA
becomes effective in December of the current year and is payable in January of the following year..."
Social Security: Cost-of_Living Adjustments
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