No Raise for Social Security Recipients in 2010

October 15, 2009 ( - The Social Security Administration announced there will be no cost-of-living adjustment (COLA) in 2010 for monthly social security and supplemental security income (SSI) benefits.

According to the announcement, 2010 will be the first year without a COLA since the adjustment went into effect in 1975. The Social Security Act provides that social security and (SSI) benefits increase automatically each year if there is an increase in the Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of the previous year to the third quarter of the current year, and there was no increase in the CPI-W from the third quarter of 2008 to the third quarter of 2009. 

Because there was no increase in the CPI-W this year, the starting point for determinations regarding a possible 2011 COLA will remain the third quarter of 2008.

The lack of change in the CPI-W affects other limitations as well.   For example, the social security taxable wage base (the maximum amount of earnings subject to the Social Security tax), used by some retirement plans in the formula to allocate employer contributions, as well as the retirement earnings test exempt amounts will also remain unchanged for 2010.

A fact sheet summarizing social security changes for 2010 is here .

The announcement said the Department of Health and Human Services has not yet announced if there will be any Medicare premium changes for 2010. Medicare changes, when available, can be found at .