The 2016 COLA was 0.3 percent, the smallest increase in the program's history

In 2016, Social Security Disability Insurance (SSDI) payments increased by 0.3 percent. This was the smallest cost of living adjustment (COLA) since automatic adjustments began in 1975. If you received SSDI in December 2015, your January 2016 payment reflected this increase.

The 0.3 percent figure came from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), measured from the third quarter of 2014 to the third quarter of 2015. When inflation is very low, the COLA is very low. In 2016, inflation was historically flat, which is why the adjustment was so small.

For context: the average SSDI payment in 2016 was roughly $1,165 per month. A 0.3 percent increase meant the average recipient gained about $3 to $4 per month. Some people received no increase at all because the adjustment was so small that it rounded to zero for their individual payment amount.

Key Takeaways

  • The 2016 COLA of 0.3 percent was the lowest in the program's 41-year history of automatic adjustments.
  • Your January 2016 payment amount was determined by the Consumer Price Index measured from mid-2014 to mid-2015, not by current economic conditions.
  • The increase was so small that some recipients saw no change in their monthly payment because the adjustment rounded to less than one dollar.
  • COLA amounts are set by law and do not change based on individual circumstances, income, or requests.

Why the 2016 COLA was so small

The COLA is not chosen by Social Security or Congress. It is calculated automatically using a specific measure of inflation: the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The formula compares the average CPI-W for July, August, and September of one year to the same three months in the previous year. If there is no increase, the COLA is zero.

In 2015, the CPI-W showed almost no inflation. Gas prices fell sharply. Food prices dropped. Medical costs rose slightly, but not enough to offset the declines elsewhere. The result was that the overall index barely moved, producing a COLA of 0.3 percent.

This was unusual. Between 2000 and 2015, the average annual COLA was about 2.5 percent. In 2008 and 2009, during the financial crisis, there was no COLA at all. The 2016 adjustment was the smallest positive increase ever recorded.

How the 2016 COLA affected your payment

If you were receiving SSDI in December 2015, your January 2016 payment increased by 0.3 percent. The Social Security Administration calculated this automatically. You did not need to do anything, and you could not request a different amount.

Because 0.3 percent is so small, many recipients saw no visible change. If your payment was $1,000 per month, the increase was $3. If your payment was $500 per month, the increase was $1.50. Payments below $333 per month saw no increase at all because the adjustment rounded down to zero.

The increase applied only to your SSDI benefit. If you also received Supplemental Security Income (SSI), that program had its own separate COLA calculation, which was also 0.3 percent in 2016.

What happened to Medicare and Medicaid premiums in 2016

Even though your SSDI payment increased by 0.3 percent, your Medicare Part B premium did not increase by the same amount. In fact, your Medicare Part B premium stayed the same as 2015 for most people.

This happened because of a rule called the "hold harmless" provision. When the COLA is very small, Social Security is required to hold most beneficiaries harmless — meaning their Medicare Part B premium cannot increase more than their SSDI increase. In 2016, since the COLA was only 0.3 percent, Medicare Part B premiums were frozen for people already on Medicare.

However, people who were new to Medicare in 2016 paid a higher premium because they were not protected by the hold harmless rule. This created a two-tier premium system that year.

The years before and after 2016

To understand how unusual 2016 was, it helps to see the COLAs in nearby years. In 2015, there was no COLA at all — payments stayed the same. In 2017, the COLA was 0.3 percent again, the second-smallest increase on record. In 2018, it jumped to 2.0 percent. In 2019, it was 1.6 percent.

The pattern shows that very low COLAs are rare but not impossible. They happen when inflation is flat or negative. They are not a sign that the program is in trouble or that Congress has changed the rules. They are straightforward the result of the automatic formula applied to real economic data.

Whether you could have done anything about the 2016 COLA

No. The COLA is set by law and calculated automatically. You cannot request a higher increase, appeal it, or opt out of it. Social Security does not have the power to change it, and neither do you.

If you believed your payment was calculated incorrectly — for example, if you thought the increase was not applied to your account — you could contact Social Security to verify. But the amount of the COLA itself is not something that changes based on individual circumstances.

Some people wondered whether they should have worked longer or delayed claiming benefits to get a higher payment. The COLA does not work that way. It affects all beneficiaries equally, regardless of when they claimed or how much they earned.

Frequently Asked Questions

Did everyone on SSDI get the same 0.3 percent increase in 2016?

Yes, everyone on SSDI received the same 0.3 percent increase in January 2016. However, because the increase was so small, some people saw no change in their actual dollar amount if the increase rounded to less than one cent.

Why was the 2016 COLA so much smaller than other years?

Inflation was very low in 2015. Gas prices and food prices fell significantly, and the Consumer Price Index barely moved. The COLA is calculated directly from this index, so a low index produces a low COLA.

Did my Medicare premium go up in 2016 even though my SSDI payment barely increased?

For most people already on Medicare, no — the hold harmless rule froze Medicare Part B premiums in 2016. But people new to Medicare that year paid a higher premium because they were not protected by this rule.

Can I appeal the 2016 COLA amount or ask for a recalculation?

No. The COLA is set by federal law and calculated automatically using the Consumer Price Index. It cannot be appealed, changed, or recalculated based on individual circumstances.

How does the 2016 COLA compare to other years?

The 2016 COLA of 0.3 percent was the smallest positive increase in the program's history. Only 2010 and 2011 had zero COLAs. Most years see increases between 1.5 and 3 percent, depending on inflation.