No COLA Increase in 2016 for Social Security Disability, Veterans Disability Recipients

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Allsup outlines key financial considerations for individuals receiving SSDI benefits and VA disability compensation after Social Security reports there will not be a COLA increase in 2016

Tricia Blazier, Allsup

Tricia Blazier, personal health and financial planning director, Allsup

Allsup outlines financial issues for Social Security Disability Insurance recipients and veterans disability beneficiaries who won’t receive a cost-of-living adjustment in 2016.

About 10.8 million people with disabilities and their dependents who rely on Social Security Disability Insurance (SSDI) and about 3.7 million veterans receiving disability compensation won’t see a cost-of-living adjustment (COLA) in 2016. The Social Security Administration’s announcement that there won’t be a COLA may be distressing news for people with disabilities and their families, according to Allsup, a nationwide provider of SSDI representation, veterans disability appeal, and Medicare plan selection services.

“No increase in benefits may seem to contradict reality for many people with disabilities, seniors and veterans who see their costs for healthcare, food and other needs going up on a regular basis,” said Tricia Blazier, personal health and financial planning director for Allsup.

The federal COLA typically is applied to Social Security retirement, SSDI, veterans disability compensation and pension benefits, as well as Supplemental Security Income (SSI) benefits.

“Most people who must quit work due to a life-changing disability already experience financial devastation,” Blazier said. “SSDI benefits typically replace only a fraction of the income people earned when they were working.”

The COLA is based on the Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). It factors in the rate of inflation for goods and services that individuals buy. Typically, the COLA is calculated with a comparison of third-quarter results from data for the current year compared to the same quarter of the previous year. There was no increase in 2015.

“One advantage this year, however, is the ‘hold harmless’ protection that will help Social Security beneficiaries who use Medicare and whose premiums are deducted from their monthly benefits,” Blazier said. “This group makes up about 70 percent of Medicare beneficiaries, and they will not see their Part B premiums increase because there is no COLA.”

Earlier this year, the U.S. Department of Health and Human Services (HHS) forecast an increase in Medicare Part B premiums. However, with no COLA, those Medicare premium increases would affect a smaller portion of beneficiaries, about 30 percent. HHS has not yet announced Medicare Part B premiums for 2016.

There also was no COLA in 2010 and 2011 after consumer prices did not experience typical increases in 2009 and 2010. This is the third time in 40 years there has not been a COLA. All have been since 2010.

Managing Financial, Healthcare Costs In 2016

As SSDI and other beneficiaries review their expenses for next year, it may be important to revisit options in light of no COLA for next year.

Consider evaluating the following:

1. Examine the household budget and changes in cash flow. “Setting up a realistic budget by examining expenses this year and anticipated income next year can get you started on the right track,” Blazier said. “It may be important to cut certain expenses if you know that other costs are likely to go up, for example, groceries or healthcare.”

2. Review healthcare expenses. Health insurance can be a sizable cost for individuals with disabilities, and this time of year provides important opportunities to review choices.

Health Insurance Marketplace. “If you’re waiting for Medicare eligibility and are spending a lot on health insurance, you may want to review your options during the Health Insurance Marketplace open enrollment,” Blazier said. “You may have better, more affordable options to provide healthcare coverage for you and your family.” Marketplace open enrollment runs from Nov. 1 through Jan. 31, 2016.

Medicare. Seniors and people with disabilities who participate in Medicare also have the opportunity to make plan changes during annual open enrollment Oct. 15 to Dec. 7. “It may be possible to reduce your Medicare costs through a new choice in Medicare plans,” Blazier said.

3. Seek mortgage help or consider refinancing. Individuals experiencing difficulty with their mortgage may have alternatives for reducing their payments or finding relief by reaching out to the U.S. Department for Housing and Urban Development (HUD). “It’s important to start dealing with mortgage problems earlier, rather than later, because you are likely to have more options,” Blazier explained. Go to for more information, or click here to locate a HUD-approved housing counseling agency. HUD also provides a phone line (888) 995-4673 for help in more than 170 languages, 24/7 and 365 days of the year.

SSDI is a payroll tax-funded, federal insurance program. A portion of FICA taxes that workers pay is set aside for SSDI, as well as Social Security retirement and Medicare. SSDI benefits provide monthly income and access to Medicare after a 24-month waiting period.

Help With SSDI Benefits, Veterans Disability, Medicare Plans

Medicare recipients have until Dec. 7 to make Medicare plan changes for their 2016 healthcare coverage. To speak to an Allsup Medicare Advisor specialist, call (866) 521-7655 or visit

Veterans who are planning a VA disability appeal can receive assistance by calling (888) 372-1190.

Click here for more information about appealing or applying for Social Security disability benefits. Or, contact an Allsup professional for a free SSDI evaluation at (800) 678-3276.

Allsup and its subsidiaries provide nationwide Social Security disability, veterans disability appeal, re-employment, exchange plan and Medicare services for individuals, their employers and insurance carriers. Allsup professionals deliver specialized services supporting people with disabilities and seniors so they may lead lives that are as financially secure and as healthy as possible. Founded in 1984, the company is based in Belleville, Illinois, near St. Louis. For more information, go to or visit Allsup on Facebook at

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