cola being poured into a glassCOLA- It’s Not a Drink

You may have heard the term COLA mentioned recently in regards to Social Security disability payments. You may not understand exactly what it is or how it affects you. Let’s take a look at it.


What is COLA

“COLA” is an acronym for Cost of Living Adjustment. The term refers to the yearly adjustment made to the pay given to Social Security recipients. It is based on several economic factors that affect your cost of living. In other words, as certain product prices increase or decrease the amount Social Security pays to you may increase or remain unchanged.

What Affects COLA

The government uses the Consumer Price Index to determine if our cost of living has increased or decreased each quarter of each year. Hundreds of product prices are used in 200 categories in order to try to get an accurate picture. Also included in the Index are sales taxes, water and sewerage charges and vehicle registration fees.

Some of the main categories are food (including chicken, milk, breakfast cereals), housing (rent cost as well as heating oil), clothing, transportation costs (gas, vehicle prices, insurance), medical care costs, recreation (pet products, sports equipment, event admission costs, televisions), education and communication (college tuition, postage, telephone services, computer software and accessories), and other goods and services (haircuts, personal and funeral expenses). As you can see these categories touch almost every aspect of our lives in order to give a pretty clear picture of what it costs the average person to live in the United States.


By looking at an exhaustive cross section of our lives the government can tell if our cost of living has decreased or increased. Social Security’s COLA (Cost of Living Adjustment) is then determined based on if the Index indicates life is more or less expensive to live.

2016 COLA

In 2016 Social Security recipients did not get an increase in their monthly pay during 2016 because the Index actually indicated it cost less to live in 2015 than it did in 2014.

Major Factors

One of the major factors in the cost of living decrease was oil price. Since oil is used in the manufacturing of thousands of products, many of those product prices also decreased. In addition we all saw gas prices significantly decrease which also led to some decreases in the cost of transporting products to stores which was further reflected in lower prices of some important products. Lower fuel prices also allowed us to drive our cars at significantly lower cost over the previous year and heat our homes more cheaply. All told, these lower costs outweighed many of the price increases we also experienced such as medical costs and the requirement to purchase medical insurance.

No Pay Raise

There’s no arguing that we all love pay raises. However, since the government has tied Social Security pay raises to our cost of living, the option is out this year. We can count our blessings that the Administration did not lower our pay this year instead!



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Recognized as one of the nation’s premier law firms, The Cochran Firm handles cases on behalf of clients seeking a Personal Injury Lawyer, Criminal Defense, Medical Malpractice, Bankruptcy Attorney in Atlanta or Social Security Disability Lawyer.The Firm can be reached at 1-800-THE-FIRM (1-800-843-3476) or fill out the form on this page. “Working for You.” Article by Benjamin A. Irwin, Esq.

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