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Howard Kossover: Social Security benefits did not originally include cost-of-living adjustment

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Q: Did Social Security always have a COLA?

A: With the 1.5 percent cost-of-living adjustment (COLA) about to begin, it is worth noting that many pensions do not have any cost-of-living adjustment (COLA) provision.

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Unlike the inflation protection provided by Social Security retirement, survivors and disability benefits, for pensions lacking a COLA mechanism your starting amount is your final amount, even if you receive the pension for many years.

One of the many valuable aspects of Social Security benefits, the annual, automatic review of Social Security amounts for a possible cost-of-living adjustment (COLA) is now such an accepted feature of the program that it is difficult to imagine a time when there were no COLAs.

However, such a time existed.

Social Security beneficiaries did not originally receive cost-of-living adjustments.

Although the first SSA benefit was paid in January 1940, the first COLA related increase was received in October 1950 followed by a second in 1952.

Part of the 1950 Amendments, the first Social Security COLA was signed into law by President Truman.

Neither of these two increases was automatic.

Both times, Congress enacted special legislation for the purpose.

The first automatic Social Security COLAs began in 1975, based on 1972 legislation.

Signed into law by President Nixon, the 1972 legislation provided for a special COLA effective September 1972 and, beginning in 1975, established the process for issuing automatic COLAs based on the annual increase in the consumer price index, if any.

Since 1975, the automatic cost-of-living adjustment has increased Social Security benefits in every year except 2010 and 2011. Learn COLA percentages for 1975-2014 at www.socialsecurity.gov/cola/automatic-cola.htm.

The 2014 cost-of-living adjustment begins with benefits that more than 57 million Social Security beneficiaries receive in January 2014.

Increased payments to more than 8 million Supplemental Security Income (SSI) beneficiaries will begin on Dec. 31.

Based in Grand Forks, Howard I. Kossover is the Social Security Public Affairs Specialist for North Dakota and western Minnesota. Send general interest questions to him at howard.kossover@ssa.gov. Read his online articles at socialsecurityinfo.areavoices.com.

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