The cost-of-living adjustment (COLA) for September 2016 through August 2017 benefit payments is 1.0%, and will begin with the September 30, 2016 payment.
An eligible retired member with an annual benefit of $18,000 or more will receive a maximum increase of $15 per month beginning with the September 2016 payment. Eligible members receiving an annual benefit under $18,000 will receive a lesser monthly increase, and the average is $5 per month.
COLA and Medicare Part B
With an expected increase in Medicare Part B premiums for 2017, Social Security recipients will likely see that the average $5/month COLA will be offset by a matching increase in Medicare premiums. Provisions of Federal Law guarantee that beneficiaries won't get a reduction in Social Security payments when Medicare premiums go up. That means when there is no COLA there cannot be an increase in Part B premiums for those protected by the law (including people who have previously enrolled in Medicare and have their Part B premium deducted from their Social Security checks and do not face the high earner premium; this is about 70% of Social Security beneficiaries.) When there IS a COLA, like announced for 2017, there CAN be an increase in monthly Part B premiums, however, the dollar increase in Medicare premiums must be limited to the dollar increase in Social Security.
Those New Yorkers who do not yet receive Social Security payments, but do pay a Medicare premium, will likely see an increase in their Part B premium beyond the average $5 cost to those who are protected (or "held harmless") by the law described above. Those who newly enroll in Medicare in 2017 will likely see a monthly premium higher than in place for those enrolled in prior years.
If you want to read more, this link provides a connection a very thorough fact sheet on the topic by our colleagues at Social Security Works.
COLA Facts
New York's permanent, automatic COLA is designed to help offset inflation's adverse effects on the fixed retirement benefits of the state's public retirees. By law, the COLA is calculated by taking 50% of the March-to-March Consumer Price Index increase (rounded up to the next higher one-tenth of 1%) and multiplying it by the first $18,000 of the retirement benefit. The CPI increased from March 2015 to March 2016 (.85%). Since the cost-of-living adjustment percentage cannot be less than 1.0% or exceed 3.0%, the percentage increase will be 1.0%.
COLA Eligibility
To be eligible for a COLA, you must either be:
- At least age 62 and retired at least five years; or,
- At least age 55 and retired at least 10 years; or,
- A retiree receiving a NYSTRS disability benefit for at least five years (regardless of age); or,
- A surviving spouse of an eligible retiree receiving a lifetime benefit. (By law, the spouse receives an increase equal to one-half the COLA the retiree would have received.)
Retirees who become eligible for the COLA after September will receive their adjustment when first eligible.
Need Help?
The NY StateWide Senior Action Council knows that many older residents are living on the edge of poverty and the prescribed Social Security COLA is woefully inadequate to meet their needs. They continue to advocate for federal legislation that will provide a boost in Social Security payments as well as a change in the formula used to calculate a COLA to more accurately reflect costs facing older reisdents. Additionally, they will continue to seek Congressional relief for those who face a sharp, unaffordable increase in Medicare premiums that are not "held harmless."
If you are ocncerned about the cost of your Medicare premium, please call the NY StateWide Senior Action Council to see if there are any benefit programs that can help you. Their counselors are available throughout the year at 1-800-333-4374.