Prior Cost-of-Living Adjustments
Most people are aware that there are annual increases in Social Security benefits to offset the effects of inflation on fixed incomes. These increases, now known as Cost-of-Living Adjustments (COLAs), are such an accepted feature of the program that it is difficult to imagine a time when there were no COLAs.
Before 1975, beneficiaries had to await a special act of Congress to receive a benefit increase.
Beginning in 1975, Social Security started automatic annual cost-of-living allowances. The change was enacted by legislation that ties COLAs to the annual increase in the Consumer Price Index (CPI-W).
The change means that inflation no longer drains value from Social Security benefits.
