Social Security Matters – Why Don’t I Get Annual Cost Of Living Adjustments (COLA)?

By Russell Gloor, AMAC Certified Social Security Advisor

Dear Rusty: I get a NET amount of $210 from Social Security plus get an alimony check of $1,400. Other people I know get a COLA increase every year, but I was told I am not eligible? But no reason was given. Why am I not eligible? Signed: Struggling Senior

Dear Struggling Senior: Everyone who collects Social Security receives the annual Cost of Living Adjustment (COLA), so whoever told you that you aren’t eligible for a COLA increase was incorrect. However, keep in mind that COLA is applied to your gross Social Security payment, not your net payment. One thing which can happen, especially to those whose Social Security payment is small, is that an increase to the Medicare Part B premium may consume your COLA increase. Here’s an example of how that might occur: 

You say your NET Social Security amount is $210. Assuming you are enrolled in Medicare, your gross Social Security payment (before the Medicare Part B premium is deducted) is probably about $380. The COLA increase for 2022 was 5.9%, which would increase your gross Social Security payment from about $380 to about $402, an increase of about $22. However, the 2022 Medicare Part B premium also increased by nearly $22 and, since your Medicare premium is deducted from your Social Security benefit, your NET Social Security payment wouldn’t change. I suspect this is why you didn’t see the Cost of Living Adjustment in your Social Security payment – an increase to your Medicare Part B premium most likely offset all of your COLA increase. 

I know (and agree) this seems unfair, but inflation has also affected healthcare costs in general and Medicare premiums in particular, and a Medicare premium increase unfortunately offsets at least some of, and sometimes all of, the annual COLA received by all Social Security beneficiaries. I suspect the above, or some variation of it, is why you are not seeing a COLA increase in your net Social Security payment. Rest assured, however, that you ARE receiving an annual COLA increase to your gross Social Security amount – every recipient of Social Security receives each COLA increase granted.

This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained, and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/programs/social-security-advisory) or email us at ssadvisor@amacfoundation.org.