If an agreement is not reached between the Republican Party and the Democratic Party regrading the spending bill, funding for the U.S. government will be halted and the country will be facing its first shutdown in almost seven years. If no agreement is reached by Wednesday and the shutdown goes into effect, a highly anticipated announcement from the Social Security Administration (SSA) that is expected to take place mid-October will face delays.
The announcement in question is the annual COLA, or Cost of Living Adjustment, announcement which reveals the amount by which all benefit checks will be increased in the new year. Individuals who are primarily or solely reliant on their monthly Social Security income can be considered vulnerable since they are living off of a fixed income. As such, any sort of delays or interruptions with these benefit payments can have severe repercussions. While a government shutdown does not impact the issuing of Social Security benefit checks to existing beneficiaries, other services will likely be stopped. Here is everything you need to know.
What is the COLA announcement?
The aim of the annual COLA is to allow for Social Security benefit checks to retain its buying power in the face of inflation. Prior to 1975, there had not been any set system to determine whether or not benefits required adjustment due to inflation and as a result, any increases were subject to Congressional approval and often occurred at random. As of 1975, however, the SSA began using a set formula to determine changes in inflation year over year and this became known as the COLA. The CPI-W for the third quarter of the current year is measured against the CPI-W of the third quarter of the previous, with the year over year increase becoming the next COLA.
In 2025, the COLA came in at a modest 2.5% and according to experts such as The Senior Citizen’s League, and Social Security analyst Mary Johnson, the 2026 COLA is estimated to come in at 2.7% or 2.8%. Relative to the average benefit check which is a little over the $2,000 mark, a 2.7% COLA bump will translate to around $54 more per month for retirees in the new year.
Since the COLA calculation requires the CPI-W data for the third quarter (July, August, and September), the SSA can only make the official announcement for the next COLA during October of each year. The required data is published by the Bureau of Labor Statistic on a monthly basis, and the September data was expected to be released on the morning of October 15th. Now, however, due to the possibility of a government shutdown, this may be delayed.
How will the government shutdown affect the COLA announcement?
As noted above, if an agreement regarding the spending bill is not reached, funding to the government will be cut off and a shutdown will be enacted. If this occurs, the COLA announcement, along with other important reports such as the monthly unemployment numbers, will all be faced with delays. This delay will occur due to the Bureau of Labor Statistics halting all operations as a result of the shutdown.
“The Bureau of Labor Statistics would stop operating in the event of a government shutdown — all active data collection would cease,” the Department of Labor stated in a Monday press release. The Department of Labor oversees the Bureau of Labor Statistics, which in turn releases the monthly CPI data use to calculate the COLA. As such, if the relevant CPI data is not released as it usually is on a monthly basis, the SSA will not be able to calculate the COLA for 2026, and as a result, the announcement will be delayed.
“A delay of the CPI release during October of each year might have an impact on the Cost of Living Adjustment announcement by the Social Security Administration,” the Department of Labor noted.
In addition to the COLA announcement potentially being pushed back, if a shutdown occurs, benefit verification and the issuing of new cards will also be halted. Existing beneficiaries will still continue to receive their benefit checks, however.