Each October brings with it the announcement that reveals exactly how much Social Security benefits will be increased by in the new year. This is called the Cost of Living Adjustment, or COLA, and it is an increase implemented across all benefit amounts in order to counter the effects of year over year inflation. The COLA is calculated using CPI data for the third quarter of the year in particular, and as such, the Social Security Administration (SSA) is only able to make the official announcement in October once the relevant data has been released by the Bureau of Labor Statistics.
This year, however, it appears that the official COLA announcement will face delays due to the federal government shutdown that is currently in effect. The Bureau of Labor Statistics was previously scheduled to release the September data needed for the COLA calculation on October 15th. Now, however, due to the shutdown, the Department of Labor has ceased operations, which means that the release of the September data will also face delays. Here is everything you need to know.
Government shutdown delays COLA announcement
Members of Congress could not come to an agreement regarding the healthcare spending bill on Tuesday. In order for a bill to be passed, 60 votes are required, however, both the Republican Party and the Democratic Party were unable to collect the sufficient number of votes to have their proposed bill passed. Neither party was willing to compromise and as a result of the deadlock, the U.S. federal government has been shut down as of Wednesday, October 1st.
During a government shutdown, all federal agencies who are funded by discretionary spending will cease operations and furlough its staff, and this is precisely the case for the Bureau of Labor Statistics. On Monday prior to the shutdown, the Department of Labor stated the following in a release, “The Bureau of Labor Statistics would stop operating in the event of a government shutdown — all active data collection would cease.”
Now that the shutdown has come to pass, the Bureau of Labor Statistics has furloughed 2,054 of its total 2,055 employees. The Bureau of Labor Statistics was previously scheduled to release the September CPI data on October 15th, however, due to the furloughing of its staff, the data is not currently being processed and “will likely be delayed if the lapse is prolonged.”
The last time the COLA announcement was delayed was in 2013 during another government shutdown. The 2013 shutdown began on October 1st, with the COLA announcement scheduled for October 16th. The shutdown lasted for 16 days, and as a result, the COLA announcement was moved to October 30th.
2026 COLA expectations
Based on the available July and August CPI data, the Senior Citizen’s League has projected a COLA of 2.7% for 2026. It is also worth noting that since the shutdown began in October, the September data will have already been collected so there will not likely be any major surprises in that regard.
“A government shut down could potentially delay an announcement of the COLA, but remember, the data is for September and that has already been collected,” explained independent Social Security and Medicare policy analyst Mary Johnson. “So the data shouldn’t be skewed.”
Relative to the average benefit check, retirees should, in theory, see around $54 more in their checks next year, assuming the 2.7% estimate is correct. In reality, many retirees may only see around $33 more in their checks next year even if the COLA comes in at 2.7%. This is because the Medicare Part B premium is projected to increase by almost 12% in 2026 according to the Medicare Trustees’ report.
If the Part B premium — which is automatically deducted from benefit checks — increases by the projected 11.6%, the premium cost will rise from $185 to 206.50. When the premium hike and the average $54 COLA increase offset each other, the average retiree will only see around $33 more in their benefit checks in 2026.
“A jump of $21.50 would be very close to setting the record for the highest premium jump in terms of dollars, in program history, which was $21.60 per month set in 2022,” Johnson stated. “I can report that the stress and anger levels of my older friends, neighbors and new acquaintances is very high and Medicare costs are a top concern.”