How the COLA Increase Affects Your Government Benefits
6 min read
Every year, millions of Americans wait to hear one number: the cost-of-living adjustment, or COLA. This annual increase, announced each fall, helps keep government benefits in line with inflation so your buying power doesn’t shrink when prices rise.
And like always, the 2026 COLA announcement will once again ripple through nearly every corner of the benefits system, from Social Security checks to veterans’ compensation to SNAP food assistance.
If you rely on one or more benefits, it’s important to know what changes you can expect and when they take effect. COLA isn’t just about Social Security—it affects a wide range of programs that many households depend on for stability.
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What is COLA?
COLA stands for “cost-of-living adjustment.” It’s a yearly percentage increase set by the federal government based on the Consumer Price Index (CPI-W), which tracks the cost of everyday goods and services. When inflation is high, COLA is usually higher. When inflation is low, the increase may be smaller — or occasionally, zero.
The adjustment is designed to make sure that benefits tied to COLA keep up with the rising costs of housing, groceries, utilities, and healthcare.
Which benefits are affected by COLA?
COLA isn’t limited to Social Security. Here’s a breakdown of the main programs where you’ll see changes:
Social Security Retirement and Disability (SSDI)
The most direct impact is on Social Security checks. Whether you’re retired or receiving disability (SSDI), your monthly payment will increase by the COLA percentage starting in January. This is often the most widely reported effect of COLA.
Supplemental Security Income (SSI)
SSI provides monthly support to low-income seniors and people with disabilities. COLA raises the federal benefit rate, meaning the maximum monthly SSI payment goes up. Many states that add their own supplemental payments also adjust those amounts.
Veterans’ Benefits
VA disability compensation, dependency and indemnity compensation (DIC), and certain other veterans’ benefits are directly tied to COLA. Congress typically passes a bill each year to align these benefits with the Social Security increase, ensuring veterans aren’t left behind.
Federal Civil Service and Military Retirement
Retired federal workers and military retirees also receive COLA increases in their pensions. The timing can vary depending on the retirement system (CSRS, FERS, or military retirement pay), but the adjustment is based on the same calculation.
Food and Nutrition Programs (SNAP, WIC)
SNAP (food stamps) adjusts benefit amounts every October using inflation measures, closely tied to COLA. This ensures that maximum allotments for food benefits increase to match rising grocery prices. WIC, which provides food and formula for women, infants, and children, also recalculates benefit values in line with inflation.
Medicare Premiums and Deductibles
Here’s a wrinkle: while COLA increases income, higher Social Security checks can sometimes be offset by rising Medicare Part B premiums. By law, most retirees can’t see their Social Security payment decrease because of Medicare costs (“hold harmless” provision), but the net increase can be smaller.
Medicaid and Other Income-Based Programs
Because COLA increases the official count of your monthly income, it can affect income-based eligibility for programs like Medicaid, housing assistance, or Supplemental Nutrition Programs. States sometimes update eligibility thresholds to keep pace, but in some cases, COLA increases can push recipients slightly over the cutoff line.
When does the COLA take effect?
October: The COLA announcement is released.
January: Social Security, SSDI, and SSI checks reflect the increase.
December/January: VA benefits adjust once Congress passes the aligning law.
October of the following year: SNAP benefits reset with updated maximums.
Why COLA matters for you
Even a small COLA increase can mean hundreds of extra dollars per year for beneficiaries. It helps offset rising costs and ensures critical benefits don’t fall behind the pace of inflation. But it also has ripple effects, sometimes raising premiums or nudging income past certain limits.
That’s why staying informed matters. Knowing how COLA affects your benefits can help you plan ahead, budget smarter, and make sure you’re still eligible for the programs you rely on.