For the first time in five years social security recepients are not going to receive an increase in their benefits.
Social Security is adjusted each year based on the rate of inflation, known as the cost of living adjustment, or COLA. The adjustment is set every October based on the September inflation report.
The inflation measure used by the Social Security Administration was down 0.3% for the 12 months that ended in August.
The reason for the decrease? A 23% drop in gas prices.
Social Security benefits rose 1.7% in 2015 and has climbed by less than 2% for the last three years in a row.
A similar freeze on benefits also occurred in 2010 and 2011.
“It’s very likely the COLA will be zero, given the way the numbers are now,” Polina Vlasenko, senior research fellow at the American Institute for Economic Research, told CNNMoney.
A recently study by the Senior Citizens League found that Social Security benefits discovered that senior citizens have lost 22% of their buying power since 2000, despite the benefit increases due to the COLA.
Last year senior citizens received a monthly increase of $22. The average benefit pay is $1,300.
While gas prices affect their yearly increase, senior citizens are less likely to drive, which means the lack of a social security increase only managed to decrease spending power.