Social Security's COLA Calculation for 2024 May be Delayed Due to Potential Government Shutdown

It is anticipated that the Social Security Administration's announcement regarding the cost-of-living adjustment (COLA) calculation for 2024 will be delayed if a U.S. government shutdown occurs.

To determine next year's COLA, the Social Security Administration relies on September's consumer price index (CPI) data, which is scheduled to be released on October 12. However, in the event of a shutdown, the Bureau of Labor Statistics (BLS), responsible for releasing CPI data under the U.S. Labor Department, would cease its operations. As per the contingency plan, all 2,350 employees at the BLS would be furloughed during this period.

The ongoing disagreement between Republicans and Democrats over the country's spending is bringing the U.S. closer to a partial government shutdown. If a resolution is not reached by September 30, a shutdown will commence on October 1, forcing federal workers to either be furloughed or continue working without pay. Stay informed about Congress' actions and the potential shutdown live here.

If the shutdown persists, it could affect the expected announcement of the 2024 COLA by the Social Security Administration on October 12, as stated in the Labor Department's contingency plan available on the Office of Management and Budget's website.

The department's plan outlines, "A delay of the CPI release may have an impact on the COLA announcement by the Social Security Administration."

Medicare Open Enrollment Period Unaffected by Government Shutdown

Experts say the government shutdown will not impact Medicare’s upcoming open enrollment period, slated to begin on Oct. 15. However, beneficiaries may experience longer wait times to reach a customer service representative.

According to the Senior Citizens League, beneficiaries can expect a 3.2% increase from the Cost-of-Living Adjustment (COLA) next year. This would mean an additional $57.30 per month for retirees receiving the average monthly benefit of $1,790. It's worth noting that the 2023 COLA was substantially higher at around 9%.

While a government shutdown should not affect the distribution of checks to beneficiaries, the Social Security Administration has reassured the public that it will ensure accurate and timely payment of benefits during any lapse. In addition to payment distribution, the agency will continue appeals processes and critical IT support.

However, disability determination services could be negatively impacted in the event of a shutdown. As these services rely on state employees, the agency cannot enforce whether states choose to have their employees work without pay or be furloughed during a shutdown.