[Update - 21 October 2011]
The US Senate has passed the Veterans Compensation Cost-Of-Living Act of 2011 which is another step forward to an increase COLA for disabled vets. There is still some hurdles to get through until it makes it to the White House, but it seems to be on track to possible be approved before December 1st 2011. Updates to follow over the coming weeks.
[Update - 19 October 2011]
News continues to spread of the cost of living allowance increase for 2012. But the potential for a higher inflation index could mean workers will pay more into the social security system. For social security recipients, this increase is the first since the 5.8% increase in 2009. The money required for people to successfully function in today’s society has increased dramatically over they past 10 years.
The employed community doesn’t always feel the effects of inflation because employers will gradually increase wages over time. Those living off any form of COLA are left unprepared when the cost of goods increase, but the money they receive does not. Seniors dealing with medicare costs or senior citizen life insurance may be able to breathe easier over the next year.
Though the COLA increase is good news, it is also possible the rates will not increase over the next few years due to the governments debt reduction plans.
There is no current legislation to prevent COLA increases.
[Previous - 11 October 2011]
There could be some good news for those receiving cost-of-living adjustments for military retirement pay, VA compensation and pension, and Social Security benefits. There has been a change in the inflation rate according to the Military Officers Association of America. This inflation rate rose .3% in August. There has been a steady increase in inflation rates over the past couple of months, which may mean a possible increase in the COLA rates in 2012. Currently, that projected increase will be 3.7% which will most likely start in January.
The COLA has not increased in the past 2 years. There is, however, a proposal to change the basis for COLA. By adopting the Chain Consumer Price Index for All Urban Consumers would have the potential of lowering the COLA by .3%. This would equal out to a 2012 COLA rate closer to 3.4%
There is a concern among many individuals that this increase to the cost of living allowance will just mean higher rates on various products and services making the point moot. But, it is unlikely that the change to the cost-of-living allowance rates will mean an immediate change of the price of goods and services.
With any increases in military pay and benefits, there is usually a large gap of time between being informed of the change, and change occurring.