Social Security 3.6% Cost of Living Increase Takes Effect December 2026

The Social Security Administration (SSA) filed a notice for public inspection on October 23, 2026 announcing a 3.6 percent cost of living increase in Social Security benefits, effective December 2026. The notice is scheduled for publication in the Federal Register on October 26, 2026.

Monthly Social Security benefits rise for December 2026 benefits payable in January 2027. Federal Supplemental Security Income (SSI) payments rise for January 2027 payments, which are paid on December 31, 2026. The notice also sets the 2027 wage base, earnings limits and benefit formulas.

What the 2027 Cost of Living Increase Changes

The 3.6 percent increase applies to monthly retirement, survivor and disability benefits under title II of the Social Security Act and to federal SSI payments under title XVI. SSA based the figure on the rise in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from the third quarter of 2025 to the third quarter of 2026.

The maximum federal SSI monthly payment rises from $994 to $1,029 for an eligible individual and from $1,491 to $1,544 for an eligible individual with an eligible spouse. The amount for an essential person rises from $498 to $516.

Several other amounts tied to the increase also change for 2027:

• The SSI student earned income exclusion rises from $2,410 to $2,500 per month, with a yearly cap of $10,080, up from $9,730.

• The fee limit for organizations that charge for representative payee services rises from $57 to $59 per month, or from $106 to $110 for certain beneficiaries with a disability and an alcoholism or drug addiction condition who cannot manage their benefits.

• The cap on the user fee SSA charges when it pays representative and attorney fees directly from past-due benefits rises to $128, starting in December 2026.

Wage Base and Earnings Limits for 2027

SSA set the national average wage index for 2025 at $72,800.33. Several 2027 amounts follow from that index.

The maximum earnings subject to Social Security tax rises from $184,500 to $192,300. The new base applies to wages paid in 2027 and to self-employment income earned in tax years beginning in 2027. Workers need $1,970 in earnings to receive credit for one quarter of coverage.

Under the retirement earnings test, beneficiaries below full retirement age may earn $2,130 a month, or $25,560 a year, before SSA withholds $1 for every $2 above the limit. That limit was $2,040 a month in 2026.

For beneficiaries reaching full retirement age in 2027, the limit rises from $5,430 to $5,660 a month, or $67,920 a year, with $1 withheld for every $3 above it. The substantial gainful activity amount for people with disabilities is $1,770 a month in 2027, or $2,950 for people who are statutorily blind. A month counts toward a trial work period when earnings exceed $1,270.

Legal Authority Behind the Annual Notice

Section 215(i) of the Social Security Act provides for an automatic benefit increase when the average CPI-W for the third quarter exceeds the average for the last computation quarter. The law limits the increase to wage growth if the trust fund ratio falls below 20 percent. SSA reported a 2026 fund ratio of 151.3 percent, so that limit does not apply.

Section 1617 of the Act applies the same percentage increase to federal SSI payment rates. The Act also requires SSA to publish the wage index, the contribution and benefit base, the earnings test amounts and the benefit formulas for the coming year by November 1.

Implications for Beneficiaries, Workers and Representatives

Retirees, survivors and disability beneficiaries see the increase in payments starting in January 2027. SSI recipients see it in the payment issued on December 31, 2026. Beneficiaries in Melbourne, Palm Bay and across Brevard County receive the new amounts on the same schedule as recipients nationwide.

Higher earners and self-employed individuals pay Social Security tax on a larger share of income in 2027.

Organizations that collect fees as representative payees are subject to the new monthly fee limits. Attorneys and other claimant representatives paid directly from past-due benefits are subject to the $128 user fee cap beginning in December 2026.