The purpose of the Cost of Living Adjustment (COLA) is to ensure, as much as possible, that the value of compensation benefits paid under the Virginia Workers’ Compensation Act does not diminish due to inflation. COLA rates change yearly and are effective October 1 of each year.
The combined compensation rate and Social Security disability benefit may affect a claimant’s entitlement to COLA. The combined weekly compensation rate and weekly Social Security disability benefit cannot exceed 80% of claimant’s established pre-injury average weekly wage. The net Social Security earnings, after deducting monthly Medicare payments, should be used when performing these calculations. Social Security retirement benefits do not affect a claimant’s entitlement to COLA.
A yearly cost of living adjustment is not self-executing therefore, a specific claim for COLA must be filed each year together with a statement from the Social Security Administration as to current SSD status.