It’s official – the government announced today that there will be no benefit increase next year for millions of Social Security recipients, disabled veterans and federal retirees. From the Associated Press:

It's just the third time in 40 years that payments will remain flat. All three times have come since 2010.

The main reason for no increase next year is low gas prices.

By law, the annual cost-of-living adjustment, or COLA, is based on a government measure of inflation. The COLA is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, a broad measure of consumer prices generated by the Bureau of Labor Statistics.

The COLA is calculated by comparing consumer prices in July, August and September each year with prices in the same three months from the previous year. If prices go up, benefits go up. If prices drop or stay flat, benefits stay the same.

The CPI-W numbers for September were released Thursday, providing the last piece of the puzzle.

The September numbers show that gasoline prices are down by 30 percent from last year. Airfares have fallen by 5.9 percent and clothing prices are down by 1.3 percent.

But other prices are up. For example, medical care has risen by 2.4 percent, housing costs climbed by 3.2 percent and food prices were 1.6 percent higher.

The announcement will affect benefits for more than 70 million people, more than one-fifth of the nation's population.

Almost 60 million retirees, disabled workers, spouses and children get Social Security benefits. The average monthly Social Security payment is $1,224.

The COLA also affects benefits for about 4 million disabled veterans, 2.5 million federal retirees and their survivors, and more than 8 million people who get Supplemental Security Income, the disability program for the poor. Many people who get SSI also receive Social Security.

Congress enacted automatic increases for Social Security beneficiaries in 1975, when inflation was high and there was a lot of pressure to regularly raise benefits. Since then, increases have averaged 4 percent a year.

But in the past decade, the COLA has been that big only once. Advocates for seniors said years of small increases or no increase are eroding the buying power of benefits, regardless of the official inflation numbers.