Simple question. When gas prices went up, what effect did that have?
Social Security benefits increased.
However, the SSA keeps track of the CPI they use, from year to year. If it was something like:
2010: -1%
2011: -1%
2012: +3%
There would be no change in benefits in 2011, or 2012. But, in 2013, there would be only a 1% increase -- because those two years of decreases are subtracted.
The net effect is that SS beneficiaries got 2/3rd of the 3% increase in earlier years -- by not actually lowering them.
The article discusses some of the issues, but it turns out that energy prices are a significant part of the CPI calculation used by the SSA. So, a big drop in gas prices (and heating oil, natural gas, electricity, etc.) cancels out increases in groceries.
I think there's a good point to be made: medical expenses are a larger part of senior's budgets. The CPI calculation used by the SSA should account for that.