From January 1, disabled veterans receiving disability compensation from the Department of Veterans Affairs will see a 2.5% increase in their monthly payments. Essentially, what this simply does is maintain the fact that for this year, veterans do not see any purchasing power erased with the escalation of normal daily living standards and necessities as their received pay compensations.
2025 COLA increase
The SSA said the 2025 COLA was 2.5%, compared to a 3.2% adjustment in 2024 and an 8.7% jump in 2023. The COLA has fallen from last year, but the 2025 adjustment is within a fraction of the average COLA of about 2.6% for the decade. The COLA is tied to the Consumer Price Index, a measure of the rate of change in prices for goods and services. An increased CPI represents periods of inflation, which thus automatically triggers an increase in benefits to sustain the beneficiaries’ level of living.
Effects on VA disability compensation rates
The COLA of 2.5% will amount to the following increases in the rates of VA disability compensation, depending on the rate of disability and the dependency of the veteran. The following reflect new monthly payment amounts starting on December 1, 2024:
- 10% Disability Rating: Veterans will get $175.51 a month, up from about $4.28 from last year.
- 20% Disability Rating: Compensation will increase to $346.95 a month, up from about $8.47.
- For veterans rated between 30% and 100%, the rates vary according to the number of dependants: spouse, children, and parents.
For instance, a veteran who has a disability rating of 30%, is considered married but has no children or dependent parents would have received a $601.42 monthly compensation rate.
For those considered to have a 100% disability rating and does not have any dependants increased his compensation by about $ 93.45 every month resulting in a total of 3,621.95 dollars as compensation per month.
Special monthly compensation rate
Special Monthly Compensation is an additional tax-free benefit for veterans due to such special circumstances as the need for aid and attendance by another person, or specific disabilities, including loss of use of a limb. SMC rates are also increased by 2.5%.
Adjustments for military retirees and survivors
Military retirees also will receive the 2.5% COLA. They’ll see the increase in their Dec. 31, 2024 payment; annuitants, in their Jan. 2, 2025 payment.
Survivors receiving Survivor Benefit Plan, or SBP, also get increases to their payments matching the same amount as for retirees.
Additional considerations
Veterans who retired in 2024 will see a somewhat reduced COLA in 2025. Their COLA is prorated based on which quarter they retired in. It might also be adjusted based on what year a member entered the service and what retirement plan they elected.
