With the constant increase in the cost of living, there is a high chance that the VA benefits will increase come 2025, which will be a result of the COLA increase. Learn how much a VA can benefit from this increase in 2025.
Understanding COLA and Its Impact on VA Benefits
There is positive news for VAs who are receiving disability benefits from the Department of Veteran Affairs (VA) in 2025. Annually, the Veteran Affairs benefits are readjusted so they fit into the newly calculated cost of living for the year.
This adjustment is adjusted using the COLA, which stands for Cost of Living Adjustment, This program is specially designed to help Americans keep up with the inflation rates.
What’s more? This COLA is specifically determined by the Social Security Administration (SSA), and this has a direct effect on the amount of compensation you will be receiving as a veteran at the end of the month. However, some experts have predicted an increase in COLA in 2025 which, in other words, will lead to a significant boost in VA benefits.
What Is COLA and Why Does It Matter?
You might be wondering, “What does Cost of Living Adjustment mean?” Well, in simple terms, this refers to an annual change to the benefits that are targeted at ensuring that the purchasing power of fixed income can keep up with the current level of inflation.
Inflation, on the other hand, refers to the constant increase in the price of goods and services over a given period. This can reduce the value of fixed payments such as the VA ability benefits. To counteract this, the SSA calculates the COLA based on the customer price index for Urban Wage Earners and Clerical Workers (CPI-W).
Furthermore, if the CPI-W rises, then the benefits will have to increase, and if the CPI-W falls, the benefits could remain untouched or unchanged. In some cases, it might be growing at a slow rate.
Some experts have suggested estimates of the COLA to increase from around 3.1% to about 3.5%, which also reflects the ongoing inflationary pressures. Moreover, this will also mark a continuous trend that has been occurring in recent years, where higher inflation will directly lead to a more substantial COLA increase.
How Much Will VA Benefits Increase in 2025?
Although the final COLA will not be announced until October 2024. The projected increase in COLA will see an increase in veteran monthly compensations. Furthermore, veterans with high disability ratings are bound to see even higher disability benefits.
In such a case, a veteran with a 100% disability rating as well as a dependency could see a huge to about $100 per month. However, this solely depends on the final COLA rating. One key note is that over the year, this constant increase will add up to several hundred dollars, which will ultimately provide additional relief for veterans and their families.
