VA Disability and Retirement Benefits to Increase 3.6% in 2027

Veterans in the United States receiving disability and retirement benefits will experience a 3.6% increase starting December 1, 2026. This adjustment will amount to an additional $36 per month for every $1,000 in benefits received, according to reports. The increase is tied to the Social Security Administration's announcement of its largest annual cost-of-living adjustment (COLA) in years for 2027.

The adjustment, based on September inflation data showing a 3.7% CPI increase, will likely be reflected in veteran's payments by late December 2026 or early January 2027. While welcomed, financial planners suggest the increase may not fully cover the rising costs of civilian life, such as mortgages and family expenses, for many younger military retirees.

Experts note that the net effect of the COLA may be more significant for veterans. Since their benefits are tax-free, they will not pay income tax on the increase. Additionally, their Medicare premiums are not expected to rise in tandem with the COLA, unlike for other Social Security recipients. Over 8 million veterans in the U.S. currently receive these benefits.

Unlike automatic annual adjustments for military pensions and Social Security payments, increases to VA disability benefits are subject to the Veterans’ Compensation Cost-of-Living Adjustment Act, requiring congressional approval and the president's signature.