Veterans receiving disability compensation from the Department of Veterans Affairs (VA) are facing mixed news as 2026 approaches. While a cost-of-living adjustment (COLA) is expected, early forecasts indicate the smallest increase in six years—offering limited financial relief for those who rely on these benefits.
A Modest Increase After Years of High Adjustments
After experiencing historic COLA hikes in recent years—8.7% in 2023 and 5.9% in 2022—the 2026 projection stands at a modest 2.3%. This estimate comes from both the Military Officers Association of America (MOAA) and The Senior Citizens League, organizations that closely monitor inflation trends and federal benefit adjustments. The forecasted increase also falls short of the 2.5% adjustment granted in 2025.
While any increase is better than none, the 2.3% projection may feel underwhelming for veterans who have seen costs rise steadily across the board, from housing and groceries to healthcare and transportation.
When Will the 2026 COLA Take Effect?
If the projected adjustment holds true, the new COLA rate will take effect on December 1, 2025. However, veterans won’t see the impact in their bank accounts until January 1, 2026, when payments reflecting the new rate begin.
Understanding How COLA Is Calculated
The annual COLA is determined by the Social Security Administration (SSA), using data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). Specifically, the SSA looks at changes in the CPI-W during the third quarter (July through September) of each year to determine how much benefits should be adjusted for inflation.
This method aims to ensure that benefits maintain their purchasing power as the cost of living rises. However, the CPI-W may not fully reflect the inflationary pressures that veterans and seniors experience, especially in healthcare and housing.
Official Announcement Coming in October 2025
While current estimates offer a helpful preview, the official COLA for 2026 won’t be announced until October 2025, once the final CPI-W data for the third quarter becomes available. At that point, the SSA will confirm the adjustment that will apply not only to VA disability benefits but also to Social Security and other federal pensions.
What This Means for Veterans
For veterans depending on monthly disability payments, the smaller projected COLA increase could pose financial challenges, especially if inflation continues to affect essential expenses. Though still an increase, 2.3% may not go far enough to keep up with real-world cost pressures.
Advocates and veterans’ organizations will likely continue to monitor inflation trends and lobby for fairer adjustments that better reflect the needs of disabled veterans.
