VA Cost of Living Adjustment 2019
On December 31st, 2018, both veterans receiving VA disability compensation or pension, military retirement, or their loved ones who receive dependency indemnity compensation received a 2.8% cost-of-living raise in relation to what is known as CPI.
What’s the scoop regarding cost of living adjustments – COLAs?
A cost-of-living adjustment is an increase of income so that the recipient can keep up with increasing basic living costs in relation to this “thing” called the CPI.
What is the CPI? The Department of Labor’s (DOL) Bureau of Labor Statistics (BLS) tracks the Consumer Price Index (CPI).
To put that into perspective for You
Every Veteran’s individual benefit amount is dependent on their own very personal circumstances. Many of us who receive VA compensation, pension, DIC, or military retirement benefits may know what our monthly benefit amount is, but many of us may not know. Click HERE for the VA’s site to help you identify what your monthly amount should be depending on your circumstances (for instance, rating % for disability, dependent status, etc.).
Will this increase affect my taxes?
Again, each individual’s circumstances are different. It may be in your best interest to seek professional guidance for your tax questions. However, there are some general guidelines provided here to address this issue.
As a general rule, disability compensation and pension benefits paid to a Veteran or their families are excluded from federal taxable income; military retirement based on disability is also excluded from federal taxable income (if the Veteran meets certain criteria – click HERE to see criteria). DIC benefits are tax-free as well.
However, military retirement based on age or length of service is taxable income.
It is worthwhile to note that there are special tax considerations for Veterans, including possible refunds after a Veteran receives a determination of a service-connected disability. Click HERE for the IRS explanation.
Do I have to apply for this cost of living adjustment or fill-out any additional forms for future adjustments?
No. Cost of living adjustments do not require any additional application from benefit recipients. You do not need to request or apply for them. Although an increase certainly does not happen every year, if an increase is determined, benefit recipients will automatically receive it. Finally, if you feel you are deserving of a higher rating for your VA disability, please talk to us!
