The official rate for the VA Disability COLA was announced October 12th, 2023.
Every year, veterans eagerly await announcements on the VA disability benefits, keenly aware of the pivotal role these adjustments play in ensuring their well-being.
These benefits not only recognize the sacrifices made by our service members but also ensure that inflation doesn’t diminish their value.
This year, we’re looking at some key changes that are set to shape the financial landscape for veterans in 2024.
What’s the new rate announced on October 12th? Let’s find out.
Starting in January, Veterans will see a 3.2% increase in their monthly VA benefits for 2024.
This change is influenced by the latest cost-of-living adjustment (COLA) announced by the social security administration. To keep things clear:
- Confirmation Date: The official rate increase was confirmed on October 12, 2023.
- Finalization Date: While the rate is announced, it will be finalized on December 1, 2023. As always, it’s vital to keep an eye on these announcements as they can influence financial planning for the coming year.
- Stay Tuned: We understand the importance of staying updated. That’s why we’ll be revisiting this topic and providing a detailed update on December 1 with the finalized data. So, bookmark this page and set a reminder!
2024 VA Compensation Increases from 3.2% COLA Adjustment
| Percentage | Rate |
|---|---|
| 10% | $171.23 |
| 20% (No Dependents) | $338.49 |
- For a 10% disability rate, the increase is approximately $5.33 ($171.23 – ($171.23/1.032)), resulting in a jump from $165.90 in 2023 to $171.23 in 2024.
- For a 20% disability rate, the raise is about $10.56, moving the amount from $327.93 in 2023 to $338.49 in 2024.
| Dependent Status | 30% | 40% | 50% | 60% |
|---|---|---|---|---|
| Veteran Alone | $524.31 | $755.28 | $1,075.16 | $1,361.88 |
| Veteran with Spouse Only | $586.23 | $837.84 | $1,178.37 | $1,486.75 |
| Veteran with Spouse & One Parent | $635.76 | $903.89 | $1,261.95 | $1,586.85 |
| Veteran with Spouse and Two Parents | $685.30 | $969.94 | $1,345.54 | $1,686.96 |
| Veteran with One Parent | $573.84 | $821.33 | $1,158.75 | $1,461.98 |
| Veteran with Two Parents | $623.38 | $887.38 | $1,242.34 | $1,562.09 |
| Additional for A/A spouse | $57.79 | $76.37 | $95.98 | $114.55 |
- Veterans at a 30% disability rate without dependents saw an increase of about $16.40, with their monthly compensation going from $507.91 to $524.31.
- At the higher end, veterans at a 60% disability rate with a spouse and two parents had their compensation increased by roughly $52.55, with the monthly amount moving from $1,634.41 to $1,686.96.
| Dependent Status | 70% | 80% | 90% | 100% |
|---|---|---|---|---|
| Veteran Alone | $1,716.28 | $1,995.01 | $2,241.91 | $3,737.85 |
| Veteran with Spouse Only | $1,861.79 | $2,161.16 | $2,428.70 | $3,946.25 |
| Veteran with Spouse and One Parent | $1,978.41 | $2,294.29 | $2,578.34 | $4,113.51 |
| Veteran with Spouse and Two Parents | $2,095.02 | $2,428.45 | $2,727.98 | $4,280.77 |
| Veteran with One Parent | $1,832.89 | $2,128.14 | $2,391.55 | $3,905.11 |
| Veteran with Two Parents | $1,949.51 | $2,261.27 | $2,541.19 | $4,072.36 |
| Additional for A/A spouse | $134.16 | $152.74 | $172.34 | $191.14 |
- A veteran alone at a 70% disability rate saw their compensation rise by around $53.38, increasing from $1,662.90 in 2023 to $1,716.28 in 2024.
- For a 100% disabled veteran with a spouse and two parents, the hike was substantial: approximately $132.68, marking a growth from $4,148.09 in 2023 to $4,280.77 in 2024.
| Dependent Status | 30% | 40% | 50% | 60% |
|---|---|---|---|---|
| Veteran with Child Only | $565.59 | $811.01 | $1,144.30 | $1,445.47 |
| Veteran with Spouse and Child | $631.64 | $898.73 | $1,254.73 | $1,577.57 |
| Veteran with Spouse, One Parent and Child | $681.17 | $964.78 | $1,338.32 | $1,677.67 |
| Veteran with Spouse, Two Parents and Child | $730.71 | $1,030.82 | $1,421.91 | $1,777.77 |
| Veteran with One Parent and Child | $615.12 | $877.06 | $1,227.89 | $1,545.57 |
| Veteran with Two Parents and Child | $664.66 | $943.10 | $1,311.49 | $1,645.68 |
| Add for Each Additional Child Under Age 18 | $30.96 | $41.28 | $51.60 | $61.92 |
| Each Additional Schoolchild Over Age 18 | $100.10 | $133.13 | $167.18 | $200.21 |
| Additional for A/A spouse | $57.79 | $76.37 | $95.98 | $114.55 |
- A veteran with a child only at a 30% disability rate received an uplift of about $17.58, with the monthly payout moving from $547.01 to $565.59.
- A veteran with a spouse, two parents, and a child at a 60% disability rate saw an increase of approximately $55.30, going from $1,722.47 in 2023 to $1,777.77 in 2024.
| Dependent Status | 70% | 80% | 90% | 100% |
|---|---|---|---|---|
| Veteran with one Child (no spouse and no parents) | $1,813.29 | $2,106.47 | $2,366.78 | $3,877.22 |
| Veteran with Spouse and Child (no parents) | $1,968.09 | $2,282.94 | $2,565.95 | $4,098.88 |
| Veteran with Spouse, One Parent and One Child | $2,084.70 | $2,416.07 | $2,715.59 | $4,266.13 |
| Veteran with Spouse, Two Parents and Child | $2,201.32 | $2,549.19 | $2,865.23 | $4,433.39 |
| Veteran with One Parent and Child | $1,929.90 | $2,239.59 | $2,516.42 | $4,044.48 |
| Veteran with Two Parents and Child | $2,046.52 | $2,372.72 | $2,666.06 | $4,211.74 |
| Add for Each Additional Child Under Age 18 | $72.24 | $82.56 | $92.88 | $103.55 |
| Each Additional Schoolchild Over Age 18 | $233.23 | $267.29 | $300.31 | $334.49 |
| Additional for A/A spouse | $134.16 | $152.74 | $172.34 | $191.14 |
- A veteran with one child (with no spouse or parents) at a 70% disability rate had an increase of roughly $56.47, with their monthly sum moving from $1,756.82 to $1,813.29.
- On the higher side, for a 100% disabled veteran with a spouse, two parents, and a child, the increase was approximately $137.31, with their monthly compensation surging from $4,296.08 in 2023 to $4,433.39 in 2024.
What are cost of living adjustments?
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).
Do Cost of Living adjustments 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.
DIC benefits are tax-free as well.
What contributed to the 3.2% increase in rate?
This year’s 3.2% increase is not an arbitrary number. It mirrors broader economic trends, potentially including aspects like rising consumer prices, housing costs, or healthcare expenditures.
A more detailed analysis might show how specific factors weighed more heavily this year in the determination of the COLA.
COLA and VA Disability Rates The Last Few Years
| 2023 COLA | 2022 COLA | 2021 COLA |
| 8.7 percent increase | 5.9 percent increase | 1.3 percent increase |
The 5.9 percent COLA boost that was announced in November 2021 was applied to December 2021 compensation payments, and it was reflected in January 2022 compensation payments.
In 2021 and 2022, COLA rises were less than 2% on average.
The 2023 adjustment was the biggest raise in nearly 40 years, at 8.7%
What to do to receive new COLA for 2024?
Nothing! 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.
If you believe you’ve been inadequately rated for your disability, it’s essential to take action. Reach out to us if you’ve faced denials regarding your claim, seeking a higher rating or if you’re considering filing for secondary conditions.
