Disabled veterans receive a 2.5% increase on their benefits, based on the 2025 cost-of-living adjustment (COLA), effective December 1, 2024. See the 2025 VA disability rates here.

How COLA Affects VA Disability Rates

The Cost-of-Living Adjustment (COLA) is an annual update set by the Social Security Administration to ensure that benefits keep pace with inflation. This helps maintain the purchasing power of various federal benefits, including veterans’ disability compensation. COLA is based on the percentage increase in the Consumer Price Index for Urban Wage Earnings and Clerical Workers (CPI-W), which measures changes in the prices of goods and services over time.

Does COLA Affect My Taxes?

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 to do to receive the COLA increase for 2025

Nothing! Cost of living adjustments do not require any additional application from benefit recipients. You do not need to request or apply for them. When an increase is determined, benefit recipients will automatically receive it.

COLA and VA Disability Rates Increase History

2024 COLA2023 COLA2022 COLA2021 COLA
3.2 percent increase8.7 percent increase5.9 percent increase1.3 percent increase

Written by

Claire Szewczyk

Claire Szewczyk is a Digital Content Coordinator for Hill & Ponton, PA in Florida. She was a former US Airforce civilian employee, who worked at Hill Air Force Base, in Layton, UT as a flight testing administrator. She has also spent several years working with the Department of Veterans Affairs audiology programs in Salt Lake City, UT and Pocatello, ID. She enjoys working with the Veteran population and keeping them up to date with information they need the most.