Upcoming Increases in Veterans’ Federal Benefits

Veterans and their families might see enhanced federal benefits in two critical areas next year. Burial reimbursements are set to rise, and disability compensation could see the largest cost-of-living adjustment (COLA) in three years. For some veterans, this adjustment could mean an additional $1,800 in annual payments.

“For veterans and their families, these increases may appear modest on paper. However, they offer essential support when managing the everyday costs of a disability or funeral expenses,” Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, stated in a conversation with Newsweek.

Importance of These Adjustments

The Department of Veterans Affairs (VA) regularly adjusts benefits to align with inflation. A higher COLA means more substantial monthly payments for disabled veterans in 2027. Moreover, increased burial allowances can help families cover funeral and interment costs, which have been increasing significantly.

Americans feel the ongoing impact of the cost-of-living increase despite cooling inflation rates since the pandemic. Reports from food banks nationwide indicate a sustained rise in demand, partly attributed to elevated grocery prices and the end of specific aid programs. Rising living costs, such as high gas prices and increased homeowner expenses, continue to strain many families.

Details on Disability Benefits

The VA will confirm the 2027 disability compensation increase following the release of September’s inflation data on October 14. Warrior Disability forecasts a 2027 COLA ranging from 3.2% to 3.6%, based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

If this prediction holds, it will surpass the 2.8% increase received for 2026 and 2.5% for 2025. Beene emphasized that such adjustments prevent benefits from losing value as living costs rise.

Under a 3.2% increase, a veteran with a 10% disability rating would see a modest rise from about $180 to $186 monthly, adding roughly $69 yearly. Conversely, a veteran with a 100% disability rating, along with family dependents, might see annual benefits increase by about $1,794.

Final COLA figures will depend on September’s inflation statistics, thus varying from projections. Beene noted the ongoing challenge of keeping benefit increases in line with living costs, warning that unchecked inflation could still leave veterans financially stretched.

Updates on Burial Benefits

VA burial allowances have already risen for fiscal year 2026. Families now receive up to $1,002 for non-service-connected burials, and an equivalent amount in plot allowances if burial is outside a national cemetery. For service-connected deaths, the VA offers up to $2,000 in reimbursements.

Funeral expenses have become increasingly burdensome. The National Funeral Directors Association highlighted that the median cost for a funeral with viewing and burial reached $8,300 in 2023, excluding added costs, such as cemetery fees.

Who Gains the Most?

About 6.3 million veterans receive disability compensation. The payment increase especially benefits those with higher disability ratings and dependents. The COLA adjustments benefit veterans receiving larger checks, resulting in more significant dollar increases compared to those with lower ratings.

The burial benefit rise is particularly beneficial to families handling funeral costs outside national cemeteries, where expenses can be substantial.

Reason Behind Changes

Disability benefits rise with inflation, calculated through the CPI-W formula, much like Social Security COLAs. As consumer prices elevate, veterans’ compensation usually follows.

“A 3.2% to 3.6% COLA increase is welcome. Still, many are already feeling price hikes today,” Kevin Thompson, CEO of 9i Capital Group, mentioned to Newsweek. Rising living and burial costs are exacerbated by foreign trade issues affecting import prices.

The VA adjusts burial benefits to better align reimbursement levels with current funeral and interment costs. Newsweek has contacted the VA for further comment.

Next Steps

The official COLA figure for 2027 will be released after September inflation data on October 14. This increase will be incorporated into VA compensation payments starting late 2026. Higher burial reimbursement amounts are already effective.

For more insights, Newsweek’s team utilized Martyn, an AI assistant, to produce this report. Editors involved include Jason Lemon and Gray R. Thomas.