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There is good news and bad news for VA disability compensation recipients. The good news is that the first estimates of the next cost-of-living adjustment do predict an increase in pension amounts. The bad news is that the increase is the smallest in the last six years.
The projected increase for Department of Veterans Affairs (VA) disability pensions for May is directly tied to the 2026 cost-of-living adjustment (COLA). This increase would take effect on December 1, 2025, and payments would begin on January 1, 2026.
After record increases in the early 2020s, the COLA for VA beneficiaries and other federal pensioners has declined. Following this trend, experts' initial projections for 2026 are less encouraging than in previous years.
What are the latest projections for the 2026 COLA?
In its most recent prediction for next year's COLA, the Military Officers Association of America set the increase at 2.3%. This figure aligns with the projection published by the Seniors League last April.
Although an increase in federal pensions is always good news, it is also worth noting that the projected increase is less than the 2.5% granted for 2025 and falls far short of the adjustments of 8.7% in 2023 and 5.9% in 2022.
How is the COLA calculated?
The Social Security istration (SSA) calculates the annual COLA based on the third-quarter Consumer Price Index for Urban Wage Earners and Clerical Workers (I-W). This index measures changes in consumer prices to which certain workers are exposed.
The SSA officially announces the following year's COLA in October. However, organizations such as the MOAA and the Seniors League track changes in the I-W and economists' inflation projections to provide an estimate of the next adjustment.