Retired military veterans and those who receive disability payments from the Department of Veterans Affairs will see a 2% cost-of-living adjustment (COLA) increase in 2018.  The increase will be paid out to individuals in the following categories:

  • Retired military veterans
  • Disabled veterans
  • Veterans’ pension beneficiaries
  • Survivor benefit annuitants
  • Surviving families of veterans
  • Federal civilian retirees
  • Supplemental Security Income recipients
  • Eligibility for Medicare Extra Help and Medicaid
  • Federal/state food and housing assistance programs
  • Social Security recipients

The COLA increase is expected to impact about 70 million Americans. This is the biggest cost of living increase since 2012 and can equal as much as $310 per month for those at the top of their respective retirement pay charts.  The average increase is expected to be about $25 per month, or about $300 per year.

Disabled veterans will also enjoy an increase tied to the level of their disability rating.  For example, a disabled vet with a 10% rating can expect to see a small increase of about $3 per month.  A disabled vet with a 100% rating will see an increase of $58 per month. 

Social Security recipients will also enjoy a 2% increase, with an average increase of about $25 per month.

Retired military veterans, VA rates for compensation, and pension for disabled veterans and surviving families will be effective on December 1, 2017 and will be reflected on checks to be paid on December 31, 2017.  Social Security related benefits will see the increase reflected on payments in January 2018.  Adjusted federal SSI payments will be effective in January 2018 as well. 

Veterans who retire in 2017 will receive a temporary partial COLA due to already receiving a military pay raise in January.

The COLA is determined by changes in the Bureau of labor Statistics’ Consumer Price Index and is based on the percentage increase from the 3rd quarter of the previous year versus the 3rd quarter of the current year which is defined as the period covering July, August and September. 

Congress is still working out the details of a pay raise for current active duty troops for 2018, which should be in the 2.1% to 2.3% range.  However, unlike an active duty pay raise, the increase received by retirees and disabled vets does not require an act of Congress to go into effect.  Those groups will see their pay raise regardless of what Congress ultimately decides to do for current active duty troops.