Disabled veterans, military retirees and survivors will see higher federal benefit payments in 2027 after the Department of Veterans Affairs and retirement systems apply a 3.6 percent cost of living adjustment.
The increase follows an inflation data review announced on October 14, 2026, and applies the same inflation-linked percentage to VA disability compensation, survivor payments and military retirement checks.
The 2027 adjustment is larger than the 2.8 percent increase in 2026 and the 2.5 percent increase in 2025.
What the 3.6 Percent Increase Means for Veterans
A veteran with a 10 percent disability rating will receive about $6.50 more each month, while a 100 percent disabled veteran without dependents will receive about $147.08 more monthly.
Special monthly compensation for eligible 100 percent disabled veterans may rise between $176.43 and $405.75 monthly, depending on the benefit level.
Dependency and Indemnity Compensation payments will increase by about $61.18.
Military retirees will receive an additional $36 per $1,000 of monthly retirement pension in 2027.
Retirees under the Career Status Bonus or Redux plan will receive a smaller increase of $26 per $1,000.
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, said the increases may look modest on paper but can still provide support for veterans and families dealing with the everyday costs of a disability or funeral expenses.
He said the adjustments are largely about keeping benefits from losing purchasing power as the cost of living rises, especially for veterans who depend heavily on VA compensation for essential purchases.
Beene also pointed to a longer-term challenge: ensuring the increases continue to keep pace with expenses, because if inflationary pressures consistently outpace benefit growth, even higher payments can leave veterans and their families feeling financially behind.
Additional VA benefits increased during the fiscal year, according to al. com.
Education payments under the Montgomery GI Bill Active Duty rose to up to $2,601 monthly, while Survivors' and Dependents' Educational Assistance increased to up to $1,621 monthly.
Burial allowances rose to $1,032 each, and vehicle grants increased to as much as $27,909 for eligible veterans with certain service-connected disabilities.
Kevin Thompson, CEO of 9i Capital Group, said a COLA increase of 3.2 to 3.6 percent would be welcomed, but much of the impact from higher prices is already being felt today.
He said the cost of living has increased and burial expenses have risen as well, with the rapid pace of increases compounded by foreign entanglements and tariffs driving up the cost of imports.
The 2027 COLA is calculated using the Consumer Price Index for Urban Wage Earners and Clerical Workers, comparing July through September inflation data with the previous year.
