On October 12, 2023, the VA officially confirmed that the VA disability pay rates will be increased in 2024. This increase will be based on the latest Cost of Living Adjustment (COLA) provided by the Social Security Administration (SSA).
Since the COLA is calculated at 3.2%, the VA disability compensations will also increase by 3.2%, effective December 1, 2023. Veterans will start seeing an increase in their monthly checks from the VA starting January 1, 2024.
The latest updates are important to making informed decisions about your VA disability claims. In this VCU Blog post we’ll cover the new adjustments that will be applied to VA benefits next year.
What is CPI-W and Why It’s Important
You don’t have to be a finance expert to see that the cost of living is increasing all the time. What you can buy with $100 today is very different from what you would buy 10 years ago.
To follow and stabilize the increasing cost of living, SSA uses the CPI-W index. It is the Consumer Price Index for urban wage earners and clerical workers, aka the “blue collar workers”—the driving force behind the consumer market. CPI-W is based on the spending patterns of this core group of consumers.
To calculate the CPI-W index, the Bureau of Labor Statistics (BLS) collects price data for thousands of goods and services across the country. Then they evaluate each of those goods and services in a typical American household and track the average change in prices in the country.
The CPI-W is updated and published monthly by the BLS and works as the base for the annual COLA reports from the SSA.
How is CPI-W Used to Adjust Your Disability Benefits?
Every year CPI-W is used to adjust benefits paid to Social Security beneficiaries, Supplemental Income recipients, and Veterans entitled to VA Disability compensation.
Every year, the Senate passes new legislation that provides the COLA increase for the benefits paid to US Veterans. The VA then uses this legislation to update the monthly compensations accordingly. In other words, the increase in disability rates is always equal to the cost-of-living adjustment.
One of the biggest COLA increases, the highest since 1981, happened last year and was 8.7%. The year before that, the cost of living increased by 5.9%, which also led to a boost in VA benefits.
The 2024 Boost in VA Disability Rates
So, in 2024, the COLA increase will boost the amount of monthly VA disability compensation for Veterans by 3.2%. Does it apply to all Veterans and their family members? And what does it mean for you? Let’s take a look.
Suppose you received a 100% VA rate for your service-related disability and have no dependents. In this case, your VA disability compensation will go from $3,621.95 in 2023 to $3,738.85 in 2024 which is a $116.14 increase.
However, if you have one or more “qualifying dependants” such as a spouse, dependent parent, a child under 18, and a child between the ages of 18 and 23 who is at school, you are eligible for additional compensation.
On average, each of these dependants will “add” $174 to your monthly check from the VA. It means that if you have a 100% VA disability rate, a spouse, a dependant parent, and two studying children within the determined age range, you will receive $4,433.39 from the VA every month in 2023.
A Veteran with 30% disability without dependants is entitled to a $524.31 compensation in 2024. Every dependant will add about $51 to their VA benefits compensation.
It is important to note that, these additions are relevant only for Veterans with a VA rate of 30% and higher. In all other cases, dependents will not affect your VA disability benefits.
That is why we recommends that you work to understand all facets of your disability situation so you can claim that maximum VA benefits.
The Cost of Living Adjustment (COLA) reflects the changing economic situation in the country and helps to make sure that the VA disability benefits keep pace with the prices in your local supermarket.
As qualified professionals by your side, VCU can help increase your VA disability rate and your monthly compensation. There are lots of factors to consider and understand first in order to determine if you’re eligible for additional benefits.
Ready to explore and maximize your VA benefits? Book your Free 30-minute call with our Veterans Specialist today and let’s work together to claim what is rightfully yours!