Veterans and their families are likely to receive increased federal benefits next year. Burial reimbursements have already gone up, and disability compensation is expected to see the largest cost-of-living adjustment (COLA) in three years. Some could see an increase of about $1,800 per year in payments.
“For veterans and their families, these increases may appear modest, but with everyday costs related to disabilities or funeral expenses, any additional support can help,” Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek.
Importance of Adjustments
The Department of Veterans Affairs frequently adjusts benefits to match inflation. For disabled veterans, a higher COLA means larger monthly checks in 2027. Surviving families may find increased burial allowances helpful as funeral and interment costs have risen significantly in recent years.
Many Americans continue to feel the effects of the cost-of-living increase, even though inflation has eased since the pandemic. Food banks report sustained demand spikes, partly due to elevated grocery prices. Feeding America warns that rising costs pressure families and hunger-relief organizations.
Higher gas, diesel prices, and increased home costs like insurance premiums and property taxes are also placing financial strain on Americans.
Potential Disability Benefits Increase
The VA will finalize the 2027 disability compensation increase after releasing September inflation data on October 14.
Warrior Disability projects a COLA between 3.2% and 3.6% based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), the same measure used for Social Security adjustments. This potential adjustment could exceed the 2.8% increase in 2026 and the 2.5% in 2025.
“These adjustments help prevent benefits from losing purchasing power as living costs rise, crucial for veterans depending on VA compensation for essential purchases,” Beene said.
A projected 3.2% increase could result in a monthly rise from $180 to $186 for a 10% disability rating, adding about $69 annually. A veteran with a 100% rating, a spouse, two dependent parents, and a child might see an annual increase of $1,794, with monthly payments rising from $4,671 to $4,821.
Final COLA figures will depend on September inflation data and may vary from projections.
“The challenge remains to ensure these increases match expense growth. If inflation outpaces benefit growth, veterans and families may still struggle financially,” Beene added.
Burial Benefits Rise
VA burial allowances increased for fiscal year 2026. Families can receive up to $1,002 for a non-service-connected burial and up to $1,002 for plot or interment allowances outside national cemeteries. Previously, these were capped at $978. The VA provides up to $2,000 for burial reimbursements for service-connected deaths.
Funeral costs have become burdensome for many, with the National Funeral Directors Association reporting a median cost of $8,300 in 2023 for a funeral with viewing and burial, excluding additional expenses.
Primary Beneficiaries
About 6.3 million veterans receive disability compensation. Those with higher disability ratings and additional compensation for dependents benefit most. As percentage-based, COLA raises mean veterans with larger checks see bigger increases than those with lower ratings. Burial benefit hikes are significant for families with non-national cemetery funeral expenses, which are costly.
Reasons Behind the Changes
The disability increase results from inflation calculations using the CPI-W formula, also used for Social Security COLAs. As consumer prices rise, veterans’ compensation generally follows.
“While a 3.2% to 3.6% COLA increase would be welcome, high prices already impact veterans,” Kevin Thompson, CEO of 9i Capital Group, told Newsweek.
Burial benefit adjustments reflect changing costs and aim to align reimbursement with funeral expenses. Newsweek contacted the VA for comments.
Next Steps
The official 2027 disability COLA will be announced after the September inflation report on October 14. New rates will apply to VA compensation payments starting late 2026 and early 2027. The increased burial reimbursements are already effective.
Newsweek’s team utilized Martyn, their AI assistant, for this story. Learn more about their AI assistant, Martyn. Newsweek editors handling this story are Jason Lemon and Gray R. Thomas.