Veterans and their families could see higher federal benefits next year in two areas.
Not only have funeral reimbursements been increased, disability compensation is also expected to receive the largest cost of living adjustment (COLA) in three years. For some, this could mean an increase in annual payments of about $1,800.
“For veterans and their families, these increases may seem quite modest on paper, but when you’re dealing with the day-to-day costs of disability or funeral expenses, every dollar can provide a little extra support,” said Alex Beene, a financial literacy lecturer at the University of Tennessee at Martin. newsweek.
why it’s important
The Department of Veterans Affairs has adjusted many benefits to help keep pace with inflation.
For disabled veterans, more COLAs means larger monthly checks in 2027. For surviving relatives, increased funeral subsidies can help offset funeral costs that have risen sharply in recent years.
Although inflation has eased from pandemic-era highs, Americans continue to feel a squeeze on the cost of living. Food banks across the country are reporting continued growth in demand, with some networks attributing the surge to rising grocery prices and the expiration of aid programs. Feeding America warns that rising costs continue to put a strain on families and hunger relief organizations.
Meanwhile, Americans are also feeling the impact of rising costs, including higher prices for gasoline and diesel. Homeowners also face rising insurance premiums, property taxes and maintenance costs.
what to know
Disability benefits could increase in 2027
VA is expected to finalize the increase in disability benefits for 2027 after releasing September inflation data on Oct. 14.
Warrior Disability projects a COLA of between 3.2% and 3.6% in 2027 based on the Consumer Price Index for Urban Wage Earners and Clerks (CPI-W), the same inflation measure used to determine the Social Security cost-of-living adjustment.
If that forecast proves accurate, the adjustment would exceed a 2.8% increase in the number of veterans in 2026 and a 2.5% increase in 2025.
“These adjustments are primarily intended to prevent benefits from losing purchasing power as the cost of living rises, which is especially important for veterans who rely heavily on VA compensation to pay for essential purchases,” Bean said.
Under the projected 3.2 percent increase, monthly payments for veterans with a 10 percent disability rating would increase from about $180 to $186, an increase of about $69 per year.
Meanwhile, a veteran with a 100 percent disability rating, a spouse, two dependent parents and a child could see annual benefits increase by about $1,794, with monthly payments increasing from $4,671 to $4,821.
However, the final COLA will depend on September inflation data and may differ from current forecasts.
“The longer-term challenge will be to ensure that these increases continue to keep pace with spending, because if inflationary pressures continue to outpace benefit increases, higher payments could leave veterans and their families feeling financially left behind,” Bean said.
Funeral benefits have been increased
Additionally, VA funeral benefits increased in fiscal year 2026.
Now, families can receive up to $1,002 in non-service burial benefits and up to $1,002 in land or burial benefits if the veteran is not buried in a national cemetery. These amounts were previously $978.
The Veterans Administration continues to provide funeral reimbursement of up to $2,000 for line-of-duty deaths.
Funeral expenses have also become an increasingly heavy financial burden for many families. According to the National Funeral Directors Association, the national median viewing and burial cost for a funeral will be $8,300 in 2023, not including cemetery charges and other expenses that can make the cost higher.
Who benefits the most?
About 6.3 million veterans receive disability compensation.
The increase in disability benefits primarily benefits veterans with higher disability ratings, particularly those who receive additional compensation for dependents.
Because COLA’s raises are calculated on a percentage basis, veterans who receive larger monthly checks typically see the largest raises. That means veterans who receive thousands of dollars a month will receive larger increases than those with lower disability ratings.
Meanwhile, the increase in funeral benefits makes the most sense for families facing funeral costs outside the national cemetery system, where costs can easily run into the thousands of dollars.
Why do these changes occur?
Increases in disability are the result of inflation, which is calculated through the CPI-W formula used for Social Security COLAs. Essentially, each year, as consumer prices rise, veterans’ compensation typically rises as well.
Kevin Thompson, chief executive of 9i Capital Group, said: “While a 3.2% to 3.6% increase in Coke prices will certainly be welcome, much of the impact of the price increases has now been felt.” newsweek. “Not only has the cost of living increased, but so have funeral expenses. Prices naturally rise over time, but the rapid pace of this increase is exacerbated by foreign entanglements and tariffs that drive up import costs.”
However, the VA will adjust funeral benefits to reflect changing costs and ensure that reimbursement levels are more closely aligned with funeral and burial expenses.
newsweek Contact VA via email for comment.
what happens next
Veterans will receive official disability data for 2027 when the September inflation report is released on October 14.
The increased amount will be factored into VA compensation, starting with benefits paid at the new rate in late 2026 and early 2027.
For funeral benefits, higher reimbursement amounts are already in effect.
Newsweek reporters and editors used our artificial intelligence assistant Martyn to produce this story. Learn more about Martin here.
Please contact Newsweek editors about this story: Jason Lemon and Gray Thomas