Every year, the Social Security Administration (SSA) adjusts benefits according to a cost-of-living adjustment (COLA). The COLA typically changes each year because it is based on a complex system of calculations involving multiple government bodies and branches. The Department of Veterans Affairs uses the SSA’s cost-of-living rate to determine the VA disability benefits COLA, as well. Veterans who rely on their disability benefits understandably want to know what the COLA will be each year so they can budget and plan accordingly.

For 2025, the COLA increase is 2.5%. This amount may not seem significant, but it is higher than in some recent years. For example, the 2020 and 2021 COLA increases were 1.6% and 1.3%, respectively. Other recent years saw a higher increase, such as the 8.7% adjustment in 2023.

If you feel that your disability determination or rating is incorrect or that your current condition warrants an increase, the VA disability attorney at the Law Office of Daniel Martin can help you appeal. Contact us today to schedule a free consultation.

How the Cost-of-Living Adjustment (COLA) Is Calculated Annually

The Social Security Administration (SSA) sets the cost-of-living adjustment each year, and the VA also uses that amount to determine the COLA for veterans with service-connected disabilities. The percentage is based on the Consumer Price Index for Urban Wage Earnings and Clerical Workers (CPI-W), which is calculated by the Bureau of Labor Statistics and measures fluctuations in the price of various goods and services over a period of time. If there is an increase in CPI-W, there will be an increase in the COLA rate.

The SSA uses data from the previous fiscal year through the current fiscal year to determine the COLA for the next year, at which point the Senate passes legislation to update veteran benefits accordingly. There are many moving parts involved in this process, which can make it confusing when trying to determine how the COLA will affect your benefits. If you are concerned about your VA disability benefits and suspect an appeal may be necessary, contact our office to discuss the details with our VA-accredited attorney.

Understanding the 2025 Cost-of-Living Adjustment (COLA)

The process for determining the COLA for veterans’ disability benefits is complex and depends on numerous factors. Because of this, rates vary from year to year.

Comparing the 2025 COLA Increase to Previous Years

The COLA increase for 2025 is relatively low compared to the last three years but is not the lowest rate that has been seen. Recent years’ adjustments are as follows:

  • 2024 – 3.2%
  • 2023 – 8.7%
  • 2022 – 5.9%
  • 2021 – 1.3%
  • 2020 – 1.6%

The increase of 8.7% in 2023 was the largest COLA increase since 1981.

Who Qualifies for a VA Disability COLA Increase?

Every veteran who received disability benefits in 2024 will be eligible for the 2025 COLA increase. Veterans who begin receiving benefits in 2025 will also be paid according to the adjusted rates. The cost-of-living adjustments implemented by the SSA and VA each year apply to all levels of service-connected disability ratings. Because the COLA is a percentage, each rating level, from 10% to 100%, will have a different monthly benefit amount increase.

You do not need to do anything in order to begin receiving the increased amount for 2025, as the VA will automatically apply the adjusted rate. However, it is a good idea to monitor your payments to ensure you receive the correct amount at the right times. If you notice that something is incorrect, notify the VA of the discrepancy.

Legal Guidance for Tennessee Veterans Seeking Disability Appeals

If you feel your disability rating is incorrect and want to appeal the decision, contact the VA-accredited attorney at the Law Office of Daniel Martin. We strive to make the appeals process as simple and stress-free as possible. Contact us to schedule a free consultation with our VA disability lawyer in Tennessee.