How are cost-of-living increases determined for veterans who receive VA benefits?
Veterans who receive benefits such as disability compensation, payouts for dependants, and other Veterans Affairs living allowances typically receive Cost-of-Living Adjustments (COLA) annually, much as the recipients of Social Security benefits do. While COLA benefits for the latter group are automatic, recipients of veterans' benefits depend on intervention by Congress each year to approve cost-of-living increases.
What is a Cost-of-Living Adjustment (COLA)?
A Cost-of-Living Adjustment is an annual increase to Social Security, Supplemental Security Income, and VA Benefits to offset the effects of inflation. These increases are pegged to the percentage increases in the consumer price index (CPI) for urban wage earners and clerical workers (CPI-W) for a specific period.
In light of the fact that veteran are dependent on Congress each year to receive cost-of-living increases, there is no guarantee that lawmakers will reach an agreement, given the politics as usual nature of Capitol Hill. There is a push, however, for new legislation that would link COLA increases to the automatic increases implemented by the Social Security Administration.
The American Heroes COLA Act
The House of Representatives recently adopted the "American Heroes COLA Act" that is designed to provide an automatic cost-of-living increase for veterans' benefits.
“The current process leaves veterans and their families, who depend on these benefits to make ends meet, in limbo until Washington actually passes legislation,” said the bill's sponsor, Rep. Ralph Abraham (R-LA).
The proposed legislation would permanently resolve this problem and make it easier for veterans who are receiving benefits to make financial plans. While the current scheme has not prevented veterans from receiving COLA adjustments, congressional infighting and budget impasses have created uncertainty as normal legislative routines have been put on the back burner. If veteran benefit increases become automatic, the potential for political turmoil will be minimized.
Previously, veterans' advocacy groups have supported similar measures, but procedural issues related to how to tie the COLA for veterans to Social Security benefits were left unresolved. In addition to the COLA fix, lawmakers in the House and Senate Veterans Affairs Committees are also considering a number of other issues. While it remains to be seen whether members of Congress will address this issue in the next session, veterans are still faced with a host of problems centered on eligibility for Veteran’s Aid and Attendance Pension. If you have questions about veteran's benefits, you should speak with an attorney with expertise in veterans affairs.