In 2023 COLA increases for disabled military veterans and retirees are expected to increase by 8.7%. This is shaping up to be the most significant increase over the last 40 years. In 2020 increases were less than 1.7%; in 2021, increases were less than 1.4%; in 2022, increases were less than 6%.1 Many military veterans depend on their disability and retirement pay to cover food, healthcare, and housing costs. With inflation making it more difficult to afford these items, the expected increase will be a welcome addition to their monthly budget.
How Much is the VA Disabilty COLA Increase Going to Be for 2023?
The amount of the COLA increase in your VA Disability increases for 2023 will vary based on your disability rating and the size of your family.
If you are a 60% disabled veteran with one child, you will see your $1,288.03 payment increase to $1,400.65. That's an increase of $112.62 monthly. Not to mention that this increase is tax-free at the 60% rating. This increase can help cover a significant portion of a veteran's and their child's food budget for the month.
Do you have additional children or a spouse? Here's an example:
$1,400.65 (veteran with 1 child)
+ 60.00 (additional child under age 18)
+ 194.00 (additional child over 18 in a qualifying school program
You can use the same calculation to determine how much your monthly retirement pay could increase. If you are a retired military veteran and receive VA Disability pay, you could see even more income in your monthly budget to help you afford your monthly expenses.
What Should You Do with Your COLA Increase?
There are a few things you can do with this unprecedented COLA increase. However, the first thing you should do is ensure that your basic needs are met. For example, ensure you have enough groceries at home and that your other physiological safety and security needs are taken care of. Then you can focus on other areas of your life that can put you in a better financial situation due to the COLA increase.
Here are a few things you can do with your COLA increase:
Adjust your budget for the new year to reflect the pay increase.
Save some or all of it for your future goals.
Pay down your outstanding debt.
Start an emergency fund.
Treat yourself, but not too excessively.
Whatever you do, and whatever the percentage of the COLA increase is, ensure that you manage it well.