It’s that time of year again. VA is increasing compensation payment rates based on the latest cost-of-living adjustment (COLA) announcement. Beginning Jan. 1, 2023, Veterans and beneficiaries who receive VA compensation benefits will see an 8.7% increase in their monthly payments—the largest increase in over 30 years.

The annual COLA increase is tied to the Social Security rate change and is based on the consumer price index (CPI). The CPI, provided by the U.S. Department of Labor, measures the average changes in cost for urban goods and services. The Department of Labor takes a snapshot of the costs of a select group of goods and services and compares those costs to the previous year. When there is an increase, those receiving benefits see a boost in their monthly payments for the upcoming year.

If you are receiving disability compensation benefits from VA, you can use VA disability compensation benefit rates tables to find your current monthly payment amount.

Which VA benefits increase?

This increase affects VA disability compensation, which provides monthly tax-free payments to Veterans who got sick or injured while serving in the military or whose service made an existing condition worse. If you have a physical ailment or mental health condition that developed during or after service, you may be eligible for disability compensation.

Beneficiaries who receive Dependency and Indemnity Compensation (DIC) will also see an increase in their payment amounts. DIC provides a surviving spouse, child or parent of a service member who died in the line of duty, or the survivor of a Veteran who died from a service-related injury or illness, a tax-free monetary benefit.

Recipients of special benefit allowances, which include automobile allowance, clothing allowance, and Medal of Honor pension, will also see an increase in benefit payments.

When to expect the increase?

You should see the increased compensation amount starting with your January 2023 payment. If you do not see a difference in the amount, contact the VA regional office near you or call 800-827-1000.

If you have questions about applying for disability benefits or need assistance filing a claim, VA-accredited representatives are available to assist you free of charge. To find VA-accredited attorneys claims agents or Veterans Service Organizations representatives, visit www.va.gov/ogc/accreditation.asp.