Beginning in 2023, disabled veterans and military retirees are likely to see a record pay increase for the second year in a row.
After taking into account the current pace of inflation, early projections estimate that COLA rates will rise by 9.6%.
COLA, or the Cost of Living Adjustment, is money that is for the purpose of covering higher costs of food, transportation, clothing and other non-housing items. It is typically tied to social security rates.
If the projections for the rise in COLA for 2023 come to fruition, it will be the largest increase veterans have seen in 40 years.
More info via Military.com:
For 2023, that means military retirees would see an average increase of more than $240 in their monthly retirement checks. Veterans receiving disability compensation from the VA also would see their monthly disability payments increase, with the average monthly amount going up by more than $150.
The VA says nearly 5.2 million veterans receive disability compensation, with an annual benefit of $18,858 as of 2021. According to the Defense Department, there are around 1.87 million military retirees, who had an annual average retirement payment of $30,265 in 2020, the most recent year for which data was readily available.
There are still 5 months left in 2022, so the annual COLA increase is not yet set in stone. But if inflation continues to rise throughout the year, we could end up seeing an even larger rate increase in 2023.
The annual COLA adjustment affects 1 in 5 Americans, and it is calculated based on the CPI (Consumer Price Index).