Higher Federal Benefits for Veterans and Families Expected Next Year

Veterans and their families might see an increase in federal benefits next year in two key areas. Burial reimbursements have already increased, and disability compensation is set for a substantial cost-of-living adjustment (COLA). This adjustment could result in an increase of approximately $1,800 per year for some veterans.

“For veterans and their families, these increases may look modest on paper, but when handling everyday disability costs or funeral expenses, every extra dollar helps,” said Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, in an interview with Newsweek.

Why These Increases Matter

The Department of Veterans Affairs (VA) adjusts benefits to keep pace with inflation. For disabled veterans, a larger COLA means bigger monthly checks starting in 2027. For surviving relatives, increased burial allowances help offset rising funeral and interment expenses.

Despite a cooling in pandemic-era inflation, Americans still face a cost-of-living squeeze. Food banks report ongoing demand, linked to high grocery prices and reduced assistance programs. Rising costs strain families, with increased gas prices, property taxes, and insurance premiums affecting many.

Disability Benefits Increase in 2027

The VA is set to finalize the 2027 disability compensation increase following the release of September inflation data on October 14. According to Warrior Disability, the projected COLA ranges from 3.2% to 3.6%, based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), the same measure used for Social Security COLAs.

If projections hold, this adjustment exceeds the 2.8% increase for 2026 and the 2.5% for 2025, preserving purchasing power as living costs rise. A 10% disability rating veteran would see payments rise from $180 to $186 monthly, adding about $69 annually.

In contrast, a veteran with a 100% disability rating, a spouse, two dependent parents, and one child would see annual benefits rise by roughly $1,794. Monthly payments would increase from $4,671 to $4,821. The final COLA relies on September inflation data and could differ from these projections.

“The challenge is maintaining pace with expenses, as inflation could outstrip benefit growth, leaving veterans and families feeling financially strained,” Beene explained.

Burial Benefits Already Increased

VA burial allowances have risen for fiscal year 2026. Families can now receive up to $1,002 for a non-service-connected burial and an additional $1,002 in plot or interment allowances if the veteran is not in a national cemetery. Previously, these amounts were $978. For service-related deaths, up to $2,000 in burial reimbursements remain available.

Funeral costs have weighed heavily on families. The National Funeral Directors Association reported a median cost of $8,300 for a funeral with viewing and burial in 2023, excluding cemetery expenses.

Primary Beneficiaries

About 6.3 million veterans receive disability compensation. The increase mainly benefits veterans with higher disability ratings, especially those with dependents. Since COLA raises are percentage-based, veterans with larger monthly checks receive bigger increases in dollar terms.

The burial benefit hike is crucial for families facing high funeral costs outside the national cemetery system, where expenses can easily reach thousands of dollars.

Reasons for Changes

The disability increase results from inflation, determined by the CPI-W formula used for Social Security COLAs. As consumer prices rise, veterans’ compensation generally follows suit.

“While a COLA increase of 3.2% to 3.6% would be beneficial, the impact of higher prices is already felt,” noted Kevin Thompson, CEO of 9i Capital Group, to Newsweek. “Living costs and burial expenses have risen, compounded by foreign entanglements and tariffs.”

Burial benefit adjustments maintained by the VA reflect changing costs, ensuring reimbursements align more closely with funeral expenses.

Upcoming Steps

Veterans will receive the official 2027 disability COLA figure post-September inflation report release on October 14. This increase will apply to VA compensation payments starting late 2026 to early 2027. Higher burial reimbursement amounts are already in effect.