Veterans’ Compensation Cost-of-Living Adjustment Act of 2025
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This enacted law requires the Department of Veterans Affairs to increase disability compensation and dependency and indemnity compensation for veterans and survivors by the same percentage as the Social Security cost-of-living adjustment, effective December 1, 2025. It is a routine annual inflation adjustment that ensures veterans' benefits keep pace with consumer prices.
What this law does
What it does
The Act requires the Secretary of Veterans Affairs to increase, effective December 1, 2025, the dollar amounts payable under several categories of veterans' benefits by the same percentage as the cost-of-living adjustment applied to Social Security benefits that year. The affected benefit categories are: wartime disability compensation; additional compensation for dependents; the clothing allowance for certain disabled veterans; and dependency and indemnity compensation (DIC) for surviving spouses and children of deceased veterans. The Secretary must publish the new, adjusted amounts in the Federal Register by the same deadline that applies to Social Security COLA announcements for fiscal year 2026.
The Act also authorizes the Secretary to make a comparable administrative adjustment to disability compensation rates for certain veterans covered under Public Law 85-857 who have not received service-connected disability or death compensation under title 38. No new program is created; the law applies a formula-driven annual increase to existing benefit schedules.
Key provisions
- 1Requires the Secretary of Veterans Affairs to increase wartime disability compensation dollar amounts, effective December 1, 2025, by the same percentage as the Social Security COLA.
- 2Extends the same COLA increase to additional compensation for dependents and the clothing allowance for certain disabled veterans.
- 3Applies the same COLA increase to dependency and indemnity compensation for surviving spouses and children of deceased veterans.
- 4Authorizes the Secretary to make a similar administrative adjustment to compensation for veterans under Public Law 85-857 who have not received standard service-connected compensation.
- 5Requires publication of all increased benefit amounts in the Federal Register by the same deadline as the Social Security COLA disclosure for fiscal year 2026.
Who is affected
Veterans receiving wartime service-connected disability compensation and their dependents; surviving spouses and children of certain deceased disabled veterans receiving dependency and indemnity compensation; and certain veterans covered under Public Law 85-857 who have not received standard service-connected compensation. The Department of Veterans Affairs administers the adjustments.
Why it matters
Without a COLA adjustment, fixed-dollar benefit amounts lose purchasing power each year. By tying the increase to the Social Security COLA formula, veterans receiving disability payments and surviving family members receiving DIC will see their benefits rise by the same percentage as Social Security recipients, helping maintain the real value of those payments against inflation.
What changed
Changes to existing law
Amends 38 U.S.C. § 1114 (wartime disability compensation) (Sec. 2(b)(1))
Increases each applicable dollar amount by the Social Security COLA percentage, effective December 1, 2025.
Amends 38 U.S.C. § 1115(1) (additional compensation for dependents) (Sec. 2(b)(2))
Increases each applicable dollar amount by the Social Security COLA percentage, effective December 1, 2025.
Amends 38 U.S.C. § 1162 (clothing allowance) (Sec. 2(b)(3))
Increases the clothing allowance dollar amount by the Social Security COLA percentage, effective December 1, 2025.
Amends 38 U.S.C. § 1311 (dependency and indemnity compensation to surviving spouse) (Sec. 2(b)(4))
Increases applicable dollar amounts in subsections (a)–(d) by the Social Security COLA percentage, effective December 1, 2025.
Amends 38 U.S.C. §§ 1313(a) and 1314 (dependency and indemnity compensation to children) (Sec. 2(b)(5))
Increases applicable dollar amounts by the Social Security COLA percentage, effective December 1, 2025.
Agencies directed to act
Effective dates
- Increased disability compensation and dependency and indemnity compensation rates take effect
Funding and costs
Congressional Budget Office estimate
CBO estimates the bill would have no net budgetary effect relative to the baseline, because current law already assumes the cost-of-living adjustment will be provided.
S. 2392 would apply a cost-of-living adjustment (COLA) — estimated by CBO at 2.4 percent — to veterans' disability compensation and survivors' dependency and indemnity compensation beginning December 1, 2025, matching the Social Security COLA for 2026. CBO estimates the COLA would increase spending for those programs by about $5.1 billion in calendar year 2025 and by similar amounts in subsequent years compared to current law. However, because the Balanced Budget and Emergency Deficit Control Act of 1985 requires CBO's baseline to assume this COLA will be provided, enacting the bill results in zero net effect on direct spending, revenues, or the deficit relative to the baseline in both the 2025–2030 and 2025–2035 windows. CBO identified no intergovernmental or private-sector mandates in the bill.
How it works
The Secretary of Veterans Affairs calculates the increase by applying the Social Security COLA percentage — determined annually under section 215(i) of the Social Security Act — to each applicable dollar amount in the relevant title 38 benefit schedules. No rulemaking is required; the adjustment is self-executing by statute. The Secretary must then publish the updated benefit amounts in the Federal Register by the same deadline that applies to Social Security COLA disclosures for fiscal year 2026. For veterans under Public Law 85-857 not covered by chapter 11 of title 38, the adjustment is discretionary and administrative.
Legislative status & sources
Latest action
Became Public Law No: 119-42.
Official CRS summary
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This act requires the Department of Veterans Affairs (VA) to increase the amounts payable for wartime disability compensation, additional compensation for dependents, the clothing allowance for certain disabled veterans, and dependency and indemnity compensation for surviving spouses and children. Specifically, the VA must increase the amounts by the same percentage as the cost-of-living increase in benefits for Social Security recipients that is effective on December 1, 2025. The act requires the VA to publish the amounts payable, as increased, in the Federal Register.
The VA is authorized to make a similar adjustment to the rates of disability compensation payable to persons who have not received compensation for service-connected disability or death.
Legislative subjects
Administrative law and regulatory procedures; Armed Forces and National Security; Department of Veterans Affairs; Disability assistance; Inflation and prices; Veterans' pensions and compensation