Why The 2026 VA Disability Increase of 2.8% Fails Veterans

The modern system of cost-of-living adjustments traces back to the late 1960s, when Congress tied benefits to inflation to prevent “the gradual erosion of veteran compensation.” That phrase, used in the Senate Committee Report on the 1967 Veterans Benefits Act, reflected a moral commitment: that the value of a veteran’s sacrifice should never depreciate with the dollar. Today, that principle survives only on paper.

In 2026, the Department of Veterans Affairs will increase disability compensation payments by 2.8 percent, mirroring the Social Security Administration’s annual Cost-of-Living Adjustment (COLA). Lawmakers will present it as proof that America honors its veterans. That the benefits are “keeping pace with inflation.”

But for veterans living on fixed incomes, the increase is neither fair nor factual. It’s an arithmetic theater.

Since 2019, the U.S. economy has undergone the sharpest sustained inflationary cycle in forty years. According to the Bureau of Labor Statistics (BLS), consumer prices rose nearly 19 percent from 2020 through 2024. But that broad number conceals deeper instability. Shelter costs climbed over 30 percent, grocery prices rose 25 percent, and vehicle insurance premiums jumped 43 percent during the same period. These are not marginal increases; they are structural shifts in the cost of living.

The economy is not neutral. It rewards volatility and penalizes stability. For those who live on fixed incomes, especially veterans whose capacity to reenter the workforce is limited, the economy functions as a second battlefield. The COLA was meant to disarm that threat. Instead, it has become a bureaucratic ritual that lags behind the enemy’s pace.

By contrast, VA disability compensation increased a total of roughly 16.5 percent from 2019 through 2025, which includes annual cost-of-living adjustments of 1.6% (2020), 1.3% (2021), 5.9% (2022), 8.7% (2023), 3.2% (2024), and 2.8% (2025) (VA Federal Register Notices, 2019–2025). That means even before the 2026 raise, veterans’ benefits have lagged national inflation by about 2.5 to 3 percentage points overall, and by far more when compared to the specific categories where veterans spend most of their income.

The 2.8 percent adjustment for 2026 amounts to roughly $104 per month for a veteran rated 100 percent disabled, bringing the total monthly benefit to $3,735. Yet according to the U.S. Department of Housing and Urban Development (HUD), the median rent for a one-bedroom apartment now exceeds $1,500 nationally, and utilities have risen more than 15 percent in the past two years. That $104 does not cover the difference between last year’s energy bill and this year’s. It barely slows the decline.

This system was never designed for today’s economy. The COLA is based on the CPI-W — the Consumer Price Index for Urban Wage Earners and Clerical Workers, which is a metric created in the 1970s to track costs for the average working household. But veterans are not the “average household.” Their income patterns, spending habits, and regional distributions differ dramatically. Veterans are more likely to live on fixed income, support dependents, and face transportation and energy costs far above civilian averages.

When policymakers say benefits “keep up with inflation,” they mean inflation as measured by a population that does not represent veterans. That gap compounds each year, producing an illusion of fairness while purchasing power quietly deteriorates.

The Index Is Outdated, Unrepresentative, and Economically Defective

Ask any veteran trying to live off disability alone. A gallon of milk that cost $3.50 in 2019 is now $5.15. A used pickup truck that sold for $20,000 five years ago now averages $28,000. For veterans in rural states, where public transport is scarce and home energy costs are higher, the COLA doesn’t stretch far enough to preserve even the basics of daily life.

The problem lies not in intent but in the design. The CPI-W is a blunt instrument in a precision economy. It weights categories like apparel, recreation, and communication, items that occupy a smaller share of veteran budgets, while underweighting housing, utilities, and transportation. According to Federal Reserve Economic Data (FRED), household energy costs have risen over 27 percent since 2019. Auto insurance rates, tracked by the BLS Motor Vehicle Insurance Index, have surged 43 percent, the largest increase in decades. Yet these categories have limited influence on the CPI-W. The government already recognizes that one-size-fits-all inflation accounting fails other populations. The CPI-E, for example, tracks price changes faced by elderly Americans, weighting medical care and housing more heavily than the CPI-W. The result: over the past decade, the CPI-E has consistently run 0.3 to 0.4 percentage points higher than CPI-W, meaning seniors’ true inflation runs above the national average. Veterans deserve the same analytical respect.

Housing is worse. HUD’s 2025 Rental Housing Report confirms that veteran renters (who make up nearly twice the proportion of the veteran population compared to homeowners) face an average rent inflation of 6.3 percent per year since 2020. Meanwhile, home insurance premiums have climbed 20–30 percent in several Midwestern and Southern states due to climate and risk-model changes. The COLA doesn’t adjust for regional or risk-based differences, leaving rural and middle-income veterans at a particular disadvantage.

These are not hypothetical numbers; they represent the real cost of independence. The Federal Reserve Bank of St. Louis shows that since 2019, median household income has risen just 15 percent, while cumulative inflation for essentials has exceeded 25 percent. For veterans on fixed benefits, that discrepancy translates into an effective loss of 8–10 percent in real income over five years. In simple terms, veterans can buy less today with their compensation than they could in 2020, even after every COLA increase combined.

Congress can correct this with one reform: establish a Veterans Cost Index (VCI). The VCI would be a dedicated inflation measure weighted by the categories veterans actually spend on. The federal government already maintains the CPI-E, a cost-of-living index for older Americans, and the Producer Price Index (PPI) for business inputs. There is no fiscal or technical barrier to a VCI — only political inertia.

Until that happens, VA compensation will remain indexed to someone else’s life. The nation will continue to boast about percentage increases that do not translate into real purchasing power for the people they’re meant to protect. Each year’s adjustment will continue to function as a polite deception: mathematically true, economically false.

Restoring Parity and Purpose to Veteran Compensation

The goal of disability compensation has never been charity; it has always been parity. Under Title 38, United States Code, § 1114, benefits are intended to “provide for the loss of earning capacity” caused by service-connected disabilities. If those benefits fail to maintain purchasing power, the government has not fulfilled its statutory or moral duty. A veteran’s independence is not preserved by nominal equality, only by real equality.

To restore that parity, Congress and the VA must modernize three pillars of policy.

First, the Index. The CPI-W must be replaced or supplemented with a Veterans Cost Index that reflects actual household economics, including regional cost disparities, housing, energy, transportation, and dependent costs. Veterans are not a monolith, but their economic pressures are measurably distinct.

Second, the Rating Schedule. The VA’s disability rating table, which still mirrors post–World War II wage models, is economically anachronistic. It assumes a direct correlation between physical impairment and lost manual labor potential. Today’s labor market is digital, hybrid, and cognitively demanding. Conditions like PTSD, TBI, and chronic pain have broad economic effects that the current schedule underestimates.

Third, Automatic Adjustments. When essential cost sectors (like housing or energy) rise more than 3 percent above CPI-W in a quarter, the VA should be required to issue a supplemental midyear adjustment. The Federal Reserve adjusts interest rates in real time to preserve economic stability. Veterans deserve the same responsiveness for their compensation.

These measures would not inflate federal spending disproportionately. They would simply align the veteran benefits system with economic truth. Every other major federal program, from Medicare reimbursement to defense procurement, adjusts for sector-specific inflation. It is indefensible that the one population whose economic security was explicitly guaranteed by law is still tethered to an outdated formula.

This is about the principle that a veteran’s standard of living should not decline because the government refuses to measure it correctly. When a veteran’s purchasing power erodes, so does the integrity of the promise that their sacrifice would be honored.

Representation and Reality: Who Really Speaks for Veterans

The problem isn’t just that the 2026 cost-of-living adjustment is too small. It’s that the people meant to fight for a fairer system have stopped living inside the one the rest of us inhabit. The same institutions that claim to advocate for veterans’ benefits, the Veterans of Foreign Wars (VFW), Disabled American Veterans (DAV), Iraq and Afghanistan Veterans of America (IAVA), and the Wounded Warrior Project (WWP), now operate at a level of financial insulation that dulls their urgency.

According to publicly available IRS Form 990 filings, the VFW’s top executives earn between $180,000 and $242,000 per year. The DAV’s National Adjutant / CEO reports $312,897, with several other senior officers above $250,000. IAVA’s CEO reports $293,000, and the Wounded Warrior Project’s CEO earns $470,301, with multiple executives above $330,000. Meanwhile, a veteran rated 100 percent disabled under the new 2026 COLA receives roughly $3,939 per month — just over $47,000 per year. That means the heads of some of America’s largest “veteran advocacy” groups earn between four and ten times the income of the veterans whose struggles they publicize.

And that’s only what the filings show. These figures exclude outside income (stipends, consulting payments, speaker fees, and donor-funded benefits) that do not appear on the public forms. Large nonprofits often operate through multiple affiliated entities, each with separate accounting, allowing substantial sums to flow invisibly. In plain terms, these organizations can raise money on the language of hardship while their executives live entirely apart from it.

That separation matters, because it helps explain why the veteran cost-of-living adjustment never changes in any meaningful way. If those leading the charge were actually living on VA compensation, they would see the system for what it is, a slow erosion of value disguised as progress. Instead, we have an advocacy class that measures success by fundraising totals rather than purchasing power. The cost of comfort is empathy.

That’s why Combat Veterans of America (CVA) was built differently. Every officer, director, and program lead currently serves without salary. Every dollar raised goes to operations, infrastructure, and reform initiatives, not payroll. When compensation is introduced in the future, it will remain transparent and modest, a matter of accountability, not ambition. Because representation should not be a profession; it should be a duty.

Veterans deserve advocates who live under the same economic pressures they’re trying to change. Until that’s true again, the conversation about “cost of living” will remain theoretical for those paid not to feel its cost.

Veterans Deserve Economic Realism, Not Symbolic Raises

The COLA was created to preserve dignity through stability. But when the formula fails, it does the opposite, quietly degrading dignity under the guise of fairness. The 2026 increase may look respectable on paper, but in an economy that has outpaced every metric used to calculate it, it is already outdated. The nation cannot continue to measure veteran well-being by a tool built for another century. Veterans have met every obligation asked of them; the government must now meet theirs with equal rigor.

A 2.8 percent increase may sound generous. But in the lived economy of 2026 (one of record rents, record insurance premiums, and record household strain) it is an admission that the system measures success by numbers, not lives.

Veterans don’t need ceremonial raises.

They need a Cost of Survival Guarantee, one that ensures their compensation grows along with the nation they defended and gave their best years to.

Brandon Michael Barron, J.D. is the Founder and National Commander of Combat Veterans of America (CVA), a national 501(c)(19) organization committed to modernizing how veterans serve and lead after service. A U.S. Army National Guard veteran, Barron writes on veterans’ disability & leadership.

The views expressed in this article are his own and do not necessarily reflect the official positions or policies of Combat Veterans of America.