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Obama signs 1.7 percent veterans' COLA hike

Nov. 27, 2012 - 02:19PM   |   Last Updated: Nov. 27, 2012 - 02:19PM  |  
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President Obama has signed into law a bill guaranteeing 4 million veterans and survivors will receive the same 1.7 percent cost-of-living adjustment in their benefits that is going to Social Security recipients and military retirees.

The increase takes effect on Dec. 1, and should first appear in January payments.

While the dollar amount of the increase varies by disability rating, the average increase for the year will be $500, said Sen. Jon Tester, D-Mont., one of the chief sponsors of the veterans' COLA bill.

That might not sound like a lot of money, but Larry Polzin, national commander of Disabled American Veterans, said the 1.7 percent boost is important.

"Compensation from the Department of Veterans Affairs is a major source of income for many veterans and their families, so adjusting those payments for inflation is absolutely necessary," Polzin said.

Cost-of-living adjustments in Social Security payments and retired pay for the military and federal employees are automatic, linked by law to changes in the Consumer Price Index, a measure of the cost of goods and services maintained by the Bureau of Labor Statistics.

However, increases in veterans' disability compensation, dependency and indemnity compensation for surviving spouses and dependents and pensions for low-income veterans are not automatic. They require Congress to act and the president to sign legislation providing increases.

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