Veterans and military retirees will receive the same 8.7% cost-of-living increase as Social Security recipients next year, federal officials announced last week. The boost is the highest in 42 years. In 2022, the jump was 5.9%. Meanwhile, those in uniform and federal employees are likely to receive a 4.6% pay raise in 2023, the largest boost in two
decades. The difference in the two increases comes from their separate processes. By law, veterans and military retirees receive the Social Security cost-of-living adjustment, which the Social Security Administration announces annually in mid-October. The figure is a product of the monthly Consumer Price Index from the Bureau of Labor Statistics. The CPI measures a broad sampling of costs like rent, groceries and utilities during the preceding 12 months. In
contrast, pay raises for those in uniform and federal employees are part of the government's annual budget cycle, which Congress has the final say on. President Joe Biden requested a 4.6% raise for both groups. Congressional leaders have indicated they intend to provide that amount, but lawmakers have the authority to enact a higher or lower change. The military pay raise will begin in January if Congress approves — and Biden signs — the fiscal 2023 National Defense
Authorization Act by the calendar year's end. Some veterans and retirees will see the 2023 Social Security COLA increase in their December checks. About 5 million veterans and 2 million military retirees receive benefits checks monthly. — By John Goheen The retired pay computed under each retired pay plan is adjusted each year, effective December 1st, by the change in consumer prices. The COLA is determined by the percentage increase, if any, between the average 3rd quarter Consumer Price Index (CPI) of the current year over the average 3rd quarter (CPI) of the prior year. In the event of a decrease in the CPI, the COLA will not be negative, but will be zero. Additionally, the COLA for the next year will reach back to the 3rd quarter CPI to the last year in which there was a positive COLA increase. If the percent determined above is greater than 1 percent, the COLA for REDUX retirements will be reduced by 1 percent. If the percent determined above is 1 percent or less, the COLA for the REDUX retirement plan will be the same as for all other retirement plans. The first COLA adjustment after retirement is calculated under a formula different than that above, if the member retires between January 1st and September 31st. This is to preclude the advantage of receiving a retirement based on both a new pay raise and full COLA in the first year of retirement. The amount of this first "partial COLA" is calculated differently for the Final Pay and High-36 retirement plans. The partial COLA for REDUX plan retirees is based on the High-36, with a further prorated deduction. The first partial COLA under the Disability retirement plan is the same as for the Final Pay retirement plan. Note that the COLA for retired pay is calculated differently than the increase to active duty pay. Thus, retirement pay COLAs and annual active duty pay raises will differ as active duty pay raises will differ. Fiscal Year 2023 COLA Memorandum Fiscal Year 2022 COLA Memorandum Fiscal Year 2021 COLA Memorandum Fiscal Year 2020 COLA Memorandum Fiscal Year 2019 COLA Memorandum Fiscal Year 2018 COLA Memorandum Fiscal Year 2017 COLA Memorandum Fiscal Year 2016 COLA Memorandum Fiscal Year 2015 COLA Memorandum Fiscal Year 2014 COLA Memorandum Fiscal Year 2013 COLA Memorandum Fiscal Year 2012 COLA Memorandum Fiscal Year 2011 COLA Memorandum Fiscal Year 2010 COLA Memorandum Fiscal Year 2009 COLA Memorandum Fiscal Year 2008 COLA Memorandum Fiscal Year 2007 COLA Memorandum Fiscal Year 2006 COLA Memorandum Fiscal Year 2005 COLA Memorandum Fiscal Year 2004 COLA Memorandum Fiscal Year 2003 COLA Memorandum Fiscal Year 2002 COLA Memorandum Fiscal Year 2001 COLA Memorandum Fiscal Year 2000 COLA Memorandum Fiscal Year 1999 COLA Memorandum Fiscal Year 1998 COLA Memorandum Best listening experience is on Chrome, Firefox or Safari. Subscribe to Federal Drive’s daily audio interviews on Apple Podcasts or PodcastOne. Federal retirees and Social Security recipients are about to get the largest increase in their cost-of-living adjustment (COLA) in over four decades. The COLA will increase 8.7% for 2023, the Social Security Administration announced on Oct. 13. But not all federal retirees will see that amount added to their checks. Those in the Federal Employee Retirement System... READ MORE Best listening experience is on Chrome, Firefox or Safari. Subscribe to Federal Drive’s daily audio interviews on Apple Podcasts or PodcastOne. Federal retirees and Social Security recipients are about to get the largest increase in their cost-of-living adjustment (COLA) in over four decades. The COLA will increase 8.7% for 2023, the Social Security Administration announced on Oct. 13. But not all federal retirees will see that amount added to their checks. Those in the Federal Employee Retirement System (FERS) will receive a 7.7% COLA starting in January. The large COLA announcement for 2023 is no surprise, given high rates of inflation and climbing consumer prices this year, said Ken Thomas, national president of the National Active and Retired Federal Employees (NARFE) Association, in an Oct. 13 statement. “However, rising health care costs and the unfair treatment of specific federal annuitants could reduce the value of this adjustment,” Thomas said. “Seniors spend more on health care than any other segment of the population.” In 2023, federal employees and retirees in the Federal Employee Health Benefits Program (FEHBP) will pay 8.7% more, on average, toward their health care premiums. COLAs intend to keep federal retirees and Social Security recipients on pace with inflation. They’re measured by the Bureau of Labor Statistics’ Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W. Depending on the system under which a federal employee retires, though, the exact COLA amount will vary. Those on the Civil Service Retirement System (CSRS) receive the full COLA , while FERS retirees usually receive less. Exactly how much less depends on the size of the COLA itself: If the CSRS COLA increases less than 2%, FERS retirees will receive the full COLA. If the CSRS COLA increases between 2% and 3%, FERS retirees will receive a 2% COLA. And if the CSRS COLA increases more than 3%, FERS retirees will receive 1% less than the full COLA. Still, next year’s COLA is the highest increase since 1982, making the relatively large COLA of 5.9% in 2022 look minimal in comparison. Before that, the last sizeable COLA for civil service retirees was 5.8% in 2009. The chart below shows the COLAs for CSRS and FERS retirees going back to 2009. You can see COLA data going further back on SSA’s website.
Many federal advocacy groups disapprove of the reduced, or “diet” COLA, for FERS retirees. “This inequitable policy, enacted in the 1980s with the creation of FERS, fails to fully protect the earned value of FERS annuities, which decrease in value year after year — exactly what COLAs are intended to prevent,” Thomas said. In an effort to remove the disparity between COLAs for FERS and CSRS retirees, Sen. Alex Padilla (D-Calif.) introduced the Equal COLA Act in May. Rep. Gerry Connolly (D-Va.) also introduced a companion bill in the House last year. The legislation would give FERS retirees the full COLA amount. Connolly has introduced similar legislation over the last several years, but the bill has never cleared Congress. Other lawmakers have proposed changing the COLA system altogether. The Fair COLA for Seniors Act, which Rep. John Garamendi (D-Calif.) introduced, would make future COLAs based on the Consumer Price Index-E (CPI-E), rather the CPI-W. Both indices track consumer costs, but the CPI-E places greater weight on health care costs, which in theory would lead to a higher COLA for retirees. What will the COLA be for 2023?Social Security benefits will see their largest increase in more than four decades next year. The cost of living adjustment, or COLA, for 2023 will be 8.7%, the biggest jump since 1981, when the increase was a whopping 11.2%.
Does Va get COLA in 2023?The Social Security Administration recently announced a massive 8.7% COLA increase to VA Disability Rates 2023. Disabled veterans with a VA rating of 10% or higher will see their 2023 VA Disability Pay Increase by 8.7% effective December 1, 2022, with an official pay date of January 2023.
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