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No Cost of Living Increase for Veterans’ Benefits in 2011

Fiol Law Group|Posted in Lawsuits on April 27, 2017

For Florida veterans, the new year may bring unwelcome news. Yet again, retired veterans will not see a cost of living adjustment for their retirement benefits, disability benefits or survivor benefits. This is the second year in a row that veterans have not received an increase in benefits, and only the second year that veterans have not received an adjustment since automatic adjustments were enacted in 1975.

Why won’t veterans see any change to their benefits? These adjustments are based upon the Consumer Price Index, which is essentially a measurement of inflation. Those depending on Social Security Disability face a similar fate, as their benefits are also tied to the Consumer Price Index.

By tying the benefits increases to inflation, veterans don’t face unexpected hardships because of inflation. The benefits grow as inflation rises. However, when there is no inflation, as has been the case for the past two years, these benefits also do not change.

One challenge is that the considerations when measuring inflation across the board may not match an individual family’s expenditures. Some everyday costs have increased, while others costs have decreased; according to the Consumer Price Index, the overall shift is essentially zero.

For any particular family, though, the shifts may be significant. For example, if the cost of basic necessities such as food rises, families that are just barely covering this essential are not helped by the fact that large electronics have become less expensive. These purchases are not interchangeable.

Furthermore, as the legislative policy director of the AARP told the Associated Press, “While people aren’t getting [Cost of Living Adjustments] they certainly feel like they’re falling further and further behind, particularly in this economy.”

As others have noted, though, the inflation rate is not likely to remain close to zero indefinitely, and as this accelerates, those who are happy with the current lack of adjustments will be pleased to be tied to this existing system.

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