The Department of Veterans Affairs pays monthly compensation to veterans with service-connected disabilities rated at 10% or higher. The payment is tax-free, continues for life, and increases with dependents and certain severe conditions. Understanding exactly how the rate tables work is essential for veterans planning their household budget — a 10% rating bump can mean an extra $200 to $1,800 per month, depending on the starting point.
The 2025 compensation rate table
VA compensation rates are set by Congress and adjusted annually for inflation. The 2025 rates reflect a 2.5% cost-of-living adjustment (COLA) over 2024. The base rate applies to a veteran with no dependents; additional amounts layer on top for spouses, children, and dependent parents.
| Rating | Veteran alone | With spouse | With spouse + 1 child |
|---|---|---|---|
| 10% | $175.51 | $175.51 | $175.51 |
| 20% | $346.95 | $346.95 | $346.95 |
| 30% | $537.42 | $599.42 | $644.42 |
| 40% | $774.16 | $863.16 | $925.16 |
| 50% | $1,075.26 | $1,183.26 | $1,264.26 |
| 60% | $1,361.88 | $1,487.88 | $1,586.88 |
| 70% | $1,716.28 | $1,862.28 | $1,979.28 |
| 80% | $1,995.96 | $2,162.96 | $2,297.96 |
| 90% | $2,241.91 | $2,428.91 | $2,581.91 |
| 100% | $3,817.96 | $4,031.96 | $4,220.96 |
Note that 10% and 20% ratings do not increase with dependents — Congress set those rates as flat amounts. The dependent additions begin at the 30% level and scale up with the rating.
How dependents increase your payment
At ratings of 30% or higher, the VA adds a monthly amount for each dependent. For 2025, the additional amounts are roughly: $62 for a spouse, $45 for a first child, $33 for each additional child, and $17 for each dependent parent. These figures compound — a veteran at 70% with a spouse, two children, and one dependent parent receives approximately $2,096.28 monthly, about $380 more than the base rate.
Parents are eligible as dependents only if they meet the VA's income-based dependency test. The VA uses a complex formula that considers the parent's own income, the contributions they receive from other sources, and whether they are married. Parents who are financially self-sufficient do not qualify.
You must report changes in your dependent status to the VA within 30 days — marriage, divorce, birth, adoption, a child turning 18 (or 23 if in school), or a parent's death. Failure to report can result in overpayment, which the VA will collect by reducing future benefits until the debt is repaid.
Special Monthly Compensation (SMC)
SMC is a higher benefit rate paid to veterans who have suffered anatomical loss or loss of use of specific body parts or organs. The most common SMC qualifiers include loss of a hand, foot, eye, or hearing in both ears; paralysis of one or more limbs; or being permanently bedridden. SMC is paid instead of (not in addition to) the standard rate at the same percentage, but SMC rates are significantly higher because they reflect the catastrophic nature of the qualifying conditions.
SMC rates for 2025 begin at $1,191.34 per month for SMC K (the lowest tier, covering conditions like loss of one eye or loss of a creative organ) and go up to $10,552.92 per month for SMC O/P (veterans who are blind, bedridden, and require regular aid and attendance). SMC L, for veterans who have lost two or more extremities, pays $4,047.92 monthly — substantially more than the standard 100% rate.
Annual cost-of-living adjustments
VA compensation rates are adjusted each December based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), the same index used for Social Security COLAs. The adjustment takes effect on December 1 and appears in the January payment. Recent COLAs have been: 8.7% in 2023, 3.2% in 2024, and 2.5% in 2025. In years of low inflation, the COLA can be zero, as it was in 2010, 2011, and 2016.
Veterans do not need to apply for the COLA — the adjustment is automatic and applies to every payment tier. The VA publishes the updated rate table each fall, typically in late October or early November after the Social Security Administration announces its COLA.
Tax treatment of VA compensation
VA disability compensation is entirely tax-free at the federal level. It is also exempt from federal income tax withholding, FICA, and Medicare taxes. Most states follow the federal treatment and exempt VA compensation from state income tax as well — including California, Texas, Florida, New York, and 38 other states. A handful of states tax VA compensation, but veterans in those states can usually structure their income to minimize the impact.
The tax-free nature of VA compensation is one of its most valuable features. A veteran receiving $3,000 per month in VA compensation is roughly equivalent to a civilian earning $4,300 per month in pre-tax income, depending on their tax bracket. This is why many veterans prioritize obtaining or increasing their VA rating — it can be more tax-efficient than equivalent wage income.
Retroactive payments and effective dates
When the VA grants or increases a disability rating, the new rate applies retroactively to the claim's effective date — typically the date the claim was filed or the date the disability began, whichever is later. Retroactive payments can be substantial: a veteran granted a 70% rating 18 months after filing would receive a lump sum of roughly $30,000 for the back period.
The effective date is one of the most contested issues in VA claims. Veterans who file within one year of discharge can get an effective date back to their separation date. Veterans who file later get an effective date of either the date the VA received the claim or, in some cases, the date an earlier claim was pending. Understanding the effective date rules can mean the difference between a $5,000 retroactive payment and a $50,000 one.
For help estimating your own payment, use our VA disability calculator. For the broader context of how ratings are assigned, see our VA disability ratings guide.
Last reviewed July 2, 2026. This article is informational and does not constitute legal, tax, or financial advice. Consult a qualified professional for guidance specific to your situation.