2015 COLA For Government Payments.

Every year, most federal payments are adjusted  by an increase called a Cost of Living Adjustment (COLA).  This amount is calculated based upon statistics called the Consumer Price Index (CPI).  These statistics are compiled by the Bureau of Labor Statistics and include the costs of various goods and services.

The 2015 COLA for military retired pay, Survivor Benefit Plan (SBP) annuities, Social Security benefits, and Department of Veterans Affairs (VA) disability and survivor benefits will be 1.7%.  This change will be effective 1 December 2014 and it will first appear in the January 2015 payments, which will be paid on 31 December 2014, because 1 January 2015 is a federal holiday.

There are two groups of retired military members who will not receive the full 1.7% increase:  members who retired in 2014, and servicemembers who selected the Career Status Bonus (CSB)/Redux retirement plan.

2014 Retirees

Retirees who retired in 2014 will receive a pro-rated COLA based upon the amount of inflation experienced in the calendar quarters since they retired.  Those who retired in the first quarter  of the year (January, February, or March 2014)will receive the full 1.7% COLA, and those who retire in the last quarter of the year (October, November, and December 2014) will receive no COLA adjustment.  Those who retired in the second quarter of the year (April, May, or June 2014) and the third quarter of the year (July, August, or September 2014) will receive pro-rated COLAs; the amounts have not yet been announced.

All members who retired during 2014 will receive full-year COLAs in future years.

CSB/Redux Retirees

Retirees who chose the CSB/Redux retirement plan agreed to accept reduced COLAs in exchange for the Career Status Bonus received while serving.    Redux retirees’ COLAs are 1% less than the regular COLA rate, so they’ll see a 0.4% COLA in their January 2015 paychecks.

While not a huge increase, this COLA is more than the 2014 COLA of 1.5%.  Hopefully, this small amount will provide some relief from the ever-rising prices of things!

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.
  • Vitsing

    Think this is bad, just wait for the new indexed CPI being proposed to save DoD, SSA, VA and et. al. money!

  • garcia

    this administration realy loves the military after all the great raises they have approved good job democratic party sfc. garcia

    • Matt

      Mr. Garcia, this administration or ANY administration does not give increases to Social Security – VA – or any other government facility that comes from Congress. U should know that!!

  • Debbie

    Does anyone know how often you are reassessed for your disability rating? I received 50% Rate last year and last week was increased to 70%. This week I received a letter stating the VA believes I may qualify for 100% Disability and to fill out the form they enclosed. If I were to receive a 100% Rate, is that permanent?

    • Matt

      Debbie, usually you are not REQUIRED TO have additional exams unless your doctor has put in your notes that your condition is “less-likely” to improve. Don’t get caught up in their / the VA’s wording. 100% is NOT permanent unless your 100% rating says Total and Permanent, you have to ask for this rating. There are 2 types of 100% rating (Total and Permanent and Individual Un-employability) Your rating is reassessed (usually or typically) only when you file a claim. Make sure that increase is accurate b/c if not and the VA finds it you will have to pay the difference between your new rating and your old rating for every month you received the higher rating that you weren’t suppose to get, so double check that!! Good luck.

      • Matt James

        Also, in accordance with the CFR, if you have been receiving a 100% rating for 20 years it then becomes permanent.