This year, veterans and those who receive VA compensation benefits will receive a record increase in their monthly payments.

The U.S. Department of Veterans Affairs announced the 8.7% pay increase would begin on Jan. 1, 2023. It's the largest payment increase the VA has issued in over 30 years.

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According to the announcement, the cost-of-living adjustment is calculated using the Social Security rate change and is based on the consumer price index.

Those receiving benefits shouldn't have to do anything to receive the extra money. The increase should automatically be added to payouts.

Those eligible for the increase are those who receive VA disability compensation. That compensation plan offers tax-free payments to veterans who got sick or injured while serving in the military. Those who had a pre-existing condition that became worse during time in the military may also qualify.

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People receiving Dependency and Indemnity Compensation will also see an increase. That funding provides money to the surviving spouse, children or parents of someone who died while working in the military, or of a veteran who died from a military-related injury or illness.

Those receiving special benefit allowances, such as an allowance for a car or clothes, or a Medal of Honor payment, will also see an increase in compensation.

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According to The American Legion,  Rep. Elaine Luria, D-Va. said: "This increase in compensation and benefits, the largest in more than four decades, will provide critical financial help to our veterans and their families during these challenging times. We have an obligation as a nation to take care of our veterans."

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