2026 Social Security Cost of Living Adjustment – What it means for Texas Seniors

Introduction: A Year of Adjustment and Challenge

In 2026, Social Security recipients nationwide will see several significant changes — from a modest cost-of-living adjustment (COLA) to updated tax rules and Medicare premium increases. While most focus on the changes to Social Security income and Medicare premiums, two groups may feel especially impacted: veterans receiving VA Pension and Texans navigating long-term care Medicaid. Understanding these shifts now can mean better financial planning and peace of mind.

1. Social Security’s 2026 COLA: Modest But Meaningful

The Social Security Administration has announced a 2.8% cost-of-living increase for 2026 benefits, averaging roughly $56 more per month for retirees. This adjustment helps keep benefits in line with inflation — but it doesn’t erase rising costs in other areas like healthcare and long-term care.

Why This Matters

• Every dollar counts for Americans living on fixed income.
• VA pensions and many Supplemental Security Income (SSI) recipients are also tied to Social Security COLA schedules, meaning VA benefit checks will likely rise at a similar rate.
• Yet rising Medicare premiums — also tied to federal cost indices — can erode much of that bump (e.g., Part B premiums are rising again).

2. VA Pension Recipients: New 2026 Reality

Veterans and surviving spouses receiving VA Pension are directly impacted by the 2026 Social Security COLA. That’s because the Department of Veterans Affairs adjusts VA Aid & Attendance benefits based on Social Security’s cost-of-living changes.

VA Pension Overview

• VA Pension (sometimes called Aid & Attendance) is a benefit for wartime veterans and certain surviving spouses who require regular assistance with Activities of Daily Living.
• These pensions have Maximum Annual Pension Rates (MAPRs) that are adjusted each year for cost-of-living increases.
• The VA Pension is intended to help offset the cost of care for those veterans and surviving spouses who qualify.
• Married Veterans can receive up to $2,874 per month, Single Veterans up to $2,424, and Surviving Spouses up to $1,558.

2026 Impact

• The 2.8% COLA for Social Security translates to roughly the same increase for VA pension benefit rates in 2026.
• That means more income for veterans whose overall financial picture often includes limited pension income, Social Security, and out-of-pocket medical or long-term care costs.
• Since these pensions are income-tested and can affect Medicaid eligibility, even a small bump may change planning strategies for care or benefits coordination. An experienced Elder Law Attorney can help you navigate the impact.

3. Texas Nursing Home Medicaid: A Tight Eligibility Window

Texas Medicaid for long-term care, including nursing homes, operates under strict income and asset limits — and 2026 sees some changes that matter to seniors and families.

2026 Eligibility Snapshot

For a single applicant needing nursing home care, Texas generally requires:
Monthly income under $2,982 and
Total countable assets under $2,000 (barring planning strategies).

If income is above the cap, applicants may still qualify for care by using tools like Qualified Income Trusts (Miller Trusts) — legal vehicles that help place excess income outside of countable resources.

Medicaid Resource Protections for Couples

When only one spouse needs institutional Medicaid, Texas allows the community spouse to retain a protected resource amount, which is increasing in 2026 (to $162,660) due to the COLA inflation adjustment.

These protections are designed to prevent impoverishing the healthy spouse — but they don’t raise income eligibility thresholds. Thus, Social Security, VA pensions, and other regular income sources must still fit within Texas’ stringent income limit rules.

An experienced Elder Law attorney can employ legal strategies and planning to help individuals qualify for Nursing Home Medicaid if needed.

4. The Intersection: Why 2026 Changes Matter to Veterans and Their Families

For many veterans and their spouses, both Social Security retirement benefits and VA pensions are core parts of retirement income. In Texas — where Medicaid has not expanded coverage — Nursing Home Medicaid remains the key safety net for long-term care.

Here’s how these elements interact in 2026:

COLA Helps But Isn’t Enough Alone

The COLA increase raises both Social Security and VA pensions modestly. While helpful, these amounts don’t keep pace with long-term care costs, which in Texas can exceed $8,000 per month.

VA Pension Can Be Underutilized

Many veterans don’t realize that they may be eligible for VA Pension once their care costs surpass their income.

Medicaid Rules Override Pension Income

Once nursing home Medicaid eligibility is established, Medicaid rules require most income — including VA pension — to go toward care. The remaining income a recipient keeps can be as low as Medicaid’s personal needs allowance of $90.00 per month.

Planning Can Change Outcomes

Effective strategies like Qualified Income Trusts, asset spend-down planning, and timing VA pension applications can protect resources and ensure eligibility. Early planning — ideally with an experienced Certified Elder Law attorney — helps avoid penalties related to Texas’ five-year Medicaid look-back rule and ensures compliance.

5. Final Takeaways for 2026

Veterans

Expect modest increases in VA pension benefits tied to the 2.8% COLA.
Understand how Medicaid rules can sharply reduce pension income once nursing home care begins.
Consult a benefits specialist early — don’t wait until crisis care is needed.

Texas Seniors Facing Long-Term Care

Eligibility for Medicaid nursing home care remains strict — income and asset limits won’t shift dramatically.
Tools like Miller Trusts can help qualifying when income is slightly over limits.
Married couples should understand protected resource rules to preserve family financial security.

Conclusion

The 2026 Social Security changes bring modest financial relief, but they also highlight ongoing challenges — especially for veterans on fixed incomes and Texas families navigating complex Medicaid rules. By understanding how these benefits intertwine, you can make smarter decisions, protect hard-earned resources, and get the care you or your loved ones deserve. Download our free guides to Nursing Home Medicaid and VA Pension below. Contact our office today to learn more.

Resources:

Download our Free One-Page Guide to Nursing Home Medicaid

Download our Free One-Page Guide to VA Pension

https://www.aarp.org/social-security/biggest-2026-changes

https://www.carescout.com/cost-of-care

https://www.ssa.gov/news/en/cola/factsheets/2026.html

https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles