The Department of Veterans Affairs (VA) is the fifth-largest spender among federal agencies, accounting for 3.5% of federal spending in fiscal year (FY) 2023[1]. Adjusting for inflation, VA expenditures increased nearly 70% over the last decade, from $180 billion in FY 2013 to $301 billion in FY 2023.
What does the VA spend money on?
The VA spends most of its money — about half — on veteran income security, which includes veteran pensions and disability compensation. It spent another 42% on hospitals and medical care. The remainder went to veteran education, training, rehabilitation, and housing.
Between 2013 and 2023, spending on medical care for veterans increased by about 83% (adjusting for inflation) from $68.4 billion to $125.5 billion. Spending on income security programs increased 76% over the same period, growing from $85.8 billion to $151.1 billion, while spending on veteran education, training, and housing declined.
Is the veteran population aging?
Yes: Almost 50% of veterans were 65 or older in 2022, compared to 39% in 2005. With this aging population, total annual VA spending per veteran increased from about $4,300 in 2005 to an inflation-adjusted $14,400 in 2022.
This may explain why spending is increasing although the share of the US population who are veterans is shrinking; the number of veterans decreased by 3.7 million, from 21.9 million (or 6.9% of the population) to 18.2 million (around 5.7%), between 2013 and 2023. The aging of the veteran population may increase the cost of their care given the long-term care needs and complex health challenges of older Americans.
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[1] Based on reported obligated amounts. Obligations refer to the financial commitments and expenditures the government promises to make.
