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The first cost-of-living adjustment since 2008 has recently been made, bringing a 3.7% increase in benefits.

The cost-of-living adjustments are based on increases in the Consumer Price Index for Urban Wage Earners and Clerical Workers ("CPI-W").  A cost-of-living adjustment effective for December of the current year is equal to the percentage increase (if any) in the average CPI-W for the third quarter of the current year over the average for the third quarter of the last year in which a cost-of-living adjustment became effective.  If there is an increase, it must be rounded to the nearest tenth of one percent.  If there is no increase, or if the rounded increase is zero, there is no cost-of-living adjustment.

The senate unanimously passed S. 894: Veterans' Compensation Cost-of-Living Adjustment Act of 2011, effective on December 1, 2011, for benefits to be payable in January of 2012. 

S. 894 only provided for an increase, effective December 1, 2011, in the rates of compensation for veterans with service-connected disabilities and the rates of dependency and indemnity compensation for the survivors of certain disabled veterans.  There was no reference to an increase in pension benefits.  At this time, it is unclear whether an increase in pension benefits will be made.

DECEMBER 5, 2011, UPDATE:

The Department of Veterans Affairs has updated their manual to provide the 2012 pension figures reflecting the aforementioned 3.6% cost-of-living adjustment.  The new pension benefit figures, effective December 1, 2011:

Single Veteran: $1,703
Married Veteran: $2,019
Surviving Spouse of a Veteran: $1,094

Some information taken from www.ssa.gov.