The Medal of Honor stands as the highest military award in the United States. It is reserved for acts of extraordinary bravery and is presented in the name of the President to members of the U.S. Armed Forces. Since the award was first established during the Civil War, only about 3,500 service members have received it, making it one of the rarest honors in the country. As of early 2026, only around 60 recipients are still living, according to the Congressional Medal of Honor Society.
Along with the recognition and lifelong distinction, Medal of Honor recipients also qualify for a special monthly pension that has existed for more than a century.
How the Medal of Honor pension began
In 1916, Congress created a lifetime pension for surviving recipients of the Army and Navy Medal of Honor. At the time, the benefit was $10 per month, which would equal roughly $300 in today’s dollars when adjusted for inflation.
Over the decades, lawmakers periodically increased the amount. The pension rose to $100 per month in 1961, then jumped significantly to $1,000 per month in 2002. That same 2002 legislation also changed how the benefit works going forward, allowing it to increase automatically each year based on inflation.
Rather than setting a fixed dollar amount forever, Congress tied future increases to the same Cost-of-Living Adjustment, or COLA, used for Social Security benefits. As a result, the pension rose gradually over time, reaching $1,489.73 per month in 2025.
Major increase approved for 2026
In December 2025, new legislation dramatically increased the Medal of Honor pension. Under the updated law, the benefit is now linked in part to Veterans Affairs Special Monthly Compensation rates, while still maintaining annual COLA adjustments.
As a result, the base monthly pension for Medal of Honor recipients in 2026 starts at approximately $5,780 per month, which equals $69,360 per year. This change represents one of the largest increases in the history of the program and reflects growing recognition of the sacrifices made by recipients.
Tax treatment and interaction with other benefits
One important detail for retirees is that this pension is not taxable. Under IRS rules, benefits paid by the Department of Veterans Affairs are excluded from federal income tax. Recipients receive the full amount without any portion being taxed at the federal level.
The Medal of Honor pension also does not replace or reduce other benefits. It is paid in addition to:
- VA disability compensation
- Military retirement pay
- Social Security benefits
While Social Security benefits may be subject to taxation depending on income and state of residence, the Medal of Honor pension itself remains tax-free.
It is also worth noting that even recipients who were awarded the Medal of Honor more than once do not receive multiple pensions. The law allows only one entry on the Medal of Honor Roll per individual, regardless of the number of awards.
Additional lifetime benefits for recipients
Beyond the monthly pension, Medal of Honor recipients qualify for a range of other lifetime benefits. These include priority access to medical and dental care for themselves and their immediate dependents, eligibility for space-available travel on Department of Defense aircraft, and burial eligibility at Arlington National Cemetery.
Children of recipients also receive special consideration for admission to U.S. military academies. At the state and local level, many recipients qualify for special license plates, public recognition programs, and private business discounts.
Why this matters for retirees
Although the Medal of Honor is awarded to very few individuals, the pension program highlights how federal benefits can evolve over time. For retirees, especially those receiving military or government benefits, it serves as a reminder that some programs include built-in inflation protection that helps preserve purchasing power over the long term.
The Medal of Honor pension is not just symbolic recognition. It is a substantial, tax-free lifetime benefit designed to honor extraordinary service while providing long-term financial security.