VA Disability Compensation

VA disability compensation is a monthly benefit the Department of Veterans Affairs pays to veterans who have a disability, illness, or injury that was caused or made worse by active military service. It is authorized under Chapter 11 of Title 38 of the U.S. Code. The benefit is not means-tested, so it does not depend on income or assets, and it is exempt from federal income tax. The VA rates each service-connected condition and produces a combined disability rating from 0 to 100 percent in 10-point increments, and the payment increases with that rating and with certain dependents.

Two features of the rating system trip people up. First, the compensation is paid only for service-connected conditions, so a disability must be linked to military service, either directly or as a secondary condition, or through a presumption the VA applies to certain exposures and illnesses. This makes it different from a general disability benefit. Second, multiple ratings do not add together. The VA uses a combined-ratings method that treats each additional disability as applying to the remaining "whole," then rounds the final figure to the nearest multiple of 10. A veteran rated 60 percent for one condition and 30 percent for another does not reach 90 percent; the two combine to 72 percent, which rounds to 70 percent.

VA disability compensation should not be confused with two neighboring programs. The VA pension is need-based and for low-income wartime veterans; disability compensation is neither. Military retired pay is a separate, service-length benefit, and the rules for receiving both retired pay and VA compensation together (Concurrent Retirement and Disability Pay for ratings of at least 50 percent, and Combat-Related Special Compensation for combat-related disabilities) are their own subject. It also differs from Social Security Disability Insurance in a basic way: Social Security has no partial-disability benefit and pays only if a person cannot do substantial work at all, while VA compensation is rated in increments, so a veteran can work full time and still receive it. Because the payment tables are adjusted for inflation each year, the specific dollar figures are published annually by the VA rather than fixed in place.

Compensation follows from the rating, which follows from a claim.

1. File a claim identifying each condition and how it connects to service. The VA develops evidence, often including a medical examination.

2. The VA assigns a percentage rating to each service-connected condition using its rating schedule.

3. If there is more than one rating, the VA combines them with VA math and rounds to the nearest 10 percent to set the overall rating.

4. The overall rating, plus any qualifying dependents, determines the tax-free monthly payment from that year's rate table.

A hypothetical example of the combining step. A veteran is rated 60 percent for one condition and 30 percent for another. The VA does not add these to 90 percent. Starting from 100 percent of ability, the 60 percent rating leaves 40 percent; 30 percent of that remaining 40 is 12; adding 12 to 60 gives 72; and 72 rounds to a combined rating of 70 percent. The 70 percent figure is what the rate table pays.

Pros

• Tax-free monthly income that does not depend on the veteran's other income or assets.
• Rated in increments, so a partially disabled veteran can work and still receive compensation.
• Protected from most creditors, and it opens the door to related benefits and, at higher ratings, to concurrent receipt with military retired pay.

Cons and cautions

• The disability must be service-connected, which can require substantial evidence and time to establish.
• Combined ratings use VA math and rounding, so adding conditions raises the total less than veterans expect.
• Payment amounts change annually, so any figure is only current for its year.