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VA disability compensation and pension are two different monthly tax-free financial benefits paid by the VA. Disability compensation and pension are meant to make up for veterans’ lost wages because of long-lasting injury or disease. A veteran may only receive either compensation or pension, not both. The benefits are discussed further below. The benefit is paid by direct deposit to the veteran’s bank account, or to a payee if the veteran cannot handle his or her own money, also called a fiduciary.

Disability compensation or disability pension provides tax-free benefits to replace the income the veteran could have been earning if he or she were not disabled. Additionally, obtaining compensation or pension might mean the veteran now qualifies for VA health care. The VA does not have the capacity to provide health care to every American veteran. VA health care enrollment is based on factors such as POW status, catastrophic disability, service-connected status, and financial need. Many disabled veterans might be eligible for VA health care, TRICARE, or both. See the Veterans Health Administration webpage to apply for VA health care and find out more about the wide range of services offered.

The VA might pay disability pensions to veterans of war time (as defined at 38 U.S.C. §101) who are unable to work, even if the disability is not related to military service, and to veterans who are age 65 or older and have a low income. Even though it is called a pension, this benefit has no relation to years of service. It is based on inability to work, with no likely improvement, or age and financial need. Many attorneys are now informing caregivers of this benefit, because of its interaction with medical expenses. Disability pension is a set amount per year for any veteran who receives it, but it is offset by most income the veteran and spouse earn. Retirement pension, help from family and friends, and a spouse’s income all count as income. Welfare benefits, Supplemental Security Income, and certain wages earned by the veteran’s children do not count, but other agencies might count VA disability pension as income and reduce other benefits.

If the veteran’s medical expenses are more than 5 percent of his or her income, the medical expenses are subtracted from total income for the limited purpose of the VA’s determination of financial need in eligibility for VA disability pension. After subtracting medical expenses, many veterans may find this benefit worthwhile, especially if their disabilities are not service-connected. Medical expenses might offset income entirely for veterans who need constant care.

Disability compensation might result in a higher benefit, depending on the severity of disability, and comes with other benefits such as copayment-free health care for the service-connected disability. For this reason, eligibility for both disability compensation and pension should be considered when assisting a veteran with a disability claim.

Service-connected disability compensation is paid to veterans whose injuries or diseases are due to military service. A veteran is defined as any person who served in the armed forces of the United States and left the service on good terms, usually with an “honorable” or “general” discharge. A reservist or guardmember who never served full-time in the military might qualify as a veteran if he or she was injured while performing duties at drill or training.

The connection to military service is important. Disabilities due to injury or disease might be service-connected if they were:

• incurred in military service (unless due to willful misconduct),
• aggravated by military service,
• related to service by presumption (event occurs in military service and disease develops later, link is proven by law),
• related to or caused by another service-connected injury (also called secondary disability), or
• caused by VA medical negligence or while engaging in VA compensated work therapy or vocational rehabilitation.

Service-connected disability covers more types of injuries and diseases than you might think. It covers not only obvious combat wounds and PTSD but also disabilities such as hearing loss due to weapons training or cancer due to exposure to toxic chemicals. Research studies by the Institute of Medicine, the Air Force, and many others have shown a “nexus” or relationship of certain conditions to military service. The VA and Congress have established presumptions of eligibility for service-connected disability for many of these conditions, which means a veteran needs only to show he or she currently has the disability and the required military service, and a link between military service and the disability will be presumed or proven by law. The required military service might mean service near a nuclear bomb test site, for conditions caused by radiation exposure, or service in an area where Agent Orange was used, for conditions caused by herbicide exposure. Amyotrophic Lateral Sclerosis, commonly called Lou Gehrig’s Disease, is presumptively service-connected for all veterans with more than 90 days of active service. For a list of presumptive medical conditions, see the guide “ Federal Benefits for Veterans, Dependents, and Survivors” or visit the VA’s Public Health Website for more information.

For purposes of VA disability compensation, unlike for Social Security Disability Insurance, a veteran does not need to be totally disabled or unable to work to receive compensation. Each disability is evaluated based on the veteran’s symptoms and functional impairment, using the VASRD. VA employees might call this the rating schedule.

The VASRD is a guide in the evaluation of disabilities for purposes of assigning a monetary payment for the disability from the VA and/or military service. The VASRD is (administrative) law. It can be found in the Code of Federal Regulations 38 CFV §4. The percentage ratings range from 0 percent to 100 percent in 10-percent increments, and each 10-percent rating higher than zero (10 percent, 20 percent, etc.) is assigned a monthly monetary compensation value from $130 a month for a 10-percent rating to more than $2,800 a month for a 100-percent rating (and there are ratings above 100 percent, called special monthly compensation, for very severely injured veterans). A veteran who receives a 20-percent rating for a knee disability receives the same compensation as a veteran who receives a 20-percent rating for diabetes.

The percentage ratings and the monthly payments represent the average loss of earning capacity in civilian occupations resulting from diseases and injuries incurred during military service. This average-loss-of-earning-capacity measure means disabilities are rated according to the average-man-or-woman standard: If a veteran has a severe disability but is able to overcome it and work to a high capacity, he or she will still be rated according to the schedule, not by how much his or her earnings decreased. For example, a piano player does not receive more compensation for a finger injury than a telephone operator, even though it might have a bigger impact on the piano player’s ability to work. However, the impact on the individual person’s job will be looked at if the disability causes inability to work. See the VA’s website for current pay tables and information about how VA comes up with an overall rating if a veteran has multiple disabilities.

Special monthly compensation (SMC) is an amount paid in addition to or instead of a VASRD rating for severe injuries or combinations of disabilities, such as the loss of use of a limb, the need for trained medical care to deal with service-connected injuries, or a temporary or permanent homebound status. The guidelines for SMC are found in the VASRD at 38 C.F.R. §4.63-4.64, and payment rates are found at 38 U.S.C. §1114. SMC rates are designated by the letters “k” through “t” (with the exception of “q,” which is not currently used) because of their reference in the law at 38 USC §1114(k) through (t). The percentage rates for the VASRD are found at letters (a) through (j).

Most servicemembers or veterans who require a caregiver should be eligible for SMC or special monthly pension (also called aid and attendance or housebound), so consult with a trained representative on applying for this benefit. Some definitions of SMC might not be obvious: “loss of use of a creative organ” means loss of or loss of use of parts of the male and female reproductive systems, including erectile dysfunction, loss of breast tissue, and loss of reproductive capability. When deciding a claim for service-connected disability compensation, the VA must consider a veteran for SMC. This means if a veteran provides evidence of qualifying disabilities and the VA overlooks SMC, no special appeal is necessary. Ask the VA to grant SMC back to the effective date of the claim.

The VA rating schedule is a guide in evaluating the level of disability resulting from diseases and injuries incurred during or as a result of military service. The percentage ratings represent the average impairment in earning capacity in civilian occupations resulting from such diseases and injuries. See 38 C.F.R. § 4.1. The percentage rating for the average impairment because of a disease or injury might not adequately compensate a veteran who has symptoms not described in the rating schedule or is unable to work because of the disability but is not rated at 100 percent. In this case, the VA may assign a higher rating, called an extraschedular rating. The most common extraschedular rating is called “ TDIU,” or “IU,” which stands for total disability based on individual unemployability. In this case, the veteran would still be rated according to the rating chart, but paid at the 100-percent rate.

A 100-percent rating might be “total and permanent and static in nature” or “temporary.” If a rating is “total and permanent,” it is not likely the disability will improve. In this case, the veteran will be entitled to all the benefits that come with a 100-percent rating, such as eligibility for dental care, dependents educational assistance, and more. If a rating is temporary, the VA thinks the disability might improve and will schedule a follow-up exam to reevaluate the disability. In fact, all ratings may be lowered at any time if the veteran shows improvement, but there are rules VA must follow to reduce a rating. If a disability remained at a certain level of severity for 20 years, the rating cannot be lowered below that level unless there was a clear error or fraud.

A higher amount of disability compensation or disability pension is awarded if a veteran needs the aid and attendance of another person to do activities like grooming, bathing, eating, and toileting. Aid and attendance benefits apply to any veteran who qualifies for disability compensation or pension. The veteran will need to provide medical evidence, preferably from a physician, that aid and attendance is necessary. There is a form that a doctor can use to certify need for aid and attendance. It is harder to show a veteran suffering from purely a mental disability requires aid and attendance, so the doctor should explain in detail what would happen if the veteran were not receiving caregiver support.

Residence in a nursing home that provides medical care is also proof of a need for aid and attendance. Some nursing homes have abused this by promising a veteran he or she will be eligible for disability pension with aid and attendance, but coordination with other benefits is essential because a veteran who qualifies for pension with aid and attendance might not qualify for Medicaid. This might result in a veteran no longer being able to afford the nursing home or other programs such as rehabilitation programs that depend on Medicaid eligibility. Also, a small but growing number of insurance salespeople promise to qualify a disabled veteran for the disability pension with aid and attendance benefit if he or she moves his or her money into a financial product that cannot be touched. Because disability pension is means-tested, the veteran might qualify for the pension with aid and attendance after income or assets are hidden in the financial product but then might find him- or herself without enough resources or with a useless financial product.

How can a veteran or caregiver protect him- or herself? Use caution, consider whether a representative has a conflict of interest in filing your claim, and consider applying for non-means-tested benefits if eligible. Veterans with a service-connected disability who are applying for aid and attendance will actually be applying for SMC, which does not depend on income and the VA is required to consider. The relationship of a disability to military service might not be immediately recognizable, especially for veterans with a radiation-related or Agent Orange-related disability, so service-connected disability compensation should always be considered if a veteran has been encouraged to apply for aid and attendance.

Housebound benefits may be awarded as part of a disability compensation or pension rating if a veteran is confined to the home because of a disability. Housebound benefits may be awarded on a temporary basis for hospitalizations or recoveries from surgeries (there is a minimum length of hospitalization requirement).

A veteran may only receive either aid and attendance or housebound benefits, but VA will automatically pay the higher benefit if he or she applies for both. For more information, see the VA website on aid and attendance.

If you receive a decision on a benefit that you think is not correct, or if the VA did not take into account some evidence, you can either file an appeal or a reconsideration of the claim. Generally, an appeal is more appropriate when you disagree with the VA’s application of the law to your claim. Filing a claim for reconsideration is more appropriate when some new evidence became available while the claim was pending. Deadlines must be met to file an appeal; the most important and strict deadline is the “notice of disagreement,” which lets the VA know you disagree with its decision and want to appeal to the Board of Veterans Appeals.

A notice of disagreement must be filed within one year of an initial decision. The VA now has a notice of disagreement form you can file, although a notice of disagreement may be filed in any letter to the VA. Veteran service officers, as well as agents and attorneys, can help with appeals, although once an appeal is filed, they may be more hesitant to get involved because of deadlines and a need to review the evidence to see what was already done in the claim. If you went it alone for your claim, you might want to get the help of a representative before filing an appeal. Agents and attorneys might charge a fee to represent you, but veteran service organization services are free. You can request a hearing where you present your case to a VA adjudicator or a Veterans Law Judge. The veteran for whom you care must be present at the hearing, and the hearing might help your case if the veteran’s testimony would better explain his or her disabilities. However, a hearing might not be as useful in a case that is dependent on specific law and pieces of evidence, such as a claim for an earlier effective date.

The VA provides an automobile allowance (vehicle grant) to veterans and servicemembers with certain disabilities the VA has determined are connected to a veteran’s or servicemember’s military service to allow him or her to purchase a vehicle. It is a one-time grant in the amount of $19,817. It is payable to the vehicle’s seller. To receive assistance, the VA must give prior approval for the purchase of the vehicle. There is no time limit in filing for the grant.

Types of Disabilities Needed to Qualify for the Vehicle Grant

• The loss or permanent inability to use one or both feet.
• The loss or permanent inability to use one or both hands.
• Permanent impairment of vision in both eyes with a visual acuity of 20/200 or a severe problem with the veteran’s or servicemember’s peripheral vision.
• A severe burn injury.

Veterans and servicemembers who are eligible for the vehicle grant also will be eligible for adaptive equipment. However, they must be capable of driving the vehicle to receive equipment needed for operating the vehicle. Adaptive equipment includes power steering, power brakes, power windows, power seats, and equipment needed to assist them with getting in and out of the vehicle.

To apply for the benefit, complete VA Form 21-4502, Application for Automobile or Other Conveyance and Adaptive Equipment and file it with the veteran’s or servicemember’s VA regional office.

The VA will provide adaptive equipment on more than one occasion. However, it will only provide adaptive equipment two times within a four-year period, except in cases of theft, fire, accident, court or legal actions, costly repairs, and changes in disability that require a different type of vehicle. Unlike the vehicle grant, the funding for adaptive equipment may be paid to either the servicemember or veteran or the seller. Adaptive equipment also should not be purchased prior to receiving VA approval.

Types of Disabilities Needed to Qualify for Adaptive Equipment

• Any of the disabilities needed to qualify for the vehicle grant.
• An immobility of the joint (ankylosis) of one or both knees or hips.

Veterans whose disabilities are not service-connected may receive only equipment that will allow them to get in and out of their vehicles. Veterans who need adaptive equipment should file a VA Form 10-1394, Application for Adaptive Equipment — Motor Vehicle, and provided to the local VA medical center.

You may find more information on the VA site and VHA Handbook 1173.4.

The VA has programs to help veterans and servicemembers modify their homes or build homes that would allow them to be as independent as possible in a barrier-free environment.

The VA’s Specially Adapted Housing (SAH) program is a grant veterans or servicemembers can access to modify a home if they are rated by VA to be 100-percent permanently and totally disabled because of a service-connected disability. Only those veterans or servicemembers with certain types of disabilities are eligible for this benefit.

Types of Disabilities Needed to Qualify for SAH

• The loss of or inability to use both legs.
• Blindness in both eyes along with the inability to use one leg.
• The loss of or inability to use one leg along with the loss or inability to use one arm. Or, the loss of or inability to use one leg and problems due to injury or disease.
• The loss of or inability to use both arms.
• Severe burns that limit movement for at least two or more legs or arms or at least one arm or leg and the torso.
• **Post-9/11 veterans who have the loss of or inability to use one leg.
  
  **The VA’s authority to grant benefits under this provision is limited by Public Laws 112-154 and 113-37 but veterans in this situation are encouraged to apply.

To receive an SAH grant, it must be medically possible for the veteran or servicemember to live in the adapted house. It must be possible to adapt the house to meet the veteran’s or servicemember’s needs. It also must be financially possible for the veteran or servicemember to afford the home.

If the veteran or servicemember for whom you care meets these qualifications, he or she will be eligible to access a grant of up to $67,555 to adapt a home. This grant is adjusted annually for the cost of construction. The grant can be accessed up to three times or to the maximum amount available under the grant. There is no time limit for applying for or using the grant.

The grant funding can be used to build a house on land you buy to build the house, build a house on land that you already own, or remodel your current home. The grant also can be used to pay the mortgage of an accessible home you already own.

The VA’s Special Housing Adaptation (SHA) grant is another program that provides housing adaptation help for veterans or servicemembers who are rated by the VA as 100-percent permanently and totally disabled because of disabilities that are not eligible for SAH. Veterans’ and servicemembers’ disabilities might qualify them for both programs, but they may only use up to the maximize amount of the highest grant award (SAH).

Types of Disabilities Needed to Qualify for SHA

• Blindness with a visual acuity of 20/200 or less.
• Loss of or inability to use both hands.
• Certain severe burns.
• Impact of respiratory injury.

If the veteran or servicemember for whom you care qualifies for the SHA grant, he or she will be eligible for a maximum of $13,511. This grant, like SAH, is adjusted annually for the cost of construction. It may be used up to three times up to the maximum available under the grant. There is no time limit for applying for or using the grant.

The grant may be used to modify a home a veteran or servicemember or a family member plans to buy or a home one of these individuals already owns. It also may be used to buy a home that already has been modified for a person with a disability.

The VA’s Temporary Residence Adaptation (TRA) Grant is available to servicemembers or veterans who are going to be living temporarily in homes owned by family members. To receive a TRA grant, a veteran or servicemember must be eligible for either the SAH or SHA grant program. Veterans and servicemembers who are eligible for the SAH grant but who will need to live temporarily with family members can receive a TRA grant in the amount of $29,657. If the veteran or servicemember is eligible for an SHA grant, he or she will be eligible for a TRA grant in the amount of $5,295.

Prior to Aug. 6, 2013, the TRA grant was deducted from the amount of money available to the veteran or servicemember under either the SAH or SHA grant. After that date, using the TRA grant will not count against the amount of money available under those grants. For example, a veteran or servicemember eligible for SAH now can use his or her $29,657 TRA grant and still have access to all of the funding available to him or her under the SAH program ($67,555). However, using the TRA grant will count as one of the three uses of the SAH or SHA grant.

Individuals interested in applying for a TRA grant should apply for either SAH or SHA. Once contacted by an agent, they should specify they are interested in using the TRA grant to adapt the home of a family member.

If a rating is “total and permanent,” it is not likely the disability will improve. In this case, the veteran will be entitled to all the benefits that come with a 100-percent rating, such as eligibility for dental care, dependents educational assistance, and CHAMPVA coverage for dependents.

Life insurance programs are available through the VA. Servicemembers’ Group Life Insurance (SGLI) may be converted to Veterans’ Group Life Insurance (VGLI) within 240 days of leaving active duty without having to answer any health questions. Veterans must apply for VGLI within one year and 120 days of leaving active duty. If the veteran is declared by the VA 100-percent permanently and totally disabled because of a service-connected condition at the time of discharge, the veteran may apply to have a premium free extension of SGLI for up to 24 months. The waiver must be applied for through the Office of Servicemembers’ Group Life Insurance. VGLI may be converted to a whole-life policy.

Service-Disabled Veterans’ Insurance (S-DVI) is life insurance that provides up to $10,000 in coverage. Veterans must apply for this coverage within two years from the date the veteran is notified by the VA he or she has have been granted a new service-connected disability.

Veterans' Mortgage Life Insurance (VMLI) is mortgage protection insurance that can help families of severely disabled servicemembers or veterans pay off the home mortgage in the event of their death.

More information on these programs can be found in our life insurance section.

If a veteran is not medically retired from DoD but is found 100-percent disabled by the VA, he or she is entitled to a DoD ID card for commissary, exchange, and morale, welfare, and readiness privileges. Locations to get an ID card can be found at DoD’s RAPIDS site locator.

The veterans family can access benefits through the Dept. of Veterans Affairs for death and burial arrangements to assist with the financial expenses. Information on these benefits can be found here.

Payments for education or job training might be available to some caregivers under the VA’s Dependents Educational Assistance (DEA) program, which sometimes is referred to as Chapter 35 benefits.

DEA offers up to 45 months of education benefits. The benefits may be used for college (degree) study, certificate or license programs, apprenticeships, and on-the-job training.

Caregivers are eligible for DEA. If the VA rated the veteran permanently and totally disabled within three years from discharge, the spouse-caregiver remains eligible for DEA for 20 years from the date of the rating. Children of permanently and totally disabled veterans are eligible for DEA, provided they are between the ages of 18 and 26.

Applying for DEA is simple using one of the following methods:

• Apply using eBenefits
• Download and complete VA Form 22-5490

Eligible individuals are paid DEA directly after they are enrolled in college, job training, or a certificate program. Rates may adjust each year.

Find more information on the Chapter 35 benefit on the VA website.

The Post-9/11 GI Bill allows service members (officer or enlisted, active duty or Selected Reserve), to transfer unused education benefits to immediate family members (spouse and children). The service member must have at least six years of service, and commit to an additional four years of service in order to transfer benefits to a spouse or child. Because of the potential impact of this benefit on recruiting and retention, transferability policy is determined by the Department of Defense.

Click here to see the Fact Sheet on Post-9/11 Transferability, and click here to see the eligibility requirements and application procedures for transferring benefits.

A veteran with a disability that interferes with work might be eligible for vocational rehabilitation benefits to allow him or her to train for a new career. A veteran might qualify for vocational rehabilitation with a disability rating of 20 percent or higher, or 10 percent if the disability severely interferes with work (in this case, the disability rating should usually be appealed). If a veteran is severely disabled and a vocational rehabilitation counselor determines he or she is unable to work, the veteran may be placed in an independent living program (ILP). The ILP program gives veterans the ability to use vocational rehabilitation if not able to immediately pursue employment. Participation in the ILP program gives servicemembers and veterans tools to live as independently as possible, preserve their dignity and quality of life, and reorient and adapt to their disability to pursue education or work in the future. For more information about Vocational Rehabilitation (sometimes called “Voc Rehab”) and the ILP, check out VA’s Vocational Rehabilitation and Employment Service webpage. For servicemembers still on active duty, the service’s warrior transition unit will coordinate a transition plan that helps the veteran return to duty or transition to civilian life. This transition plan might include using VA education programs, vocational rehabilitation and counseling, and other VA services.