For disabled U.S. veterans facing unemployment due to their injuries, or needing assistance with the costs of daily living, the U.S. Department of Veterans Affairs (VA) offers two monthly, tax-free benefits that can help lift the financial burden. Compensation and pension are two helpful, but very different, ways a disabled veteran and his or her family can offset the costs of medical care, prescriptions, and loss of income due to an injury or disease – but it’s important to know and understand the differences in the two benefits.

VA Disability Compensation

VA compensation – or more accurately, “service-related disability compensation” – is a monthly amount paid directly to your bank account, based on the severity of an injury or disease sustained during or as a result of service in the U.S. military. Similar to worker’s comp in the civilian world, disability compensation helps make up for the lost income a veteran could have earned if not injured during service. Service-related injuries and disabilities can cover a wide range of condistiona – including injuries like hearing loss due to weaponry use, psychological injuries like PTSD , and diseases potentially related to chemicals used during war or other environmental hazards. To be considered “service-related,” an injury or disease must have resulted in one of five ways:

• 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 or caused by another service-connected injury (also called secondary disability)
• Caused by VA medical negligence during VA-compensated work therapy or vocational rehabilitation

Unlike Social Security Disability Insurance, the VA compensation benefit is not all-or-nothing, where you are either “disabled” or you are not. Instead, disability ratings are set in 10% increments based on the amount of impact the injury or disease affects the veteran’s ability to work. The veteran’s line of work does not affect the rating (for example, a person with a hand injury would not receive more funds because he or she was a mechanic versus a teacher), nor does the type of injury (a person who is 20% disabled from a knee injury received the same amount as someone 20% disabled from chemical exposure).

Monthly payment are then distributed based on the set amount for that percent disability rating, from a 10% rating, all the way up to 100% (and beyond for severe or multiple injuries).  Monetary compensation ranges from $133 per month for a ten percent rating to over $3,000 per month for a one hundred percent rating (ratings beyond 100% are called “special monthly compensation”). The monthly payment may also be increased based on the number of the veteran’s dependents and other factors, so it’s important to review the current pay tables.

VA Pension

Wartime veterans who are disabled but whose condition is NOT service-related may be eligible for the VA’s disability pension, a different tax-free, monthly benefit designed to assist veterans who are struggling financially due to disability or disease. Although called a “pension,” this benefit has nothing to do with your number of years in the service; instead it is based on a veteran’s inability to work, with no foreseeable improvement, and financial need. The monetary benefit a veteran can receive is “needs based,” meaning your total monthly income is reviewed, and it is important to note that income from other sources – such as retirement pension, help from family members, and spouses income – are considered. However, if medical expenses use up more than 5% of the veteran’s income, these expenses can be deducted from the total household income, giving a true representation of the amount of money a veteran really has to live on month to month. This can make the disability pension a very helpful benefit for veterans and their families facing long-term illness and injury.

Additionally, veterans and certain spouses requiring long-term care and assistance – specifically those needing help with Activities of Daily Living (ADLs) such as feeding themselves, hygiene, and dressing and undressing – may be eligible to receive the Aid and Attendance Benefit. This little-known improved pension benefit helps offset the cost of hiring assistance with these tasks, and also includes individuals who are blind or a patient in a nursing home because of mental or physical incapacity. Assisted care in an assisting living facility also qualifies. Healthy veterans caring for a sick spouse may also be eligible for these benefits, so it is a benefit worth exploring.

For more information on which benefits you or your loved one may be eligible for, and assistance in applying, you can contact an accredited attorney, claims agent, or veterans service organization (VSO) representative near you by using the accreditation search tool on the VA website, or visit a VSO officer near you.

Written by Megan Hammons