Types of Disability Compensation for Veterans

Updated: November 27, 2020
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    Applying for VA disability compensation can be, for some veterans, one of the most important parts of the transition from military life to a civilian career.

    There is a specific set of procedures to apply and be rated for VA disability pay, which is described by the VA official site as “a monthly tax-free benefit paid to Veterans who are at least 10% disabled because of injuries or diseases that were incurred in or aggravated during military service.”

    But VA compensation isn’t the only money or benefit a disabled veteran may be entitled to. Those who leave military service with disabilities, injuries, disease, etc. may also be able to claim Social Security benefits, and state programs offer many different types of benefits, discounts, and reduced/eliminated fees for disabled vets.

    Types Of Disability Compensation

    Disabled Veterans may qualify for:

    The First Step: Submitting A VA Claim For Service-Connected Medical Conditions

    Many getting ready to retire or separate from military service will be scheduled for a medical review and VA disability claim opportunity as part of their out-processing, normally 180 days before leaving the service.

    The applicant is required to fill out paperwork describing their claim, and supporting documentation is required in the form of medical records and related materials. Some may choose to submit claims after their final out-processing, but it is crucial to file a claim as early as possible, especially if you anticipate needing your benefit payments as part of your primary income.

    Why is it so important to file your VA claim as the first step? Because many non-VA benefit programs require proof that your disabilities are service-connected. This is true most often with state-level benefits for disabled vets including education and financial options.

    Getting State-Level Disability Compensation

    There are state-level programs for disabled citizens who are not veterans, as well as those aimed specifically at military members and their families.

    Unfortunately these programs are not standardized nationwide; requirements, payment amounts, and program options will vary from state to state. You will need to contact your state Division of Veterans Affairs, state-level Department of Veterans Affairs, or similar agency to learn what options are open to you.

    You can also contact a local chapter of any Veteran Service Organization (VSO) such as the USO, VFW, AMVETS, Red Cross or other agencies that offer VSO services to veterans; doing so can help you locate your state or local agencies that offer benefits for disability compensation.

    Not All Disability Compensation Is Veteran-Specific

    Any applicant who meets Social Security Administration criteria for disabilities that interfere with the ability to work, seek work, or maintain employment can apply for Supplemental Security Income (SSI) and Social Security Disability (SSDI) benefit payments. You do not have to be a veteran to do so, but having a VA decision on your medical claim is considered supporting evidence when trying to apply for SSI or SSDI. Applying for Social Security benefits requires you to certify your ability to work is affected by your condition.

    One Benefit May Inform Another: The VA Pension Program

    Remember in the paragraphs above where it’s mentioned that a VA claim decision can inform your Social Security disability benefits application? The reverse is also true; consider the VA Pension program, which offers benefit payments to qualifying disabled veterans who also have qualifying service AND a financial need.

    A VA pension is offered to applicants who meet the following VA criteria:

    • No dishonorable discharge
    • Your yearly family income and net worth meet certain limits set by Congress

    Net worth in this case includes all personal property except a home and vehicle, and the calculation will include the net worth of a spouse where applicable. Who qualifies for a VA pension? Those who:

    • Started on active duty before Sept. 8, 1980, with least 90 days on active duty (at least one day during wartime; OR
    • Started on active duty as an enlisted person after Sept. 7, 1980, and served at least 24 months, or the full period ordered to active duty (with some exceptions) and at least one day during wartime, OR
    • Were an officer and started on active duty after Oct. 16, 1981, and not previously on active duty for at least 24 months.

    In addition to the criteria above, the applicant must meet one of the following:

    • Be at least 65 years old, or
    • Have a permanent and total disability, or
    • Be a patient in a nursing home for long-term care because of a disability, or
    • Receives Social Security Disability Insurance or Supplemental Security Income

    The last line in that list is crucial for some. If you have applied for and are receiving SSI or SSDI, you may qualify for a VA pension. It is a very good idea to call the Department of Veterans Affairs to learn what options may be open to you as an SSI/SSDI recipient.

    VA Housing Benefits

    Disabled veterans have a variety of housing benefits that may or may not include cash payments. In some cases there is no payment but being exempt from having to pay VA loan funding fees or state property taxes is just as good as a cash payment in some circumstances. VA housing benefits for disabled veterans include:

    State Property Tax Exemptions: Most states offer some form of property tax exemption for those with qualifying disabilities. These are not standard nationwide–they will vary from state to state,

    Specially Adapted Housing Grant (SAH): intended for qualifying disabled veterans who own their home or for homes owned by a veteran with qualifying disabilities. These funds are meant to offset the costs of adapting or modifying a home to be more accessible by the veteran.

    VA Special Housing Adaptation Grant (SHA): offered to qualifying veterans to offset the cost of adaptation or purchase of a home to accommodate the qualifying disability.

    VA Home Improvements and Structural Alterations (HISA) Grant: for disabled veterans with a documented medical need for alterations or modifications to a primary residence to make it more accessible. These grants require a statement from a physician diagnosing the need for such modifications.

    VA Temporary Residence Adaptation (TRA) Grant: an option for qualifying disabled veterans who need to offset the cost to modify a relative’s residence to make it more accessible.

    Mortgage Credit Certificate (MCC) Program: provides a federal tax credit for those with VA mortgages. This is offered by state and local housing authorities, check with your local agency to learn how to qualify in your state.

    VA Travel Reimbursement For Disabled Veterans

    The Department of Veterans Affairs offers travel reimbursement to qualifying veterans who must travel in order to make their medical appointments. This is offered in the form of mileage at a flat rate per mile (the rate is subject to change, consult the VA for the most current rates) and is subject to a cap and a deductible. Who qualifies for this reimbursement?

    • Qualifying low-income veterans
    • Veterans with 30% or greater VA-rated disability
    • Those traveling for treatment of a service-connected condition
    • Those receiving a VA pension
    • Veterans traveling for scheduled compensation or pension exams

    VA Veteran Readiness and Employment (VR&E)

    To qualify for VR&E, the veteran must have a VA service-connected disability rating of at least 20 percent AND have what the VA describes as an employment handicap. There are also provisions made for those VA rated at 10 percent “with a serious employment handicap”. To qualify you must not have a dishonorable discharge.

    In general VR&E does not offer monthly compensation, but does provide independent living services to those who qualify and are unable to work due to their disability. However, there is an option for qualifying vets that allows a subsistence allowance to be paid in conjunction with training or education that makes the veteran more employable.

    There is a subsistence allowance option for veterans who are able to use VR&E services AND have entitlement on their GI Bill.

    According to the VA official site, “The monthly amount varies depending on the ZIP code of the training facility and is usually greater than the following regular subsistence allowance rates that are available to Veterans with no Post-9/11 GI Bill eligibility who are using VR&E benefits”. This option is NOT open to those who are still serving–you must be released from active duty in order to claim it.


    While Medicaid is not direct compensation, it does provide qualifying veterans with the ability to get free healthcare coverage. Are you a veteran not enrolled in VA benefits or a veteran healthcare program?

    You may be able to get free or low-cost medical coverage via Medicaid. Household size and income requirements apply. You can apply for this coverage through your state Medicaid agency. Depending on your state’s laws, Medicaid may pay your care providers directly or work through an insurance agency.

    Making Claims With The VA

    One of the most important things to know when applying for VA disability compensation is that the veteran should not simply rely on the findings of a physical exam alone to make their claim-the veteran is making a claim on behalf of one’s self rather than being examined and having a doctor determine that “Condition X” is something the veteran should be compensated for.

    You are permitted to submit supporting evidence of your medical claim including findings by non-military doctors, supporting affidavits from friends, relatives, and co-workers, etc.

    When filling out the forms to make your claim (see below) you may be confronted with a large list of conditions, diseases, problems, or injuries that may or may not apply to you. The process of making a claim can be tedious and may feel overwhelming because of such lists.

    But it’s in the applicant’s best interest to be as careful and detail-oriented as possible in this area. Once your claim has been processed and a determination is made, you may not have a second chance to try for compensation for a service-connected medical issue. That does not mean that VA care is denied to you, but increased payments might be depending on circumstances.

    The VA Disability Scale

    According to VA.gov, disability compensation is “graduated according to the degree of the Veteran’s disability on a scale from 10 percent to 100 percent (in increments of 10 percent).”

    You may be eligible for benefits “paid for disabilities that are considered related or secondary to disabilities occurring in service and for disabilities presumed to be related to circumstances of military service, even though they may arise after service.”

    Apply for VA compensation using the eBenefits portal, at the nearest VA regional office, or through an accredited agent near you. You can search for an agent at the VA official site.

    Applicants should know that military medical records are required in order for the VA to make a determination, and that one or more doctor visits may be required in order to establish the nature of your claim and how it is associated with your military career. You may also need a copy of your discharge paperwork, military ID, plus any supporting evidence of your claim such as medical records from non-military care or related documents.

    Types Of VA Disability Compensation

    The VA’s disability pay program offers tax-free benefits to veterans with qualifying service-connected medical conditions. This is the most well-known disability benefit offered by the VA, but others include:

    Dependency and Indemnity Compensation (DIC)

    Dependency and Indemnity Compensation is a tax-free benefit intended for the surviving spouse, dependent children, and even the parent of a military member who died as a result of military service as well as those who died from service-connected disabilities.

    There is a “Parents DIC” as well as a “standard” DIC. You can apply for DIC at the VA official site, VA.gov (use the search tool to find “DIC”) and be advised that those who have applied for DIC in the past and were denied may have a second chance for benefits. This is due to the passage of the Blue Water Navy Vietnam Veterans Act of 2019.

    Special Monthly Compensation (SMC)

    Special Monthly Compensation is described by the Department of Veterans Affairs as an “additional tax-free benefit that can be paid to Veterans, their spouses, surviving spouses and parents.”

    When paid to vets, SMC is a “higher rate of compensation” offered to veterans who meet special requirements such as the need for “aid and attendance by another person,”  or because of a specific disability, “such as loss of use of one hand or leg.”

    When paid to military spouses and/or surviving spouses, the benefit is known as Aid And Attendance compensation and is offered “based on the need of aid and attendance by another person.”

    “Special Circumstance” Compensation

    Once the VA has made a determination on an individual veteran’s case, additional disability pay may be authorized depending on the condition.” Special Circumstance” VA disability programs include:

    • Individual Unemployability
    • Automobile allowance
    • Clothing allowance
    • Prestabilization
    • Hospitalization
    • Convalescence, dental, and birth defects

    In all cases, the VA has the final say in the amount of duration of compensation. Laws and program guidelines are subject to change due to legislation, funding, mission requirements, and other variables. It’s not safe to assume that yesterday’s benefits are the same today; you may be entitled to more, the qualifying criteria may be raised or lowered, etc. It’s best to call the VA or talk with a VSO about the most current options open to you.

    Written by Veteran.com Team