A wide range of special cash benefits, medical services and other programs are available to veterans of the U.S. Armed Forces who experience disabilities. The programs covered in this unit only include those administered by the U.S. Department of Veterans Affairs (VA) under the Veterans Benefits Administration (VBA). The Veterans Benefits Administration (VBA) oversees all of the federal benefit programs available to veterans and their family members. The programs include monetary benefits such as Disability Compensation and Disability Pension as well as vocational rehabilitation services, educational assistance, life insurance, home loans programs, and other special services.
This unit describes the cash payments provided to veterans with disabilities and offers detailed explanations about how these benefits are affected by employment and how they interact with Social Security disability benefits. For a complete discussion of employment services and supports offered to veterans with disabilities, refer to Module 1, Unit 3. For information about healthcare benefits afforded veterans with disabilities, refer to Module 4, Unit 3.
CWICs must remember that additional benefits are available to ALL veterans (not just those with disabilities) including life insurance, home loan programs and educational assistance. None of these generic benefits for veterans will be covered in this document, but information on these programs may be accessed at the VA website at: http://www.vba.va.gov/VBA/
Cash Benefits for Veterans with Disabilities
The VA administers two separate programs that provide monthly cash payments to veterans with disabilities: Disability Compensation and Disability Pension. This section describes each of these programs in detail and provides an overview of the disability evaluation system used by the VA.
In addition to the VA benefits described in this document (Disability Compensation and Disability Pension), military members with 20 or more years of active service (service retirement eligible) can retire from the Armed Forces as disabled, regardless of the percentage level of disability, if they are found to be unfit for service by reason of physical disability. People with less than 20 years of active service at the time they are removed from the military by reason of physical disability may be either separated or retired, based on a variety of factors. Veterans who retire from the military due to disability or who are separated due to disability may receive either monthly cash benefits or lump sum severance pay depending on their circumstances. These disability payments are part of the military retirement system administered by the Department of Defense (DoD) and are completely separate and distinct from the VA benefits described in this section. It is also possible in some cases for a veteran to collect BOTH Department of Defense military disability retirement payments and VA disability compensation.
Taking military retirement by reason of disability has several advantages for those who are eligible for this option. Individuals who receive military disability retirement are never subject to a review of their disability rating, and they receive all benefits due to regular military retirees, including the use of commissaries, military hospitals, as well as TRICARE insurance for themselves and family members.
When working with veterans, CWICs must first determine which type of benefit is being received (DoD military disability retirement or VA disability benefits) BEFORE referring to any of the information in this section, as these two benefits differ in several critical ways, including the monthly payment and how disabilities are assessed for ratings.
Disability Evaluation under the VA System
Unlike the Social Security system of determining disability using an “all or nothing” criteria, the VA system uses a disability rating structure in which degree of disability is assessed using percentages. Individuals may be determined to be disabled anywhere along a continuum ranging from 0% to 100% disabled. The U.S. Department of Veterans Affairs (VA) uses the “Schedule for Rating Disabilities” for evaluating the degree of disability in claims for veterans’ disability compensation, disability and death pension, and in eligibility determinations. The provisions contained in the VA rating schedule represent (as far as can practicably be determined) the average impairment in earning capacity in civil occupations resulting from disability. In other words, a veteran who is assessed at the 30% rating level would be expected to have a 30% reduction in earnings capacity due to disability. The Schedule for Rating Disabilities is published in Title 38 of the Code of Federal Regulations and can be accessed online at http://www.benefits.va.gov/warms/topic-title38.asp
In addition to the percentage rating system, the VA also designates certain veterans as having “total disability” and “permanent total disability.” Total disability is considered to exist when any impairment of mind or body is present which is sufficient to render it impossible for the average person to pursue a substantially gainful occupation. Total disability may or may not be permanent. Total disability ratings are generally not assigned for temporary exacerbations or acute infectious diseases except where specifically prescribed by the ratings schedule. Total ratings are authorized for any disability or combination of disabilities for which the Schedule for Rating Disabilities prescribes a 100% evaluation. In certain prescribed circumstances, a disability rating of less than 100% may result in a total disability rating.
Total Disability Ratings Based on Individual Unemployability
Total disability ratings for Disability Compensation may be assigned in certain cases in which the schedule rating is less actually less than 100%, the usual standard for total disability. If the individual with the disability is, in the judgment of the rating agency, unable to secure or follow a “substantially gainful occupation” as a result of service-connected disabilities, that individual may be deemed to have total disability for the purposes of VA Compensation. VA refers to this designation as “individual unemployability” and it may occur under the following circumstances:
If there is only one disability, this disability is rated at 60% or more; or
If there are two or more disabilities, there must be at least one disability ratable at 40% or more and sufficient additional disability to bring the combined rating to 70% or more.
Specific instruction is provided to VA disability rating adjudicators about how to determine when a veteran is individually unemployable. The regulations read in the following manner:
“It is provided further that the existence or degree of nonservice-connected disabilities or previous unemployability status will be disregarded where the percentages referred to in this paragraph for the service-connected disability or disabilities are met and in the judgment of the rating agency such service-connected disabilities render the veteran unemployable. Marginal employment shall not be considered substantially gainful employment. For purposes of this section, marginal employment generally shall be deemed to exist when a veteran’s earned annual income does not exceed the amount established by the U.S. Department of Commerce, Bureau of the Census, as the poverty threshold for one person. Marginal employment may also be held to exist, on a facts found basis (includes but is not limited to employment in a protected environment such as a family business or sheltered workshop), when earned annual income exceeds the poverty threshold. Consideration shall be given in all claims to the nature of the employment and the reason for termination.”
“It is the established policy of the Department of Veterans Affairs that all veterans who are unable to secure and follow a substantially gainful occupation by reason of service-connected disabilities shall be rated totally disabled.” (emphasis added)
[40 FR 42535, Sept. 15, 1975, as amended at 54 FR 4281, Jan. 30, 1989; 55 FR 31580, Aug. 3, 1990; 58 FR 39664, July 26, 1993; 61 FR 52700, Oct. 8, 1996]
The determination of whether or not a veteran is able to follow a substantially gainful occupation is essentially left up to the Ratings Adjudicator’s discretion within very broad guidelines. The term “unemployability” is not synonymous with the terms unemployed and unemployable for the purpose of determining entitlement to increased compensation. A veteran may be unemployed or unemployable for a variety of reasons yet still not be “unemployable” for the purposes of establishing a total disability rating.
Permanent Total Disability
A veteran may be classified as having permanent total disability when the impairment is reasonably certain to continue throughout the individual’s life. The federal regulations governing permanent total disability describes the impairments that would qualify for this designation in the following manner:
“The permanent loss or loss of use of both hands, or of both feet, or of one hand and one foot, or of the sight of both eyes, or becoming permanently helpless or bedridden constitutes permanent total disability. Diseases and injuries of long standing which are actually totally incapacitating will be regarded as permanently and totally disabling when the probability of permanent improvement under treatment is remote.
Permanent total disability ratings may not be granted as a result of any incapacity from acute infectious disease, accident, or injury, unless there is present one of the recognized combinations or permanent loss of use of extremities or sight, or the person is in the strict sense permanently helpless or bedridden, or when it is reasonably certain that a subsidence of the acute or temporary symptoms will be followed by irreducible totality of disability by way of residuals. The age of the disabled person may be considered in determining permanence.” (From 38 CFR §3.340 Total and Permanent Total Ratings and Unemployability).
The designation of total disability or permanent total disability is important because certain benefits are only afforded to individuals with these classifications. In addition, designations of total or permanent total disability may increase the amount of monetary benefits a veteran is entitled to receive.