Differences Between Compensation & Pension

Differences Between Compensation & Pension

If you’ve been injured due to your military service and served America’s people during wartime, you might be eligible for VA compensation and pension payments. However, although these two benefits may seem similar, they are distinctly different, and you need to know how to claim both — or if you qualify to receive both at the same time — to maximize your monthly income.

Read on for more information about VA compensation vs. pension payments and what each means for your financial future.

What Are VA Pension Benefits?

Veterans’ Pension benefits are monthly, federally tax-free monetary benefits for low-income and wartime Veterans. Wartime Veterans are those who served in the United States military during wartime. 

Even though VA pension benefits sound similar to traditional job pensions, they’re not affected by how many years you served in the military. Instead, the amount of a VA pension benefit is based on your overall financial need.

The pension benefits last for the rest of your life once you receive them unless some element of your eligibility changes to make you ineligible.

Who Qualifies for VA Pension Benefits?

Veterans can receive VA pension benefits if they were discharged under other than dishonorable conditions. In addition, applying Veterans must have served under one of the following conditions:

  • You began active duty before September 8, 1980, and served at least 90 days on active duty with at least one day during wartime; or
  • You started active duty as an enlisted person after September 7, 1980. You also served at least 24 months or the full period for which the military called you to serve on active duty with at least one day during wartime; or
  • You were an officer and started on active duty after October 16, 1981, and you hadn’t previously served on active duty for at least 24 months

In addition to the above requirements, your countable family income and net worth must be below the yearly limit set by Congress. 

  • The income cap is called the Maximum Annual Pension Rate or MAPR. Your MAPR depends on your dependents and your level of disability. In 2023, the MAPR ranges from $16,037 for a single veteran without children and who doesn’t qualify for special disability compensation, to $31,000 or more for veterans with children who qualify for disability pay for housebound status or aid & attendance pay
  • Now through the end of November 2023, the net worth cap is $150,538

On top of those requirements, at least one of the below things must be true for you to qualify for VA pension benefits:

  • You are a Veteran who is at least 65 years old
  • You have a permanent and total disability
  • You are a patient in a nursing home and receive long-term care due to a disability
  • You receive Social Security disability insurance or supplemental security income

Your payment rate for your VA pension payments is based on your countable income and the MAPR as described above.

“Countable income” is how much money you earn. It includes Social Security benefits, retirement or income payments, and income received by your dependents. Various expenses, such as medical expenses not covered by your insurance provider, can reduce your countable income, so you qualify for higher Veterans pension payments.

In essence, you receive money based on how much you earn/receive each month and up to the limit set out by the MAPR.

What Is VA Disability Compensation?

VA disability compensation is not the same thing as VA pension benefits. Disability compensation is a monthly payment to Veterans with a service-connected disability. They suffered an injury or disabling incident due to their time in the military.

VA disability compensation is available to Veterans who experience a disease, injury, or event while in the military that caused a disability they still have today. It’s also available to Veterans who develop negative health conditions, illnesses, or disabilities after they leave the service, though they must prove that their time in the military caused or aggravated these conditions.

Who Qualifies for VA Disability Compensation?

Veterans with an other than dishonorable discharge qualify for VA disability compensation benefits. Furthermore, the Veterans must prove that:

  • They experienced an event, injury, disease, or exposure during service; and
  • They have a current disability; and
  • The event, injury, disease or exposure during service caused or aggravated the current disability.

If they prove this, they receive a service connection and monthly benefits as disability compensation payments.

Proving disability compensation can be difficult, even in the best of circumstances. It can be complicated to determine what evidence the VA is looking for and an experienced Veterans law attorney can help navigate the process.

The Difference Between VA Compensation vs. Pension

There are several differences between VA compensation benefits and pension benefits.

Firstly, VA pension benefits are only available to Veterans and their non-service family members with demonstrable financial need. Disability compensation benefits generally aren’t affected by monthly income. A Veteran could be financially comfortable or secure but still qualify for disability benefits if they receive a service connection for their injuries or disabilities.

Next, VA pension benefits are not affected by service connections. A disability might factor into VA pension benefit decisions, but the disability doesn’t have to be service connected. Instead, the VA may think of the disability in terms of how it affects the Veteran’s ability to earn substantially gainful income. Meanwhile, a service connection is required for VA disability benefits.

In addition, the VA pension allows qualifying Veterans to be eligible for monthly payments based on age. Veterans over the age of 65 don’t have to have a disability to be eligible. Disability compensation cases aren’t affected by age, in contrast.

Lastly, both of these VA benefits tend to differ in payment rates. Monthly payment rates for pensions are set based on a veteran’s household income, whereas rates for disability compensation benefits depend on the severity of your service-connected disabilities.

Can You Receive Both VA Compensation and a Pension?

In most cases, you cannot receive both Department of Veterans Affairs disability compensation and a Veteran pension. In these cases, VA will automatically pay the amount of pension to which you are eligible first (because it is a tax-free benefit federally), and then if your disability compensation exceeds your pension amount will pay the difference in disability compensation. Keep in mind, however, that if your disability compensation is high enough, you might not meet the income cap requirement to receive pension.

What Are the Aid and Attendance and Housebound Benefits?

The Aid and Attendance and Housebound benefits are separate monthly payments added to the amount of your pension if you qualify for one. These are only available to Veterans who require day-to-day assistance with their living activities or are housebound.

To qualify for Aid and Attendance or Housebound payments, a Veteran must stay in bed or require the assistance of another person to help them do daily activities like feeding, dressing, and bathing. Alternatively, they can be a nursing home patient because of loss of physical or mental abilities, or they may have limited eyesight.

Regardless, the Aid and Attendance pension is intended to help cover the cost of assisted living, nursing home care, or in-home care from a live-in nurse. Veterans may combine the Aid and Attendance payments with general disability compensation payments if they qualify for both. 

Once again, however, to qualify for disability compensation payments, the Veteran must have a provable service connection between their disabling injuries and their time in the military.

Contact Berry Law Today

As you can see, VA disability compensation and pension payments are distinctly different benefits. Though you may qualify for both, you can only claim one. Fortunately, the VA defaults to paying you whichever benefit is higher, so you always receive the maximum monetary compensation possible.

That said, filing for and claiming your VA pension benefits or disability compensation can be tricky. Knowledgeable Veterans law attorneys like Berry Law can help you file successful applications, overturn disability benefits appeals, and much more when you contact us today for a free case evaluation.


How Are Pension Benefits And Disability Compensation Different? | Veterans Affairs

2023 VA Pension Rates For Veterans |

2023 Veterans Disability Compensation Rates |

Berry Law

The attorneys at Berry Law are dedicated to helping injured Veterans. With extensive experience working with VA disability claims, Berry Law can help you with your disability appeals.

This material is for informational purposes only. It does not create an attorney-client relationship between the Firm and the reader, and does not constitute legal advice. Legal advice must be tailored to the specific circumstances of each case, and the contents of this blog are not a substitute for legal counsel.

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