If I served my country, aren’t I entitled to something?
By Margaret Costello
There are approximately 22 million military veterans living in the U.S. today. Fewer than 20 percent receive VA service-connected disability compensation (approximately 3.5 million) or pension benefits (fewer than 500,000). That means that more than 80 percent of veterans receive no pension or disability compensation from the VA. Although there are estimates that twice that number may be eligible for benefits, the majority of veterans will not be entitled to any compensation from the Veterans Administration (VA), despite the fact that they experience physical or mental disabilities, and in many cases are unable to work.
How can a lawyer help? Many veterans believe they must be entitled to some monetary benefits, when in fact they are not, while others don’t know they are eligible. All lawyers who deal with individual clients should have a basic understanding of the requirements for eligibility for VA benefits, in order to provide information regarding such potential benefits. This article will provide a brief discussion of some of the basics that every lawyer should know.
Service-Connected Disability Compensation. This is the most lucrative monetary benefit. It is a tax-free monthly payment that the veteran generally receives for life, but is available only when the veteran’s current disability began or worsened during military service, or was caused by military service. It is often difficult to prove that a disability is service-connected, especially if it has been a long time since the veteran’s discharge. A veteran will have to show that he or she has a current disability (something that affects ability to function; almost always requires a diagnosis). He also will have to show that the disability began during service (from service medical records or other corroborating evidence; the veteran’s statement is not sufficient) or was caused by events that occurred during military service (which will need to be independently corroborated). Even if an injury occurred, or a medical problem manifested during service, the veteran likely will need a medical opinion that the condition from which he currently suffers is, “at least as likely as not,” the same condition from which he suffered in service. If the veteran incurred an injury or psychological trauma in service, he will need a medical opinion that the in-service event, “at least as likely as not” caused or contributed to the current condition. These medical opinions, or “nexus opinions” must be explained, and reasons and bases for the opinion provided.
If the VA determines that a disability is service-connected, that is not the end of the analysis. The disability then will be rated, and a percentage will be assigned, based on the “average impairment of earning capacity” of an individual with symptoms similar to those of the veteran. The monthly amount of compensation is based on the rating (e.g., a 10 percent rating pays $130.94, while a 100 percent rating pays $2858.24). The benefit will accrue from the date the claim is received.
Pension Benefits and Special Monthly Compensation. If a veteran does not have a service-connected disability, he may be eligible for a pension benefit and, in some cases, special monthly compensation (e.g., aid and attendance). However, this benefit is limited only to veterans who served during a “time of war” (or spouses of such deceased veterans) with very low incomes, or in some cases moderate incomes offset by high out-of-pocket medical expenses. Veterans often have misconceptions about this benefit, and believe that all veterans over the age of 65, or who are disabled and unable to work, can receive pension; that is not the case. In fact, less than 5 percent qualify.
In order to qualify for a pension benefit, the veteran must be either 65 years of age or totally disabled from working, and have an annual income less than $12,465 for a single veteran, and have served during a period of time during which the U.S. was/is at war, as established by Congress. If any one these criteria are not met, the veteran will not qualify. A widow or widower of a veteran need meet only an annual income requirement of less than $8,359 and the wartime requirement for the veteran spouse; the widow or widower’s age or disability will not be considered.
All family income from any source is counted. This includes social security income, other pension income, life insurance proceeds, lottery winnings, etc. Out-of-pocket medical expenses (e.g., co-pays, insurance premiums, over-the-counter medication) can be subtracted from income, if those expenses exceed 5 percent of the total income. The veteran (or widow/widower) will be paid the difference between the amounts stated above and his or her income. Note that the VA will seek reimbursement for overpayment, and cut off benefits until overpayment is made, if the veteran receives any additional income, such as part-time employment, insurance benefits, or a bequest from an estate. The veteran (or widow/widower) also cannot have substantial assets (generally considered to be over $60,000 for a single person; a first home or car is not counted) in order to be eligible for pension.
If the veteran, or veteran’s widow/widower needs assistance with tasks of daily living (e.g., feeding, dressing, bathing, meal preparation, general supervision) and otherwise qualifies for pension, he or she will qualify for a higher monetary benefit (for a single veteran, the annual income cannot exceed $20,795). This often benefits even middle income families, if there are significant medical expenses, including nursing home care, as out-of-pocket medical expenses can be deducted from income.
Misinformation and Scams Related to Pension Benefits. Financial advisors and others, including lawyers, have offered inaccurate information to veterans regarding pension benefits, and in some cases perpetrated a scam. Because a veteran cannot qualify for pension unless he or she has limited assets, advisors sometimes provide advice to divest, or otherwise shield, the assets. In some cases, these advisors form lucrative alliances with nursing homes, retirement communities and assisted living facilities. In many cases, the veteran or veteran’s widow has been promised that he or she will qualify for a VA pension, and therefore he signs a long-term contract with the facility. The veteran may not qualify, or if he does qualify, his assets now may be tied up for years, and, after signing a long-term care contract, he often finds himself in a worse financial position than prior to receiving his pension.
Although there is no “look-back” provision for veterans’ pension benefits, i.e., a veteran can transfer all of his assets today and be eligible for pension tomorrow if his income is low enough, the transfer of assets may affect Medicaid, which does have a “look-back” provision, as well as eligibility for other benefits and supports which seniors might need. The pension benefit was designed to help only the poorest of veterans and survivors, and in most cases it is not worthwhile to construct a plan to divest or mask assets in order to collect this benefit.
“Pension poaching” also is sometimes reported. This practice involves the purchase of pension rights from the veteran in exchange for a lump sum advance, and is illegal under federal law.
Benefits to Veterans’ Family Members. Benefits available to family members of veterans are very limited. If a veteran is receiving pension, or service-connected disability compensation for which he is rated at least 30%, he will be paid a higher monthly amount if he has a spouse or dependent children. If the veteran is 100% disabled due to a service-connected disability, his spouse and dependent children will be eligible for educational benefits.
The only monetary benefits potentially available to family members of deceased veterans are accrued benefits and dependency and indemnity compensation (DIC). A claim for accrued benefits can be made if the veteran has a claim pending at the time of his death, and the claim subsequently is granted. If the surviving spouse or child files a claim within one year of the veteran’s death, he or she will be paid the benefits that would have been paid to the veteran from the date the claim was filed until the veteran’s death. Monthly DIC benefits are payable only to the widow or widower and dependent children if the veteran dies due to a service-connected disability; payments stop if the widow or widower remarries (unless he or she remarries at age 57 or older).
Lawyers and the VA. Lawyers must be accredited by the VA in order to represent clients in proceedings before that agency. Attorneys can represent clients for pay at the VA only after a claim has been denied; they cannot be paid to represent clients in the initial claims procedure. Attorneys cannot be paid for assisting a client in filing a claim or completing a pension application.
Conclusion. There are many complexities and nuances in VA benefits law, and there is a great need for knowledgeable and ethical practitioners. Lawyers are encouraged to gain more knowledge of this area, and to seek counsel from experienced accredited lawyers when advising their veteran clients.
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Margaret (“Peggy”) Costello is clinical associate professor at the University of Detroit Mercy School of Law, where she was instrumental in establishing the Veterans Law Clinic and Project Salute. Under her direction, students in the Veterans Law Clinic assist low income veterans with claims and appeals of VA pension and disability matters. Before joining the faculty of UD Mercy Law, she was a member of Dykema’s litigation department for more than 20 years, and chaired the Pro Bono and Diversity Committees. An advocate of pro bono activities, she is a member and past co-chair of the State Bar’s Pro Bono Initiative, and was awarded the 2002 Cummiskey Award for pro bono service. She is an accredited VA attorney, and admitted to practice at the Court of Appeals for Veterans Claims.
