Introduction

The federal government, through Department of Veterans Affairs (VA), supports a number of benefits for qualified former members of the Armed Forces. Some of these benefits are targeted to veterans who, in the course of their service, incurred or aggravated an injury or contracted a disease, qualifying them as service-disabled veterans.

This report discusses major benefits that are available to service-disabled veterans through the Veterans Benefit Administration (VBA). In some cases, the report may omit smaller VA programs.¹ This report divides benefits into four categories:

• 1. Disability Compensation is a monthly payment for veterans who have been determined to have a service-connected disability.
• 2. Veteran Readiness and Employment benefits typically support service-disabled veterans in obtaining and maintaining suitable employment.
• 3. Housing grants and benefits can assist veterans in modifying their homes to accommodate a service-connected disability.
• 4. Other grants and benefits are available to qualified subsets of service-disabled veterans, including grants for automobiles, or clothing.

Table 1 summarizes the programs discussed in this report. As the table shows, the programs vary in both funding levels and the number of beneficiaries served.

Programs Not Included in This Report

In addition to the programs described in this report, service-disabled veterans also are typically eligible for programs that are available to the broader veteran population, including health care. This report does not discuss benefits that are available through the Veterans Health Administration (VHA) to both service-disabled and nonservice disabled veterans.²

Definition of a Service-Disabled Veteran

To be considered a veteran with a service-connected disability, a former member of the Armed Forces must first meet the statutory definition of veteran. As provided in statute, a veteran is "a person who served in the active military, naval, air, or space service, and who was discharged or released therefrom under conditions other than dishonorable."³ In general, to be considered a veteran for the purposes of most federal benefits, an individual must have served a minimum period of active duty, other than active duty for training; served the full period for which the person was called to active duty; or incurred a service-connected disability while on active duty or active duty for training.

A service-connected disability is a physical or mental injury or condition that was "incurred or aggravated" in the line of military duty and that results in a disability.⁴ A service-connected disability need not be connected to combat or service during a period of war. In addition, a disability incurred or aggravated while receiving VA-sponsored medical treatment or vocational rehabilitation is considered service-connected.

A disability is based on the inability of "the body as a whole, or of the psyche, or of a system or organ of the body to function under the ordinary conditions of daily life including employment."⁵

Disability Rating

The VBA determines a disability rating (from 0% to 100%, in 10% increments) for a veteran's disability using the Veterans Affairs Schedule for Rating Disabilities (VASRD). The VASRD is a guide for evaluating injuries and diseases veterans incurred during military service; it is divided by the various systems in the human body and included in the Code of Federal Regulations (C.F.R.).⁶

For example, for an eye-related disability,

• 38 C.F.R. §§4.75-4.79 provides information on how to evaluate various ailments or injuries that affect the function of the eye(s).
• 38 C.F.R. §4.79 provides the specific schedule that assigns a disability rating (0% to 100%) for each specific condition and set of symptoms and other factors.

To continue the eye example, if a veteran has a detached retina, this condition could be rated from 10% to 60% based on the schedule. For example,

• "With documented incapacitating episodes requiring at least 1 but less than 3 treatment visits for an eye condition during the past 12 months," then the rating would be 10%; or
• "With documented incapacitating episodes requiring 7 or more treatment visits for an eye condition during the past 12 months," then the rating would be 60%.

If a veteran has more than one rated disability, then the ratings are not added together but rather combined using the formula provided in regulation.⁷ If a veteran believes his or her disability has worsened, he or she may ask for a reexamination to increase the rating. VA has the authority to reexamine veterans who receive disability benefits at any time when VA determines there may be a need to verify the continued existence or current severity of the disability. However, if VA determines the veteran's disability has improved, it can reduce the veteran's disability rating.⁸

Veterans Disability Compensation⁹

Veterans Disability Compensation (VDC) is a monthly, tax-free, cash payment to a veteran with a service-connected disability. The payment is determined by the veteran's disability rating, and if the veteran has a 30% or higher disability, the veteran's benefit is adjusted for the number of dependents (if any) a veteran has, including a spouse.¹⁰

Eligibility

A veteran is eligible for VDC if the veteran has a service-connected disability rated as at least 10% disabling. The veterans disability rating may be elevated to 100% if

• the veteran has a rating of at least 60% for one disability; or
• the veteran has two or more disabilities with one disability rated at least 40% and a combined rating of at least 70%; and
• is unable to work at a "substantially gainful occupation" due to service-connected disabilities.¹¹

If the veteran meets the above disability rating and is unable to secure or maintain gainful employment, it is called Individual Unemployability (IU) and the veteran's disability compensation is paid at the 100% level.¹²

Benefits

VDC is paid as a monthly, tax-free, cash benefit and increases with a higher disability rating.¹³ For example, in 2022, a single veteran with no spouse or dependents is eligible for a monthly VDC benefit of $142.29 for a 10% rating; $893.43 for a 50% rating; and $3,106.04 for a 100% rating. For those veterans with a 30% or above disability rating and a spouse or other dependents, the veterans' benefits will be increased accordingly.¹⁴ Veterans whose disability rating is less than 30% are not eligible for an increase in their monthly benefit for a spouse or dependents.

VDC benefits are not automatically adjusted for annual cost-of-living increases. However, Congress generally passes legislation annually to increase VDC benefits using the Social Security cost-of-living adjustment (COLA).¹⁵

A VDC beneficiary may also receive additional Special Monthly Compensation (SMC) if his or her disability results in a loss or loss of use of an extremity or organ or if the disability renders him or her housebound or in need of daily aid and attendance by another person. Various types of extreme disabilities qualify for SMC,¹⁶ including but not limited to "the anatomical loss or loss of use of one or more creative organs, or one foot, or one hand, or both buttocks, or blindness of one eye."¹⁷ The severity of the disability or combination of disabilities determines the compensation.¹⁸

Veteran Readiness and Employment¹⁹

The Veteran Readiness and Employment (VR&E) program provides employment-related services to veterans with a service-connected disability and an employment handicap.²⁰ The program also provides independent living services for qualified veterans who may not be able to seek employment.

Eligibility

To be entitled to VR&E benefits, a veteran must have both

• a qualified disability rating; and
• a qualifying employment handicap determined by a VA vocational rehabilitation counselor (VRC).

A veteran with a disability rating of 20% or more is entitled to VR&E benefits if the VRC determines the veteran has an employment handicap. A veteran with a disability rating of 10% may qualify for benefits only if the VRC determines the veteran has a serious employment handicap.

In general, a veteran must complete a VR&E program within 12 years of separation from the military or within 12 years of the date the VA notifies the veteran that he or she has a compensable service-connected disability.

Benefits

An entitled veteran works with a VRC to develop a plan for attaining suitable employment and the services necessary to realize that plan. The VR&E program supports a wide range of costs associated with completing an employment plan, including tuition, fees, books, supplies, and supportive services. If the veteran requires training or education to become employable, the veteran receives a subsistence allowance while enrolled in training. In cases where employment is not possible, the VR&E program may provide independent living services or supplies or equipment related to independent living.

VR&E benefits are generally limited to 48 months, although the benefit period can be extended in certain circumstances.

Housing Grants and Benefits²¹

Several VA grants are available to assist veterans who have service-connected disabilities with their housing-related needs. VBA operates the Specially Adapted Housing Program, consisting of two subgrants. The program provides grants to veterans and servicemembers with certain service-connected disabilities to assist them in constructing, purchasing, or remodeling homes to fit their needs. VHA administers the Home Improvements and Structural Alterations grant to assist veterans in making their homes accessible.

Specially Adapted Housing²²

Within the Specially Adapted Housing Program are two similarly-named grant programs for veterans: (1) the Specially Adapted Housing grant (SAH, or Section 2101(a) grant, after the section of Title 38 of the U.S. Code) was designed to assist veterans with mobility impairments; and (2) the Special Housing Adaptation grant (SHA, or Section 2101(b) grant) was originally designed to assist veterans who were blind, and currently assists veterans who have lost the use of both hands.²³ Both of these adapted housing programs are also available to veterans with severe burn injuries or to make changes to the home of a family member with whom a veteran is residing temporarily (known as the Temporary Residence Adaptation (TRA) grant).²⁴ Effective beginning October 1, 2020, a veteran may use the SAH and SHA grants up to six times within the benefit guidelines discussed in the following subsections.²⁵

Specially Adapted Housing Grants

Eligibility

SAH grants are available to veterans with permanent and total service-connected disabilities, with the exception of blindness, which requires permanent but not total disability, who satisfy the statutory disability criteria of having²⁶

• lost (or lost the use of) both lower extremities and require the aid of braces, crutches, canes, or a wheelchair for locomotion;
• lost (or lost the use of) one lower extremity together with either (1) residuals of an organic disease or injury or (2) the loss or loss of use of one upper extremity, resulting in the required use of a cane, crutches, braces, or wheelchair for locomotion;
• lost (or lost the use of) both upper extremities such that they cannot use their arms at or above the elbows;
• blindness in both eyes with 20/200 visual acuity or less in the better eye with use of corrective lenses;²⁷ or
• severe burn injuries.²⁸

SAH grants are also available to veterans with a permanent service-connected disability who have lost (or lost the use of) one or more lower extremities in which the veteran's balance and movement is so affected they require braces, crutches, canes, or a wheelchair for ambulating.²⁹ This disability must have occurred on or after September 11, 2001, and the VA Secretary may not approve more than 120 applications in this category per year.³⁰

In addition, by regulation, the disability requirement for SAH grants is satisfied for veterans with service-connected amyotrophic lateral sclerosis (ALS), commonly called Lou Gehrig's disease.³¹

Benefits

The benefit levels for SAH grants are established in statute.³² The statute also provides that the VA Secretary is to increase benefit levels each year based on a residential home cost-of-construction index.³³ In the future, beginning October 1, 2030, veterans may apply for additional SAH grants beyond the statutory benefit level as adjusted by VA. Maximum additional SAH grants may not exceed half of the adjusted statutory benefit level and the application must be made at least 10 years after a previous SAH grant.³⁴

For FY2022, the VA has set the maximum SAH benefit, adjusted for costs of construction, at $101,754; the maximum benefit level for a veteran temporarily residing in a family member's home (TRA grant) is $40,983.³⁵ Subsequent TRA grants in excess of the adjusted statutory benefit level are not available.

The statute further provides that the SAH grant not exceed a total percentage of the project cost, generally 50% of the cost to acquire, construct, or remodel housing.³⁶

Special Housing Adaptation Grants

SHA grants are available to veterans who may need to modify their homes, but perhaps not to the degree required for veterans eligible for SAH grants. The SHA grant can be used for a veteran's own home or for a veteran's family member's home if the veteran is living there temporarily or indefinitely. This differs from the SAH grant, which is not available for a veteran living with a family member indefinitely.

Eligibility

SHA grants are available to veterans with the following service-connected disabilities³⁷

• a permanent and total disability that
• includes the loss or loss of use of both hands; or
• is due to a severe burn injury.³⁸

Benefits

Similar to SAH grants, SHA benefit levels are established in statute and updated by VA each year based on a residential home cost-of-construction index.³⁹ For FY2022, VA has set the maximum SHA benefit for a veteran's own home or a family member's home in which the veteran is indefinitely residing at $20,387.⁴⁰ The SHA grant also allows for multiple uses in the same way as the SAH grant. Beginning October 1, 2030, a veteran may apply for a subsequent grant in excess of the adjusted statutory benefit level. Veterans are eligible to apply at least 10 years after a previous grant, and the grant may be up to half the amount of the adjusted statutory benefit level.

The FY2022 maximum benefit for a veteran temporarily residing in a family member's home (TRA grant) is $7,318. Subsequent TRA grants in excess of the adjusted statutory benefit level are not available.

Home Improvements and Structural Alterations Grants

Home Improvements and Structural Alterations (HISA) grants are part of the home health services provided to veterans with both service- and nonservice-connected disabilities. Funds can be provided for home improvements and alterations necessary for the "continuation of treatment for the veteran's disability" (i.e., for home health treatment) or for access to the home itself or essential lavatory and sanitary facilities (i.e., bathrooms, kitchens, and laundry facilities).⁴¹ Funds can be used for more than one alteration, up to a lifetime benefit cap of $6,800 for a service-connected disability, which is not subject to indexing. A VA physician must prescribe and explain the need for any structural improvement or alteration.⁴² A veteran may receive both a HISA grant and either an SHA or SAH grant.⁴³

Eligibility

The HISA grant is available to veterans who qualify to receive VA medical services pursuant to 38 U.S.C. §1710(a).⁴⁴ The amount of benefits available is greater for veterans with a service-connected disability that is rated at least 50% disabling.⁴⁵

Benefits

For veterans with a service-connected disability, the statutory maximum lifetime benefit is $6,800.⁴⁶

Other Grants and Benefits⁴⁷

Automobile and Special Adaptive Equipment Grants

Veterans with certain service-connected disabilities are eligible for one-time grants toward the purchase of an automobile or for financial assistance to purchase adaptive equipment for an existing automobile to make it safe or legal for the veteran's use.⁴⁸

Eligibility

To be eligible for the automobile grant, a veteran must have one of the following service-connected conditions

• loss or permanent loss of use of one or both feet;
• loss or permanent loss or use of one or both hands;
• permanent impairment of vision in both eyes;⁴⁹
• severe burns; or
• ALS (or Lou Gehrig's disease).

To be eligible for adaptive equipment, a veteran must have one of the service-connected conditions listed above or ankylosis (i.e., immobility of the joint) of one or more of the knees or hips.

Benefits

A veteran is eligible for only one automobile grant in his or her lifetime. The current maximum grant is adjusted annually on October 1 based on changes in the Consumer Price Index for all Urban Consumers (CPI-U). Effective October 1, 2019, the maximum rate is $21,488.29. Payment is made to the seller of the automobile.

A veteran may be eligible for adaptive equipment for up to two automobiles during a four-year period. Payments for adaptive equipment may be made to either the seller or the veteran up to maximum amounts set periodically by VHA.

Clothing Allowance Grant

Eligibility

A veteran with a service-connected disability is eligible for an annual clothing allowance if because of the disability he or she

• wears or uses a prosthetic or orthopedic appliance, including a wheelchair, which VA determines is likely to damage the veteran's clothing; or
• uses a prescription skin medication that VA determines causes irreparable damage to the veteran's outergarments.⁵⁰

Benefits

A veteran is eligible for one annual clothing allowance if he or she uses one type of device or medication. A veteran may be eligible for more than one annual clothing allowance if he or she uses multiple devices or medications and multiple outergarments are subject to damage, or one type of outergarment is subject to an increased rate of damage due to the use of multiple devices or medications.

Effective December 1, 2019, the annual clothing allowance is $830.56. This benefit is payable on August 1, 2020. The clothing allowance is not automatically adjusted for annual increases in the cost-of-living. However, the same legislation enacted to increase disability compensation rates usually includes an increase to the clothing allowance using the Social Security COLA.⁵¹

Service-Disabled Veterans Life Insurance (Current Program)

Eligibility

The current Service-Disabled Veterans Life Insurance (S-DVI) program offers life insurance to veterans separated from service under other than dishonorable conditions on or after April 25, 1951, and who have a service-connected disability rating (0%-100%) from VA but who are otherwise in good health.⁵² Good health is defined by regulation as being free from any medical condition that would likely weaken the person's normal physical or mental functions or shorten his or her life.

A veteran must apply for S-DVI within two years from the date he or she is notified that service-connection of his or her disability has been established. The veteran receives a new two-year period of eligibility for each new disability that is established as service-connected.⁵³ VA is scheduled to stop accepting applications for this program on December 31, 2022, as a new program takes effect January 1, 2023.

Benefits

S-DVI provides a variety of term and permanent life insurance plans to eligible veterans. S-DVI policies can be purchased for coverage amounts ranging from $1,000 to $10,000 (in multiples of $500). Title 38, Section 1903, of the U.S. Code specifies that the maximum amount of insurance for National Service Life Insurance policies is $10,000. Thus, the maximum amount of basic S-DVI coverage is $10,000.

Insurance premiums vary by the veteran's age and the type of plan.⁵⁴ VA's S-DVI Insurance and Premium Rates brochure states that the veteran's age for "insurance purposes is not always your actual age. If 6 months or more have passed since your last birthday, you are considered 1 year older."⁵⁵ The brochure also lists the various plans offered through S-DVI, which identifies the premium rates. Veterans can then multiply the monthly rate based on their age and plan by the amount of insurance. Each plan varies by term and the benefit payout.

Totally disabled veterans may be eligible to have their premiums waived.⁵⁶ To qualify for the waiver, a veteran must be unable to maintain gainful employment for six consecutive months prior to age 65 or have certain severe conditions.⁵⁷ These S-DVI policyholders can qualify for a waiver of premiums for basic coverage due to total disability and may apply for $30,000 of supplemental S-DVI if they apply within one-year of receiving the premium waiver.⁵⁸ The premium waiver is only for the basic coverage of S-DVI amount.

S-DVI may be paid in the case of a veteran who did not apply for insurance during the two-year eligibility period due to mental incompetence and who dies before a guardian is appointed or within two-years of such appointment (referred to as Gratuitous S-DVI). An eligible beneficiary must generally apply for Gratuitous S-DVI within two years of the veteran's death. Gratuitous S-DVI is paid as a $10,000 lump sum payment.

Currently, Congress appropriates funds for the program, and then the premiums help cover additional benefit costs, but this, as well as the structure of benefits, is set to change in 2023. The Johnny Isakson and David P. Roes Veterans Health Care and Benefits Improvement Act of 2020 (P.L. 116-315) created one comprehensive insurance structure that would become self-funded through a hierarchy of premiums. Section 2004 of this law is scheduled to transition S-DVI's two part structure—basic and supplemental—into one structure. Veterans can choose their coverage and pay premiums based upon the total coverage, age, etc.

Veterans Affairs Life Insurance (Begins January 2023)

Section 2004 of the Johnny Isakson and David P. Roes Veterans Health Care and Benefits Improvement Act of 2020 (P.L. 116-315) amended the current VA life insurance program by ending S-DVI in its current form and created a new program that VA is calling Veterans Affairs Life Insurance (VALife). VALife is to take effect on January 1, 2023. Veterans currently enrolled in S-DVI are to have a couple of options when VALife becomes effective. Veterans can remain in the S-DVI program and make no changes to their policies, or they can apply for VALife. If the veteran applies for VALife prior to December 31, 2025, he or she can retain S-DVI during the initial two-year enrollment period for VALife.⁵⁹

In addition, Section 2004 includes a provision for those veterans who decide to remain under the old S-DVI program, which is to be referred to as the "Legacy Service." The law does not amend the premiums or the premium waivers for veterans who decide to stay with the Legacy Service instead of switching to the new insurance structure. If the veteran remains under S-DVI, after December 31, 2022, the veteran will no longer be eligible to apply for supplemental insurance, and basic coverage would remain at $10,000. The only way a veteran would be able to receive the higher basic coverage amount ($40,000) under VALife is to apply.

Veterans who are under 80 years old and have a VA disability rating of 0% to 100% will be eligible to apply for VALife and do not have to apply within a specific time limit. The statute states that the VALife policy "does not go into force unless a period of two years elapses" after the enrollment date and so long as premiums are paid by the veteran during the two-year period. This waiting period replaces the need for medical underwriting. The maximum amount of coverage is to be $40,000 but is to be available in lower amounts. All insurance must be in increments of $10,000. Premiums for VALife are to be a fixed rate based upon the amount of coverage and a veteran's age at the time of enrollment. While VA does have a list of its premium rates, the rates are based upon current estimates and may change prior to the scheduled launch of VALife on January 1, 2023.