solider in wheel chair

How Secure are your VA Disability Benefits?

VA Disability Benefits are reserved for ill or injured veterans who served our great nation.  Because of veterans’ sacrifices, special laws and rules give veteran disability benefits certain extra protections that other compensation programs do not enjoy.

VA disability benefits are like no other compensation program in the United States.  Although they share some similarities with other programs such as Workers’ Compensation and Social Security Disability, VA disability benefits are unique and more secure in many ways.  This security is codified in 38 U.S.C. § 5301, the VA Benefits Nonassignability and Exempt Status Law (hereinafter referred to as the “Shelter Law”).  Additional securities are guaranteed through VA specific rules and regulations.

A Special Law Can Help Protect Your Benefits

The Shelter Law specifically states that payments of benefits made to, or on account of, a beneficiary of the VA disability benefits program[1] “shall be exempt from taxation, shall be exempt from the claims of creditors, and shall not be liable to attachment , levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary.”[2]  Courts have further interpreted these protections to cover payments even after they have been deposited into a bank account, because they remain available on demand for the support and maintenance of the veteran, his or her dependents, or his or her survivors.[3]  This is powerful protection.  These benefit payments are also not assignable unless specifically authorized by law, even if the veteran voluntarily attempts to assign them.  An example of such assignment not specifically authorized by law is a veteran attempting to give an attorney a lien on his benefit payments[4] or a veteran attempting to have the VA deduct TRICARE premiums from his benefit payments.[5]

The United States is permitted, however, to pursue claims for such payments as long as the claims arise under these same laws, meaning that the US can carve out exceptions to this Shelter Law as long as the US is the claimant and the claims are specifically authorized under the same laws the give rise to the veterans benefits.  An example of this is found in 38 U.S.C. § 5301(d), which states “Notwithstanding subsection (a) of this section, payments of benefits under laws administered by the Secretary shall not be exempt from levy under subchapter D of chapter 64 of the Internal Revenue Code of 1986 (26 U.S.C. 6331 et seq.).”  This allows the US to recoup unpaid federal taxes.  Another example is apportionment.  38 U.S. § 5307 states:

(a) All or any part of the compensation, pension, or emergency officers’ retirement pay payable on account of any veteran may—

(1) if the veteran is being furnished hospital treatment, institutional, or domiciliary care by the United States, or any political subdivision thereof, be apportioned on behalf of the veteran’s spouse, children, or dependent parents; and

(2) if the veteran is not living with the veteran’s spouse, or if the veteran’s children are not in the custody of the veteran, be apportioned as may be prescribed by the Secretary.

(b) Where any of the children of a deceased veteran are not in the custody of the veteran’s surviving spouse, the pension, compensation, or dependency and indemnity compensation otherwise payable to the surviving spouse may be apportioned as prescribed by the Secretary.

(c) If a veteran is not living with the veteran’s spouse, or if any of the veteran’s children are not in the custody of the veteran, any subsistence allowance payable to the veteran under chapter 31 of this title or that portion of the educational assistance allowance payable on account of dependents under chapter 34 of this title may be apportioned as may be prescribed by the Secretary.

This allows the VA to deduct payments to a beneficiary’s family from his or her disability benefits.  It is important to note that these payments are not limited to child support.  The U.S. Supreme Court took this a further step in Rose v. Rose, 481 U.S. 619 (1987).  In Rose, the Court held that a state trial court can jail a veteran held in contempt for failure to pay child support, even if the veteran’s only income is his or her disability benefits.

Time itself can increase disability benefit protections

Any disability, regardless of its rating, that has continued for five years or greater cannot be reduced in rating without a finding of “sustained improvement.”[6] This means “the rating agency will consider whether the evidence makes it reasonably certain that the improvement will be maintained under the ordinary conditions of life.”[7]  Any disability, regardless of its rating, that has continued for ten years or greater cannot have its service-connection severed absent a finding of fraud or the veteran did not have the required length or character of service.[8]  If a disability has been rated at or above a certain level for twenty or more consecutive years, that disability cannot be reduced absent a finding of fraud.[9]

The VA is required to periodically reevaluate the Schedule for Ratings Disabilities in accordance with experience.[10]  The same law that requires this action also protects a veteran’s current disability rating by requiring the VA to continue the veteran’s rating even if such readjustment in the rating schedule would otherwise cause a veteran’s disability rating to be reduced “unless an improvement in the veteran’s disability is shown to have occurred.”[11]

These special protections discussed above are designed to give extra assurances to those who have served or who contemplate serving.  If you have questions or need assistance with a veterans law claim, call Grimes Teich Anderson today at 800-533-6845.

[1] Many of the other benefits awarded to veterans by the VA also enjoy a number of these same protections, subject to special rules.  This Article only covers disability benefits.

[2] 38 U.S.C. § 5301(a)(1).

[3] See Porter v. Aetna Casualty Co., 370 U.S. 159 (1962); Lawrence v. Shaw, 300 U.S. 245 (1937).

[4] See, e.g., Vargas-Gonzales v. West, 12 Vet. App. 63 (1998).

[5] VA Gen. Coun. Prec. 2-2002 (Mar. 5, 2002).

[6] 38 C.F.R § 3.344.

[7] Id. at § 3.344(a).

[8] 38 C.F.R § 1159

[9] 38 U.S.C. § 110; 38 C.F.R. § 3.951(b).

[10] 38 U.S.C. § 1155.

[11] Id.

Posted in
Scroll to Top
Skip to content