January 2009 

Disability Compensation — 2009 Rates 

10 percent . . . $123 60 percent . . . $974 

20 percent . . . 243 70 percent . . . 1,228 

30 percent . . . 376 80 percent . . . 1,427 

40 percent . . . 541 90 percent . . . 1,604 

50 percent . . . 770 100 percent . . . 2,673 

 Effective 12/1/08

Additional Payments for Dependents 

Veterans whose service-connected disabilities are rated at 30 percent or more are entitled to 

additional allowances for dependents. Depending upon the disability rating of the veteran, 

monthly allowances for a spouse range from $44 to $150 and for a dependent child, from 

$30 to $101. Additional amounts are provided for each additional child, and there is a 

higher scale for children in school after age 18. 

Other Major Factors Affecting Payment Levels 

Adjustments to rates are based on a number of factors in addition to dependents. Among 

factors that can have a significant effect on amounts are: 

• Veterans with severe service-connected disabilities may receive 

compensation at a basic rate as high as $7,650 per month. Various special 

monthly compensation rates apply when a veteran experiences loss or loss of 

use of one or more limbs; loses one or more of the senses of sight, hearing or 

speech; or experiences loss of a reproductive organ or its use, or loss of 

breast tissue by a female veteran. 

• Allowances may be made for veterans requiring aides, such as bedridden 

people who need assistance with eating, bathing or certain other activities of 

daily living. This adjustment is referred to as “aid and attendance.” 

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• Veterans whose service-connected disability leaves them unable to maintain 

gainful employment may meet criteria for allowances at the 100 percent 

compensation rate under a benefit called “individual unemployability.” A 

veteran with a single service-connected disability may be eligible if the 

veteran's disability is rated at 60 percent or more. A veteran with multiple 

disabilities may be eligible if the veteran has a combined rating of 70 percent 

or more and at least one of the disabilities is individually rated 40 percent or 

higher. 

Facts About VA Disability Compensation 

Disability compensation for veterans is not subject to federal or state income tax. About 80 

percent of veterans receive their VA benefits by direct deposit, which VA recommends for 

security reasons. 

Veterans are rated at increments of 10 percent reflecting degree of disability. As federal 

regulations summarize the underlying principle, “The percentage ratings represent as far as 

can practicably be determined the average impairment in earning capacity resulting from 

such diseases and injuries and their residual conditions.” 

The largest category of veterans on the compensation scale is at 10 percent disability ($123 

per month), with 782,000 veterans at this rate at the beginning of fiscal year 2009 among 

the total 2.9 million veterans receiving disability compensation. 

The criteria for rating the severity of various disabilities are available online at 

http://www.access.gpo.gov/nara/cfr/waisidx_07/38cfr4_07.html. As medical knowledge, 

laws and procedures change, VA regularly publishes proposed changes to these criteria in 

the Federal Register for public comment before a final regulation is adopted. 

Where a veteran has more than one disability, the percentages are not simply added 

together to produce a new rating. Instead, a formula described in federal regulations 

calculates the overall rating. 

A veteran may be rated at zero percent, meaning there is evidence of a service-connected 

condition, but it does not impair the veteran. An example is a minor scar. This zero 

percent rating, though not compensable, can be beneficial, since it may raise the veteran’s 

priority in other VA programs, such as health care eligibility. In addition, it may be 

reviewed for a higher rating if the condition worsens. 

A veteran may have a number of disabilities each evaluated as zero percent which produce 

a 10 percent combined disability rating, entitling the veteran to disability compensation. At 

the beginning of fiscal year 2009, there were more than 13,000 veterans in the category of 

“compensable zero” ratings. 

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There were 884,500 new and reopened claims requiring a disability rating received from 

veterans in fiscal year 2008, an average of nearly 74,000 claims filed per month. 

Among veterans on the rolls, the largest category of service-connected disabilities is 

musculoskeletal problems, accounting for about 40 percent of all disabilities. This includes 

such problems as impairment of the knee and arthritis due to trauma. Data on the number 

and type of disabilities are published annually (http://www.vba.va.gov/reports.htm). 

Annual Cost-of-Living Adjustment

A cost-of-living increase is included in the President's budget proposal released early each 

calendar year. It is part of the spending forecast and appropriations request for the ensuing 

fiscal year, a starting point for legislative discussion. However, the actual percentage 

increase is set through a separate bill debated by Congress and usually signed into law the 

following fall. 

Legislators are not bound by any specific annual Consumer Price Index formula, but 

historically have chosen to mirror the percentage given to Social Security recipients. The 

Social Security increase, in turn, is based on a Bureau of Labor Statistics calculation of the 

rise in the consumer price index for urban wage earners and clerical workers (CPI-W). 

Cost of living adjustments become effective December 1 each year and are reflected in the 

payment received by veterans on or about the first day of the new year. Whenever a 

payment falls on a holiday or weekend, as is the case with the January 1 payment each 

year, that month’s payment is issued the last prior business day. 

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