The effect of a personal injury award will depend on the type of benefits you are receiving. If you are receiving veterans' disability compensation, then the amount a veteran receives is not based on their need and will not be impacted by any settlement. Veterans pension benefits, on the other hand, are needs-based benefits. A veteran’s assets and income can affect their eligibility, so a settlement could indeed jeopardize the pension benefits.
These matters can be further complicated depending on whether a settlement is a lump sum amount or a structured settlement. The Federal Medical Care Recovery Act (FMCRA) also gives the federal government the right to recover medical expenses incurred for the medical care of an injured beneficiary when there is a liable third party. The FMCRA does provide an exception for service-connected disabilities, so the VA or TRICARE may waive recovery rights or seek a compromise.