How a Veterans Disability Settlement Can Affect a Divorce Case

Jim's 58 year old client is permanently disabled from his service in the military. He receives a monthly pension benefit from the Department of Veterans Affairs.

He would like to know if a verdict of a juror will affect his VA benefits. It won't. However, it will have an impact on the other sources of income he earns.

Can I Receive Compensation for an Accident?

If you have served in the military, and are permanently disabled as a result of injuries or illnesses, you could be eligible for a veterans disability settlement. This settlement can help you receive compensation for your medical bills, lost wages, and other expenses resulting from your injury or illness. The type of settlement you can get will depend on whether the condition is service-connected or non-service connected, which VA benefits you qualify for, and how much your accident or injury will cost to treat.

For example, Jim is a 58-year veteran who was diagnosed with permanent disabilities following two years of service in the Vietnam War. Jim does not have enough space for work to be eligible for Social Security Disability benefits, however, he can claim the VA Pension which offers free medical care and cash according to his financial need. He wants to determine if a personal accident settlement would affect his ability get this benefit.

The answer will depend on whether the settlement is in the form of either a lump sum or structured settlement. Structured settlements are the ones that are paid over a long period of time rather than as a single payment, and the amount paid by the defendant is used to offset any existing VA benefits. A lump sum payout will likely alter any existing benefits as the VA considers it a tax-deductible income and will annually increase it. In any case, if there are excess assets remain after the twelve-month period when the settlement is annualized, Jim could reapply for the pension benefit, but only if his assets fall below a certain threshold that the VA is able to agree establishes financial need.

Do I really need to hire an Attorney?

Many spouses, service members and former spouses are confused about VA disability compensation and the impact it has on financial issues in a divorce case. Some people believe that the Department of Veterans Affairs' compensation payments are able to be divided like a pension from a military service in a divorce or that they are "off limits" in calculation of child support and Alimony. These misconceptions can result in financial mistakes which can have serious consequences.

While it is possible to make an initial claim for disability benefits on your own, most disabled veterans require the assistance of a skilled attorney. A veteran's disability attorney can examine your medical records to gather the necessary evidence to make a strong case to the VA. The lawyer can also help to file any appeals that you require to secure the benefits you deserve.

Additionally, the majority of VA disability lawyers don't charge fees for consultations. The government also pays the lawyer directly from the amount of retroactive benefits. This is an advantage of the Equal Access to Justice Act. The fee agreement should clearly specify the percentage of retroactive benefits to be paid to your lawyer. For example your fee agreement may specify that the government will pay the attorney up to 20% of the retroactive benefits or pay. Any additional amounts will be your the responsibility of the attorney.

Can I Garnish My VA Benefits?

The VA pays a monthly amount of compensation to disabled veterans disability law firms. The payments are meant to compensate for some of the consequences of illnesses, disabilities or injuries sustained or aggravated due to a veteran's military service. The benefits for veterans with disabilities are subject to garnishment just like any other income.

Garnishment permits a court order that an employer or government agency deduct cash from the pay of an individual who owes an obligation and pay it directly to a creditor. In the event of a divorce garnishment can be used for child or spousal care.

However, there are certain situations where disability benefits may be repaid. The most common scenario is that of a veteran who has waived his retirement from the military in order to receive disability compensation. In these situations the pension portion that is allocated to disability compensation can be garnished in order to fulfill the family support obligations.

In other situations the benefits of a veteran can be garnished to pay for medical expenses or past-due federal student loans. In these instances, a court can go directly to the VA for the information they need. It is vital for disabled veterans to work with a reputable attorney to ensure that their disability benefits are not being snatched away. This can prevent them from having to rely on payday lenders and private loans.

Can I Represent Myself in a Divorce Case?

VA disability settlements are a tremendous aid to veterans and their families. However, they come with their own set of complications. If a veteran gets divorced and receives a VA settlement and is eligible, they should be aware of what this might do to their benefits.

In this regard the most important question is whether disability payments are considered to be assets that can be divided in a divorce. This issue has been settled in a variety of ways. A Colorado court of appeals ruling found that VA disability payments were not property and therefore could not be divided this way. The U.S. Supreme Court ruled in Howell, that garnishing a veteran’s VA disability payments for Alimony was against the USFSPA.

Another concern with this topic is the treatment of disability benefits to children for maintenance and support. The USFSPA and the Supreme Court both forbid states from counting disability payments as income for these purposes. Some states have different methods. For instance, Colorado adds up all sources of income to determine how much in support a spouse will need and then pluses up the disability benefits to take into account that they are tax-free.

Finally, it is important for veterans to be aware of how their disability compensation will be affected if they get divorced and how their spouses who divorced them can take advantage of their benefits. By being knowledgeable about these questions, veterans can guard their earnings and avoid any unintended consequences.