Military

VA Compensation Rates

There are over 1 million disabled military veterans of the United States Armed Forces. Most disabled veterans receive compensation from the VA. The rates are subject to change every year with the cost of living adjustments.

From last year to 2020, veteran disability compensation increased by 1.6%. The increase is likely to be within the same range for 2021. Given the VA Disability Compensation increase is based on the cost of living adjustment, we will hear more about it in the upcoming months.

Who can receive VA Disability Compensation?

All veterans who have a service-related disability can receive disability compensation. Even if a veteran has only a 10 percent disability, compensation will be given by the Veterans Affairs. As long as the veteran’s disability is related to the service in the U.S. Armed Forces, disability compensation shouldn’t be an issue.

The amount of disability compensation varies depending on many variables. If the veteran has dependents to take care of —the disability compensation will be larger. However, the extra compensation for a dependent spouse, child, or parent is only given to veterans with 30 percent disability or more.

For example, the disability compensation for a veteran with a 30 percent disability with a dependent spouse and a child is $525. This increases to $550 for a disabled veteran with two children. For every child under the age of 18, an additional amount is given to disabled veterans. See the full list of additional amounts and disability compensation for all disabled veterans below.

Before we get to the disability compensation, a veteran must apply for disability compensation. Mainly, two forms are used for this. The application for disability compensation can be made with VA Form 21-526EZ. If the veteran needs to provide additional information regards to the disability status, the claim must be supported with VA Form 21-4138. As soon as the veteran is deemed to be eligible for disability compensation, it will begin the next pay period.

2020 VA Disability Compensation Rates

Soldier holding American flags

There are two main things that affect the compensation rate—the disability rate and the number of dependents. Depending on these, the compensation will be different. Since the dependency status only affects the veterans with 30 percent disability or more, we should present the compensation rates in 2020 separately.

10% to 20% Disability Compensation Rates

Disability RateMonthly Payment
10%$142
20%$281

Since a veteran with a 10% to 20% disability cannot receive additional compensation for dependents, nothing more than the above amounts is given in disability compensation.

30% to 100% Disability Compensation Rates With Children

Disability RateSpouse One ChildSpouse and One ChildFor every additional child under 18For every additional child 18 to 24 in college
30%$486$469$525$25$83
40%$696$673$747$34$111
50%$979$950$1,043$43$138
60%$1,234$1,200$1,311$51$166
70%$1,547$1,507$1,636$60$194
80%$1,795$1,749$1,897$$68$222
90%$2,017$1,966$2,132$77$250
100%$3,279$3,221$3,406$86$277

30% to 100% Disability Compensation Rates With Dependent Parent

Disability RateNo DependentSpouse and One ParentSpouse and 2 ParentsOne ParentTwo Parents
30%$435$527$568$476$517
40%$627$751$806$682$737
50%$893$1,048$1,117$962$1,031
60%$1,131$1,317$1,400$1,214$1,297
70%$1,426$1,644$1,741$1,523$1,620
80%$1,657$1,906$2,017$1,768$1,879
90%$1,862$2,142$2,267$1,987$2,112
100%$3,106$3,418$3,557$3,245$3,384

2021 VA Disability Compensation Increase

The House passed a cost of living adjustment increase for 2021 veteran disability compensation but the increase rate hasn’t been announced yet. Since the cost of living adjustment is based on inflation and consumer spending data from the end of every year, the increase rate will be announced later this year. As soon as the COLA rate for VA Disability Compensation is announced, we will keep you updated.

Is VA Disability Compensation Taxable?

By no means, VA Disability Compensation is taxable. A veteran who’s receiving disability compensation won’t need to include the compensation in their tax return. While the disability compensation isn’t taxable, some of the other benefits veterans receive may be taxable. However, none of the payments made to veterans for disability is taxed.

Having said that, VA Disability Compensation and other benefits aren’t subject to income tax. The only tax subject to disability compensation a veteran should worry about is the state sales tax.

Charles Young

States are the foundation of what this beautiful country was built upon. My writings make up everything about states. This can be taxes, holidays, certain rankings and listings, and more. Click on my bio to learn financial facts about your state.

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