Military veterans who served even decades ago might not be aware of all the benefits available to them today. Some older vets haven’t heard about new or recently modified benefits…and others don’t realize that they’re even eligible or have sworn off interacting with the Department of Veterans Affairs (VA) after being infuriated by its red tape. But the VA is trying to improve, and the benefits can be well worth the trouble for vets and their families.
Disability compensation—even decades after service. Vets who are permanently injured during their service know that they likely qualify for disability benefits. But older vets who develop medical problems long after leaving the military may not realize that they could qualify if their service contributed to their problem. Example: An older vet might develop knee or back pain due in part to marching with a heavy pack decades earlier…or experience hearing loss due to exposure to loud military vehicles or ordnance. The key is to link your condition to your service, and this can be done a number of ways. A Veterans Service Officer (VSO) can help you with this—you can find a nearby VSO at Benefits.VA.gov/vso/index.asp.
Vets need not be completely or even mostly disabled to qualify, nor must the disability be entirely the result of their service, though these factors will affect the amount of compensation received.
In addition to monthly disability payments of anywhere from a few hundred to a few thousand dollars, vets might qualify for…
Home Improvements and Structural Alterations (HISA) grants. These can provide up to $6,800 to help cover the costs of certain modifications to the vet’s primary residence made necessary by the disability. See Prosthetics.va.gov/psas/HISA2.asp for details.
Monthly payments for the vet’s surviving spouse and/or dependents. The family of a disabled veteran sometimes can continue receiving benefits following the veteran’s death. This is another reason for vets to consider applying even if they themselves don’t need the money—their loved ones might one day be in financial need.
Reminder: Some vets don’t apply for disability benefits because they don’t want to take the money away from vets who are in greater financial need. But there is no fixed pool of funds for vets’ disability compensation, so one vet’s claim never takes money from another.
Access to the Veterans Affairs Life Insurance (VALife) program. Through a new program, vets age 80 and under who receive disability compensation also can purchase up to $40,000 of whole life insurance. Unlike with most life insurance, there’s no medical underwriting required, so a vet who is in rapidly declining health could use this program to leave an extra $40,000 to his surviving spouse or heirs tax-free. See Benefits.va.gov/insurance/valife.asp for details.
To apply for disability compensation: Vets must submit VA Form 21-526EZ, Application for Disability Compensation and Related Compensation Benefits. The application process can be complex, but help is available. Veterans Service Organizations including the American Legion (Legion.org/veteransbenefits)…Veterans of Foreign Wars (VFW.org/assistance)…and Disabled American Veterans (DAV.org/get-help-now) can help. State Departments/Divisions of Veterans Affairs/Veterans Services might provide support as well, plus information about any state-based vet-assistance programs. Or contact the VA directly at 800-827-1000.
Free checking accounts. The Veterans Benefits Banking Program (VBBP) has partnered with banks and credit unions to offer vets no-monthly-fee accounts. See VeteransBenefitsBanking.org for a list of institutions.
Caveat: These free accounts often are available only to vets who receive monthly VA disability or pension benefits into the account via direct deposit. Participating institutions sometimes will waive this requirement, particularly for vets who have other recurring direct deposits.
Home loan guarantees that provide below-market mortgage rates—even for refinance loans. Through the VA’s Home Loan Guaranty program, vets often can qualify for mortgage rates that are approximately one-half percentage point below those they otherwise would receive. This program also lets vets avoid the costs of private mortgage insurance. It can be used for home purchases and refinancing—in fact, the VA’s Interest Rate Reduction Refinance Loans offer a streamlined refi process.
Vets who tried to access VA home loan guarantees in the past sometimes were frustrated by the program’s sub-$500,000 loan limits. But the limits have been largely eliminated, though certain ones still apply to vets who already have active VA-backed home loans and/or who have previously defaulted on VA-backed home loans.
This program is open to most veterans—only 181 days of military service is required, or 90 days of active service during wartime. Call the VA Home Loan toll-free number, 877-827-3702, or visit Benefits.va.gov/homeloans to learn more.
Need-based pension safety net. When older vets hear the word “pension,” they tend to think of the well-known “military retired pay” earned by veterans who served 20 years or longer. But there’s also a need-based pension program for vets age 65 and up who served as little as 90 days, as long as at least one day of that service occurred during wartime. But: The wartime requirement is less restrictive than it seems.
These need-based pensions are best thought of as safety nets for vets, not as pensions in the traditional sense. A vet’s net worth must be below $150,538 to qualify, an amount that’s adjusted to keep pace with inflation. That net-worth figure includes both assets and income, but the value of the vet’s primary residence, car and personal effects can be excluded…and vets can subtract their unreimbursed medical expenses. Add up all of those exclusions, and vets don’t have to be living in poverty to qualify.
The size of the pension varies from around $16,000 per year to more than $30,000, depending on factors such as whether the vet has dependents and he/she is housebound and/or requires assistance with activities of daily living. Substantial paperwork is required to apply, including filing VA Form 21P-527EZ, Notice to Veteran of Evidence Necessary to Substantiate a Claim for Veterans Pension Benefits. The organizations mentioned earlier can assist with this process.
Helpful: Vets need not have served in or near a combat zone to qualify for the “wartime service” requirement. “Wartime” date ranges are relatively expansive—August 2, 1990 to present, the Gulf War era…August 5, 1964 to May 7, 1975, the Vietnam era (plus November 1, 1955 to August 4, 1964 if service occurred within the nation of Vietnam)…June 27, 1950 to January 31, 1955, the Korean conflict era…and December 7, 1941 to December 31, 1946, the World War II era.
Fiduciaries for vets who can’t manage their own finances. If a veteran receiving VA benefits, such as a pension or disability benefits, is no longer capable of handling his financial affairs, that vet’s family can request that the VA arrange for an independent fiduciary to handle everything from paying the vet’s bills to selecting his insurance.
Caution: Having a loved one declared incompetent to manage his own affairs is not to be taken lightly, but it might be the best option if the vet is making bad financial decisions that endanger his future.
Arranging for a fiduciary through the VA has advantages over finding help with a vet’s financial affairs on one’s own. The VA conducts background checks of its fiduciaries and periodic examinations of their performance, reducing the odds that the person put in charge of the vet’s finances will exploit that position. Families of vets can call 888-407-0144 to learn more about the VA Fiduciary Program.
Eligibility for many veterans’ benefits is determined in part by the vet’s “character of discharge.” Vets who received dishonorable discharges often don’t qualify.
But: Vets who fall short of the discharge criteria can request that the VA conduct a “Character of Discharge Review,” which could conclude that the vet should have access to a benefit despite his discharge. Example: A vet who served honorably for years before receiving an other-than-honorable discharge for punching an officer during a bar fight might be allowed access to a benefit due to the overall positive nature of his service.
For more information, go to Benefits.va.gov/benefits/character_of_discharge.asp.
