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July 5, 2022

VA Disability Compensation vs. Pension – What’s the Difference?

Last updated on December 5, 2022

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VA Disability Compensation vs. Pension

When it comes to veterans’ benefits, there is a lot of confusion about the difference between VA disability compensation vs. pension.

Both are important programs that provide financial assistance to veterans and their families, but they are quite different.

This blog post will discuss the key differences between VA disability compensation and veterans pension so you can understand which program is right for you.



Take advantage of a FREE VA Claim Discovery Call with an experienced Team Member. Learn what you’ve been missing so you can FINALLY get the disability rating and compensation you’ve earned for your service.

The Difference Between a Disability Compensation and a Pension

The two most common benefits that veterans can receive from the Department of Veterans Affairs are VA pension and VA disability compensation. While both benefits provide monthly payments to veterans, there are some key differences between the two.

One key difference is income requirements: To be eligible for a VA pension, a veteran must have a low income. It means that their yearly income must be below a certain threshold set by the VA each year. On the other hand, there is no income limit for disability compensation. A veteran can earn as much money as they want and still receive this benefit.

Service connection is another key difference between VA pension benefits and VA disability compensation. To receive a VA pension, a veteran does not need to have service-connected disabilities. They can be any age and have any discharge from the military (except a dishonorable discharge). However, to receive VA disability compensation, a veteran must have a documented service connection for a disability caused by their time in the military. The VA assigns each disabled veteran a disability rating based on their symptoms and the effects of the disability on the individual’s life.

The payment rates for these two benefits also differ. For VA pension, the maximum amount you can receive is $24,610 annually (rate based on a veteran with no dependents and qualified for Housebound or Aid and Attendance benefits). They may also reduce this amount if the veteran has other sources of income. For VA disability compensation, the maximum amount you can receive as a monthly payment is $3,332.06. (rate based on a veteran with no dependents).

When it comes to age, to receive VA pensions, a veteran must be 65 years or older. There is no age limit for disability compensation, meaning that a veteran can receive this benefit regardless of age.

What Are the Aid and Attendance Requirements?

Veterans who need assistance with day-to-day living activities or are housebound may be eligible for the Aid and Attendance pension.

You may be eligible for this benefit if you get a VA pension and you meet at least one of these requirements.

At least one of these must be true:

  • You need another person to help you perform daily activities, like bathing, feeding, and dressing, or
  • You have to stay in bed—or spend a large portion of the day in bed—because of illness, or
  • You are a patient in a nursing home due to the loss of mental or physical abilities related to a disability, or
  • Your eyesight is limited (even with glasses or contact lenses, you have only 5/200 or less in both eyes; or concentric contraction of the visual field to 5 degrees or less)

The Aid and Attendance pension can help cover the cost of in-home care, assisted living, or nursing home care.

The pension can help pay for home health aides or transportation to medical appointments for homebound veterans.


How Do I Apply for a VA Pension?

You may be eligible for the veterans pension program if you meet these eligibility requirements.

Both of these must be true:

  • You didn’t receive a discharge under dishonorable conditions, and
  • Your yearly family income and net worth meet certain limits set by Congress. Your net worth includes all personal property you own (except your house, your car, and most home furnishings), minus any debt you owe. Your net worth includes the net worth of your spouse.

And at least one of these must be true about you:

  • You started on active duty before September 8, 1980, and you served at least 90 days on active duty, with at least one day during wartime, or
  • You started on active duty as an enlisted person after September 7, 1980, and served at least 24 months or the full period for which you were called or ordered to active duty (with some exceptions) with at least one day during wartime, or
  • You were an officer and started on active duty after October 16, 1981, and you hadn’t previously served on active duty for at least 24 months.

And at least one of these must be true:

  • You’re at least 65 years old, or
  • You have a permanent and total disability, or
  • You’re a patient in a nursing home for long-term care because of a disability, or
  • You’re getting Social Security Disability Insurance or Supplemental Security Income.

If you think you might be eligible for a pension, the first step is to gather the necessary documentation. It includes your military discharge papers, marriage and divorce certificates, medical records, and birth certificates for any dependent children.

Once you have the required documentation, you can apply online or by mail.

You will also need proof of your income and any assets you own.

The application process can often take several months to complete, so getting started as soon as possible is important.

How to Determine Countable Income

The VA offers different benefits to veterans and their families. One of the most important is the veterans pension, which provides financial assistance to qualifying veterans.

The VA looks at their countable income to determine whether a veteran is eligible for the pension. Countable income includes earned income, such as wages from employment, and unearned income, such as interest from investments.

Social security benefits are included in countable income.

The VA uses a complex formula to determine whether a veteran’s countable income exceeds the maximum amount allowed for pension eligibility. Veterans should be familiar with the types of income that are counted and those that are excluded.

By understanding how they assess their income, veterans can ensure they get all the benefits they are entitled to.

We hope this guide has been helpful. We’re insiders and here to walk you through everything you need to know. Remember, if you have any questions, we encourage you to contact us for support.


Frequently Asked Questions

What Is VA Special Monthly Pension?

VA Special Monthly Pension is also known as Aid and Attendance or Housebound. It can help cover the cost of in-home care or assisted living.

One of the requirements under Aid and Attendance is you require help to perform activities of daily living. These include bathing, feeding, dressing, toileting, adjusting prosthetic devices, or protection from environmental hazards. Find the full list of eligibilities here.

One of the requirements under Housebound is you have a single permanent disability evaluated as 100 percent disabling. Because of this, you are permanently confined to your immediate location. Find the full list of eligibilities here. 

You may not receive a pension at the A&A and Housebound rate at the same time.

What Is the Difference Between VA Special Monthly Compensation and Special Monthly Pension?

VA benefits are available to disabled veterans and their surviving spouses. Two of the most common types of benefits are special monthly compensation and special monthly pension.

Special Monthly Compensation (SMC) is a tax-free benefit paid in addition to the regular VA disability compensation to a veteran who, as a result of military service, suffered the loss or loss of use of specific organs or extremities.

Special monthly compensation is paid on top of regular disability compensation, and it is available to veterans with a service-connected disability that makes them unable to work or who need assistance with activities of daily living.

On the other hand, a special monthly pension is available to low-income veterans and their surviving spouses. It is not based on a service-connected disability but rather on the veteran’s needs for assistance.

Can a Veteran Receive a VA Compensation and Pension at the Same Time?

Many veterans are eligible for both a VA compensation and a pension. However, the VA states that “You can’t get VA pension payments and disability compensation at the same time. If you apply for and are eligible for both, we’ll pay you whichever benefit is the greater amount.”

The two programs are separate, but they are both designed to help veterans with their financial needs.

Remember, pension benefits are for wartime veterans. Eligibility is based on financial need. Disability compensation is for veterans with disabilities with documented service connections who served during wartime, peacetime, or both. Eligibility is based on the type and severity of the disability. It isn’t based on net worth or income level.

Veterans may receive a pension if they cannot work due to a service-related injury or illness. On the other hand, compensation is given to veterans who can work but have a service-related disability that prevents them from doing so, according to their disability ratings.

VA Disability Pension vs. Compensation: The Difference

You may be eligible for a disability pension and compensation if you’re a veteran. But what’s the difference between the two? Simply put, a disability pension is a needs-based program, while compensation is based on records of a disability with a service connection. To be eligible for a disability pension, you must have served during a war period and have a low income. You also must be at least 65 years old or disabled with a non-service-connected disability.

On the other hand, compensation is available to any veteran with a disability that is related to their military service (service connection), regardless of their income level or age. In addition, compensation includes money for dependents such as family members in some cases.

What Is the Maximum Annual Pension Rate?

The maximum annual pension rate for a veteran with one dependent is $29,175 (rate if qualified for Housebound benefits or Aid and Attendance benefits). The maximum annual pension rate for a veteran with no dependents is $24,610 (rate if qualified for Housebound or Aid and Attendance benefits).

The maximum annual pension rate for surviving spouses is $19,438 (rate based on surviving spouses with at least one dependent and qualified for Aid and Attendance benefits and you’re the surviving spouse of a veteran who served in the Spanish-American War (SAW). These rates are effective as of 2022 and are subject to change in the future.

The maximum annual pension rate is the maximum amount of money a veteran or their surviving spouse can receive from the VA in pension benefits.

To be eligible for the maximum annual pension rate, a veteran must have served on active duty for at least 90 days, with at least one day during wartime. The maximum annual pension rate is not available to veterans dishonorably discharged from the military.

How Long Does VA Disability Compensation Last?

Generally, disability compensation benefits are paid for the veteran’s lifetime.

However, there are a few exceptions. If your disability has a service connection, it must have been caused by active military service and recorded in your military records. Additionally, your discharge must be honorable.

If you’re receiving benefits for a disability with a service connection, your benefits will continue for as long as your disability persists. Even if your condition improves, you’ll still receive benefits if your VA disability rating is at least 10%.

If you’re receiving benefits for a non-service-connected disability, your benefits will continue as long as you remain disabled and unable to work. If you’re receiving benefits for a dependent child, those benefits will continue until the child turns 18 (or 23 if they attend school full-time).


Most veterans are underrated for their disabilities and therefore not getting the compensation they’re due. At VA Claims Insider, we help you understand and take control of the claims process, so you can get the rating and compensation you’re owed by law.

Our process takes the guesswork out of filing a VA disability claim and supports you every step of the way in building a fully-developed claim (FDC)—so you can increase your rating fast!

If you’ve filed your VA disability claim and have been denied or have received a low rating—or you’re unsure how to get started—reach out to us! Take advantage of a FREE VA Claim Discovery Call. Learn what you’ve been missing—so you can FINALLY get the disability rating and compensation you deserve!

We’ve supported more than 20,000 veterans to win their claims and increase their ratings. NOW IT’S YOUR TURN.


About the Author

Brian Reese
Brian Reese

Brian Reese

Brian Reese is one of the top VA disability benefits experts in the world and bestselling author of You Deserve It: The Definitive Guide to Getting the Veteran Benefits You’ve Earned (Second Edition).

Brian’s frustration with the VA claim process led him to create VA Claims Insider, which provides disabled veterans with tips, strategies, and lessons learned to win their VA disability compensation claim, faster, even if they’ve already filed, been denied, gave up, or don’t know where to start. 

As the founder of VA Claims Insider and CEO of Military Disability Made Easy, he has helped serve more than 10 million military members and veterans since 2013 through free online educational resources.

He is a former active duty Air Force officer with extensive experience leading hundreds of individuals and multi-functional teams in challenging international environments, including a combat tour to Afghanistan in 2011 supporting Operation ENDURING FREEDOM.

Brian is a Distinguished Graduate of Management from the United States Air Force Academy, Colorado Springs, CO, and he holds an MBA from Oklahoma State University’s Spears School of Business, Stillwater, OK, where he was a National Honor Scholar (Top 1% of Graduate School class).

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