How a Veterans Disability Settlement Can Affect a Divorce Case

Jim's 58-year-old client is permanently disabled because of his time in the military. He is able to receive a monthly pension from the Department of Veterans Affairs.

He wants to know if the jury's verdict will affect his VA benefits. The answer is not. However, it will have an impact on his other income sources.

Can I receive compensation for an accident?

You could be eligible for a settlement if served in the military but are now permanently disabled as a result of injuries or illnesses. This settlement will pay you for medical bills, lost income and other costs that resulted from your illness or injury. The kind of settlement you will receive will depend on whether your illness or injury is service-connected, what VA benefits you are eligible for, and the cost to treat your accident or injury.

Jim is a 58 year veteran of the Vietnam war was diagnosed with permanent disabilities as a result of his two years of service. He does not have enough work space to be eligible for Social Security disability benefits but He does have a VA Pension benefit, which offers cash and free medical assistance based on financial need. He would like to determine if a personal accident settlement would affect his ability be eligible for this benefit.

The answer depends on whether the settlement is in the form of an unintentional lump sum or a structured settlement. Structured settlements require installments over time, rather than one lump sum payment. The amount paid by the defendant is calculated to offset the existing VA benefits. A lump sum settlement will affect any existing VA benefits as the VA will annually calculate and consider it income. If Jim has surplus assets after the settlement is annualized, he can reapply to receive the Pension benefit. However the assets he has to be under a limit that the VA has set to establish financial necessity.

Do I require an attorney?

Many service members, spouses and former spouses are confused about VA disability compensation and its impact on money issues in divorce cases. Some people think, for instance, that the Department of Veterans Affairs compensation payments can be split like a military retirement in divorce proceedings or that they're "off limits" when it comes to calculating child support and Alimony. These misconceptions can result in financial mistakes which can have serious consequences.

It is possible to file an application for disability benefits on your own however, the majority of disabled veterans would require the help of a qualified lawyer. A veteran's disability attorney will examine your medical records to gather the evidence needed to present a convincing case to the VA. The lawyer can also file any appeals you might require to receive the benefits you are entitled to.

In addition, the majority of VA disability lawyers do not charge fees for consultations. The government also pays the lawyer directly from the award of retroactive benefits. This is an advantage of the Equal Access to Justice Act. The amount of retroactive past-due benefits that your lawyer will be paid should be clearly stated in your fee agreement. For instance an agreement on fees could provide that the government can pay the attorney up to 20% of the retroactive benefits or award. Any additional amounts will be your to pay.

Can I Garnish My VA Benefits?

The VA pays monthly compensation to disabled veterans. The payments are intended to alleviate the effects of injuries, illnesses or disabilities that were sustained or aggravated during the course of a veteran's service. As with all income, veterans disability benefits can be subject to garnishment.

Garnishment lets a court order that an employer or Veterans Disability government agency deduct money from the pay of a person who owes an obligation and pay it directly to a creditor. In the case of divorce, garnishment could be used to pay for spousal support or child support.

However, there are certain situations where disability benefits may be refunded. The most common scenario involves a veteran who waived their military retirement in order to receive disability compensation. In these instances, the amount of pension allocated to disability payments may be garnished for family support obligations.

In other circumstances, veteran’s benefits can also be garnished to pay for medical expenses or federal student loans that are over due. In these instances, a court can go directly to the VA for the information they need. A disabled veteran should hire an experienced attorney to safeguard their disability benefits. This will help them avoid being forced to rely on payday and private loan lenders.

Can I Represent Myself in a Divorce Case?

VA disability settlements are a great aid to veterans disability lawsuit and their families. However, they come with specific complications. If a veteran gets divorced and receives a VA settlement it is important to be aware of the impact this could have to the benefits they receive.

A major issue in this regard is whether disability payments count as divisible assets in divorce. The issue has been resolved in a variety of ways. One is through an Colorado court of appeals decision that found that VA disability payments are not property and therefore cannot be divided in this way. The U.S. Supreme Court ruled in Howell that garnishing a veteran’s VA disability benefits for Alimony was against the USFSPA.

Another issue related to this issue is how disability benefits are treated in the context of child maintenance and support. Both the USFSPA and the Supreme Court, prohibit states from counting disability benefits as income. However, some states have adopted a different approach. For instance, Colorado adds up all sources of income to determine the amount in support a spouse will need and then adds the disability payments to take account that they are tax free.

It is also crucial that veterans understand the impact divorce has on their disability benefits and how their spouses who divorced could slash their benefits. If they are aware of these issues, veterans can safeguard their income and avoid unwanted consequences.