How a Veterans Disability Settlement Can Affect a Divorce Case

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

He wants to know if a jury verdict will affect his VA benefits. The answer is not. But it will have an impact on the other sources of income he has.

Can I get compensation for an accident?

You could be eligible to receive a settlement if you were in the military but are now permanently disabled because of injuries or illnesses. This settlement will allow you to receive compensation for your medical bills, lost wages, and other expenses resulting from your injury or illness. The type of settlement you'll receive depends on whether your condition is service-connected or non-service connected, the VA benefits you are eligible for, and the amount your injury or accident will cost to treat.

Jim who is a 58-year veteran of the Vietnam war, was diagnosed as having permanent disabilities because of his two years of service. He does not have enough work space to qualify for Social Security Disability benefits, however, he can claim an VA Pension that offers cash and medical treatment for free according to his financial need. He wants to find out if a personal injury settlement would affect his ability be eligible for this benefit.

The answer is dependent on whether the settlement is a lump-sum or a structured one. Structured settlements are payments made over a time frame rather than as a single payment and the amount paid by the defendant is calculated to offset any existing VA benefits. A lump sum settlement will probably affect existing benefits since the VA considers it a tax-deductible income and will annually increase it. In either case, if excess assets are left after the period of twelve months when the settlement has been annualized Jim could reapply for the Pension benefit but only if his assets are below a certain threshold that the VA agrees 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 money issues in divorce cases. Some people believe, for instance, that the Department of veterans disability attorney Affairs compensation payments can be split like a military retirement in divorce cases or that they're "off limits" when it comes to calculating child support and alimony. These misconceptions could lead to grave financial errors.

While it is possible to submit an initial claim for disability benefits on your own, the majority of disabled veterans get the assistance of a skilled attorney. A veteran's disability lawyer who is experienced can examine your medical documents and gather the required evidence to make a convincing argument to the VA. The lawyer will also be able to file any appeals that you need to get the benefits you're entitled to.

In addition, the majority of VA disability lawyers charge no fees for consultations. Additionally that the lawyer will normally be paid by the government directly from the retroactive past-due benefits. This is an advantage of the Equal Access to Justice Act. The amount of retroactive past due benefits your lawyer will receive should be clearly outlined in your fee agreement. For instance, a fee agreement can specify that the government will pay the lawyer up to 20% of the retroactive benefits or pay. You will be responsible for any additional amount.

Can I Garnish My VA Benefits?

If a disabled veteran receives compensation from the VA, it comes in the form of monthly payments. The purpose of the payments is to offset some of the consequences of illnesses, disabilities or injuries incurred during or aggravated by the veteran's military service. Like other income sources, veterans disability benefits can be subject to garnishment.

Garnishment permits a court order that an employer or government agency withhold funds from the paycheck of an individual who owes the debt and pay it directly to a creditor. In the event of divorce, garnishment can be used for child or spousal maintenance.

However, there are some situations where disability benefits may be garnished. The most common scenario is veterans who have waived their military retirement to receive disability compensation. In these cases the amount of pension that is devoted to disability payments can be garnished to cover the obligations of family support.

In other situations, a veteran's benefits can be seized to pay medical expenses or Veterans Disability past-due federal student loans. In these instances the court could go directly to the VA to obtain the information they need. It is essential for a disabled veteran to retain a knowledgeable lawyer to ensure that their disability benefits aren't removed. This will help them avoid being forced to rely on private loans and payday lenders.

Can I Represent Myself in a Divorce Case?

VA disability settlements can be an enormous benefit for veterans and their families, however they don't come without their own set-of complications. For example the case where a veteran is divorced and receives a VA disability settlement, they must be aware of how this will affect the benefits they receive.

In this case the most important question is whether disability payments count as assets that can be split in a divorce. This question has been answered in two ways. One is through an Colorado court of appeals ruling that concluded that VA disability payments are not property and therefore cannot be divided as such. The U.S. Supreme Court ruled in Howell, that garnishing a veteran's VA disability payments to pay an alimony payment was a violation of USFSPA.

Another issue related to this subject is how disability benefits are interpreted to determine child maintenance and support. The USFSPA and the Supreme Court both forbid states from counting disability benefits as income to be used for this purpose. Some states have a different approach. Colorado for instance, takes all income sources together to determine the amount required to provide for a spouse. Colorado then adds on disability payments in order to account for their tax-free status.

In the end, it is crucial for veterans to know how their disability compensation will be affected when they get divorced and how their ex-spouses can be able to garnish their compensation. By being informed about these issues, vets can ensure their compensation as well as avoid unintended consequences.