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 receives a monthly pension from the Department of Veterans Affairs.

He wants to know if an award from a jury will impact his VA benefits. It won't. It will, however, affect his other sources of income.

Can I Receive Compensation for an Accident?

If you have served in the military, and are permanently disabled due to injuries or illnesses, you could be eligible for a veteran disability settlement. This settlement will pay you for medical bills, lost income, and other expenses resulting from your injury or sickness. The kind of settlement you'll receive depends on whether your condition is service-connected or non-service connected, what VA benefits you are eligible for, and the amount your accident or injury will cost to treat.

Jim who is a 58-year old Vietnam veteran, was diagnosed as having permanent disabilities because of his two years of service. He does not have enough space for work to be eligible for Social Security Disability benefits, however, he is able to claim a VA Pension that provides cash and medical care for free based on his financial need. He would like to find out if a personal injury settlement would affect his eligibility to get this benefit.

The answer is dependent on whether the settlement is in the form of a lump sum or a structured settlement. Structured settlements are settlements that are paid over a long period of time instead of in one payment, and the amount paid by the defendant is calculated to offset any existing VA benefits. In contrast, a lump sum payout will likely impact any benefits already in place because the VA considers it a tax-deductible income and will annually increase it. In either case, if excess assets are left after the twelve-month period after the settlement is annually recalculated, Jim could reapply for the Pension benefit but only if his assets are less than a minimum threshold that the VA determines to be a financial need.

Do I have to hire an attorney?

Many spouses, military personnel, and former spouses have questions about VA disability benefits and their effect on financial issues during a divorce. Some people think, for instance, that Department of Veterans Affairs compensation payments are split like an army retirement in divorce cases or that they're "off limits" in calculating child support and alimony. These misconceptions could lead serious financial errors.

While it is possible to submit an initial claim for disability benefits on your own, the majority of disabled veterans Disability law firms get the assistance of a professional lawyer. A veteran's disability attorney can examine your medical records to gather the evidence required to prove your case in front of the VA. The lawyer can also file any appeals that you may need in order to receive the benefits you are entitled to.

The majority of VA disability lawyers do not charge for consultations. The government also pays the lawyer directly from the benefit of retroactive 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 stated in your fee agreement. For instance the fee agreement could specify that the government will pay the lawyer up to 20% of retroactive benefits or pay. You are responsible for any additional sums.

Can I Garnish My VA Benefits?

If a disabled veteran receives compensation from the VA it is received in the form of monthly payments. The purpose of the payments is to offset some of the consequences of illnesses, disabilities or injuries that are sustained or aggravated by a veteran's military service. As with all income, veterans disability benefits can be subject to garnishment.

Garnishment lets a court order that an employer or government agency stop funds from the paycheck of a person who has a debt and send it directly to the creditor. In the event of divorce, garnishment can be used to pay child or spousal support.

There are situations where the benefits of a veteran could be garnished. The most common scenario involves those who have renounced their military retirement to get disability compensation. In these cases, the amount of pension that is allocated to disability pay can be garnished for family support obligations.

In other cases, a veteran's benefits could be seized to pay for medical expenses or federal student loans that are over due. In these cases, a court may be able to direct the case to the VA to obtain the necessary information. A disabled veteran should seek out an experienced attorney to safeguard their disability benefits. This can prevent them from having to rely on payday lenders or private loans.

Can I Represent Myself in a Divorce Case?

VA disability settlements can be a huge help to veterans as well as their families. However they also come with their own set of complications. For instance the case where a veteran is divorced and receives a VA disability settlement, they need to know what this means for their benefits.

In this regard one of the major issues is whether disability benefits are considered assets that can be divided in a divorce. The question has been answered in two ways. A Colorado court of appeals decision decided that VA disability payments were not property and therefore could not be divided this way. Another option is a U.S. Supreme Court ruling in Howell that ruled that garnishing the veteran's VA disability payments to pay for an alimony payment is a violation of the Uniformed Services Former Spouses Protection Act (USFSPA).

Another concern that is related to this issue is how disability benefits are treated for purposes of child support and maintenance. Both the USFSPA and Veterans disability law firms the Supreme Court, prohibit states from counting disability benefits as income. Certain states employ a different approach. Colorado is one example. It adds all sources of income together to determine the amount required to support a spouse. It then adds disability income in order to account for their tax-free status.

Finally, it is important that veterans disability lawsuits understand how their disability benefits will be affected if they become divorced and veterans disability law firms how their spouses who divorced them can be able to garnish their compensation. By being informed about these issues, vets can protect their compensation as well as avoid unintended consequences.