As the number of disabled U.S. veterans increased due to the wars in Iraq and Afghanistan, of concern has been if disabled veterans are suitably compensated for their loss. When it comes to financial compensation, veterans often receive more than adequate compensation, according to a report by the Rand Corporation.
Disabled veterans are compensated at a rate that is slightly higher than the earnings they would make, on average, if they were not disabled, RAND says.
“Disability payments, the tax-free status of those payments, and the ability of veterans with disability ratings of 50 percent or greater to receive disability and retirement payments concurrently exceed average lost earnings,” the RAND report states. Another RAND report found that compensation for disabled veterans exceeds losses by an average of 107 percent.
The Missing Part of the Equation
However, disability payments don’t take into account the higher earnings of former officers, making their disability earnings proportionally less. Disability payments also neglect to consider other factors related to earnings potential including individual training, experience, and pre-injury earnings RAND said.
A consequence of generous disability compensations to disabled veterans is that it may encourage veterans not to return to work when they are able. The existing resources that help veterans return to work are “poorly coordinated, difficult to navigate, and fail to track key metrics that could be used to evaluate programs, design new ones, and mitigate unintended consequences such as disincentive effects,” the report noted.
For the families whose service member died in combat, recurring benefits replace an estimated two-thirds of lost earnings. When recurring and lump sum benefits are combined, they can offset lost earnings by about 120 percent on average. Families can receive recurring monthly benefits from the Department of Defense (DoD), the Veterans Administration (VA), and the Social Security Administration (SSA).
A different RAND study proposed that military compensation should be reformed. In particular, that DoD disability benefits should compensate for the loss of a military career, and VA benefits should compensate for other losses. The authors proposed measuring the value of a lost military career, using it as a standard, then calculating this value for each year of service.
