GPSolo Magazine - January February 2005
An Attorney’s Guide to Veterans’ Rights and Benefits
With nearly 25 million veterans now in the United States, it is likely that attorneys will frequently provide them legal services. Veterans have unique entitlements to monetary and program benefits that can extend to their parents, spouses, and children. In order to effectively counsel these veterans and their family members, lawyers must be able to identify potential veterans’ issues and be knowledgeable about laws and regulations that govern this area of law.
Although veterans’ law is a specialized practice area, it has many connections to other areas of law. For example, if an attorney is conducting a real estate transaction with a veteran, it is helpful to be familiar with the provisions of the home loan guaranty program of the Department of Veterans Affairs (VA). Similarly, it could be crucial for an attorney handling a veteran’s employment matter to understand the system for awarding preferences to veterans seeking federal, state, and local employment. An attorney handling a bankruptcy case for a veteran should be knowledgeable about whether the veteran’s retirement and VA compensation are subject to federal and state taxation.
This article is intended to serve as a brief introduction. The VA provides an array of programs that are not covered in this article, and only the most common benefit programs and scenarios are referenced here. All VA compensation figures provided in this article are given at the 2004 rates; the VA had not yet published its 2005 compensation rates at the time this issue went to press.
The Road from Servicemember to Veteran
Many servicemembers leave the military service after fulfilling a contractual service obligation or reaching a longevity service retirement. A minority of soldiers is administratively discharged prior to the conclusion of their obligation for a variety of reasons. Servicemembers who are injured or become seriously ill and are no longer fit for duty are usually granted either a medical discharge or medical retirement.
A servicemember is ordinarily eligible for retirement after 20 years of honorable military service. Upon retirement from active duty, the servicemember receives retirement pay, which is based on rank, length of service, and historical base pay rates. Length of service retirement is subject to federal taxation, but some states do not tax military retirement. Military retirement paid for disabilities incurred in combat, field training, or other hazardous activities, which will be indicated on discharge orders, is not subject to federal taxation; however, individual states may still consider this to be taxable income. A retired servicemember and his or her family remain eligible for the military’s health insurance and can use military commissaries, post exchanges, golf courses, and other facilities on stateside military installations.
A servicemember who becomes injured or seriously ill during his or her military service to a degree that renders him or her no longer fit for duty will be referred for a disability evaluation. If the servicemember is 30 percent or more disabled, he or she is given a temporary or permanent retirement, based on the stability of the injury or illness. If the servicemember is placed on temporary retirement, the servicemember receives no less than half of his or her retired base pay and will be periodically reevaluated within five years for a permanent determination of status as fit for duty, unfit for duty with severance pay, or medical retirement. A determination of “medically unfit for duty” with a disability rating of less than 30 percent results in a lump-sum severance payment based on years in service and pay grade. Servicemembers who undergo medical disability evaluation are provided counsel if they opt for a formal hearing, either to contest the decision that they are unfit for duty, or to disagree with the disability rating. A servicemember is permitted to retain private counsel at his or her own expense for the formal hearing.
A veteran is someone who served on active duty in the military, naval, or air service and who was discharged or released from the service under conditions other than dishonorable. Reservists or Guardsmen who had been mobilized or called up for active duty are considered veterans. Different VA programs have varying requirements for length of active military service or give priority to disabled veterans. For all VA programs, length-of-service requirements are waived for servicemembers discharged for disabilities incurred in military service.
When they separate from active duty, servicemembers receive a Department of Defense (DD) Form 214, the universally accepted proof of veteran status. This document contains important information such as a veteran’s dates of service, awards, training, rank, combat experience, characterization of discharge, and a notation if the discharge was for disability, if applicable.
Many attorneys and military personnel offices formerly advised clients to file a copy of their DD Form 214 with their local courthouse in order to safeguard this valuable document. Unfortunately, some servicemembers are still being advised to publicly file this document, even though the sensitive information in this document could make them victims of identity theft. Strongly advise your clients not to follow this outdated practice. In addition, ask your older clients whether they filed a copy of their DD Form 214; if they did, request that they remove it from public records.
Disabled Veteran Status
Certain programs administered by the VA and the federal government are available only to veterans who incurred illness or injury in the line of duty. In 2003, the VA provided disability, pension, and death benefits to 3.4 million veterans. Although final figures are not yet available, it is estimated that approximately 2.8 million veterans received VA compensation for service-connected disabilities or a disability pension in 2004.
In order to be eligible for these VA programs, a veteran must first file a claim with the VA. A veteran can file a claim himself or herself. Veterans seeking assistance with their claims can use the free services of one of the 46 congressionally chartered veterans service organizations. These organizations often have offices within the VA’s regional offices. The VA adjudication system is intended to be nonadversarial; therefore, veterans are not allowed to hire attorneys at the early stages of their claims. However, a private attorney is permitted to advise or represent a client on a pro bono basis regarding the breadth of VA programs and the client’s entitlement to specific VA benefits. An attorney cannot accept compensation for representing a client on such a matter until after the Board of Veterans’ Appeals has rendered a final decision.
The VA uses the Schedule for Rating Disabilities in order to adjudicate veterans’ service-connected disabilities. This schedule lists disabling conditions in 10 percent increments of severity ranging from 0 percent to 100 percent. Disabilities not listed in the schedule are rated by analogy. VA compensation is not subject to state or federal taxation. Veterans with a rating of 30 percent or more receive additional compensation for each additional dependent. Because veterans cannot receive both full VA compensation and military retirement, retired veterans will have the amount of their VA compensation offset from their taxable retirement income. A new law initiated the phase-in of “concurrent receipt” of both VA disability compensation and military retirement, which allowed some retirees with 20 years or more of service to begin to collect both military retirement and a portion of VA compensation. In addition, brand-new legislation eliminated the phase-in of “concurrent receipt” for 100 percent service-connected disabled military retirees with 20 or more years of service.
Many veterans are eligible for preference in federal employment. State and local agencies often extend this preference, as well.
Five-point preference. Five-point preference is particularly useful for veterans seeking employment with the federal government. Veterans’ hiring preference is also given in downsizing, otherwise known as “reductions in force.” This preference applies particularly to veterans who served in a war declared by Congress or in a campaign or expedition for which a campaign medal has been authorized. In addition, any veteran who served on active duty (not for training) during the following periods is entitled to this preference: April 28, 1952, to July 1, 1955; August 2, 1990, to January 2, 1992; and for more than 180 consecutive days, any part of which occurred after January 31, 1955, and before October 25, 1976. Officers retired at or above the rank of major or lieutenant commander are not eligible for this preference.
Ten-point preference. Service-connected disabled veterans are eligible for a ten-point civil service preference. Disabled veterans included in this group are permanently medically retired veterans; Purple Heart medal recipients, regardless if they have received a VA disability rating; anyone with a VA-rated service-connected disability, even rated at 0 percent; and the mothers and spouses of deceased veterans and totally and permanently disabled veterans. In addition, a 30 percent or more disabled veteran is eligible for a temporary noncompetitive appointment in federal positions that can be converted to a career position. Attorneys should remember that disabled veterans are entitled to the protections granted by the Americans with Disabilities Act.
Vocational rehabilitation. To be eligible for vocational retraining, a veteran must have at least a 20 percent service-connected disability or a 10 percent service-connected disability with a serious employment handicap. The VA will evaluate eligible veterans to determine suitable vocational rehabilitation services and a living allowance. The VA will also provide the expenses for higher education, technical school, a certificate program, or technical programs to assist the transition of a veteran into the workforce.
Dependency and Indemnity Compensation
Dependency and Indemnity Compensation (DIC) payments are made to unremarried surviving spouses of veterans, single minor children, and students who are college-age children of veterans who died while on active duty or from a service-connected disease or injury.DIC payments, at the current rate of $967 per month, are also made to survivors of veterans who were totally disabled by service-connected conditions at the time of their death, in certain circumstances. Payments can be made in these instances if the veteran was totally disabled for ten years preceding his or her death, if he or she had the rating for five years following discharge from the military service, or if the veteran was a former prisoner of war who died after September 30, 1999, and was continuously rated as totally disabled for a year prior to death.
Veterans are eligible for health care at VA health facilities. There are eight priority groups established largely based on the service-connected disability rating. A veteran’s priority group is determinative in whether he or she is responsible for co-payments for outpatient and inpatient care and prescription medication. Regardless of priority group, veterans are provided no-cost treatment for their service-connected disabilities. Veterans who are service-connected disabled at 50 percent or greater are entitled to medical services for the treatment of any disability, including disabilities that are not service connected.
Attorneys should be aware that eligibility for VA health care is an important option when planning with clients. For example, veterans who are 70 percent or more disabled or otherwise unable to care for themselves because of service-connected disabilities may be entitled to admission to a VA nursing facility. This is a valuable option when conducting estate planning with the family of a veteran who does not meet Medicaid guidelines for acceptance into a nursing facility.
The VA offers veterans home loans that require no down payment. A veteran must obtain a certificate of eligibility from the VA and get approval for a specific loan limit. There are varying time-in-service requirements, depending on the era of service and whether the veteran served as an officer or enlisted servicemember. Veterans of the Persian Gulf War era, which began August 2, 1990, and is ongoing, are eligible for VA home loans if they completed 24 months of active duty, or the full period of active duty (at least 90 days of a reserve call-up), or were granted a hardship or early discharge. A reservist who has not been called up for active duty is eligible for a VA home loan after six years of selected reserve service.
The VA limits the amount of closing costs and origination fees lenders can charge, as well as the appraisal fees. The VA does not require private mortgage insurance and prohibits lenders from requiring it. The VA assesses a funding fee, which ranges from 0.5 percent to 3.30 percent of the loan amount, depending on the type of VA loan and whether it is a first or second VA loan. This fee is waived if the veteran has a compensable service-connected disability. The current loan ceiling, with the VA’s guaranty of $60,000, is $240,000. Recently, numerous members of Congress have offered legislation to increase the VA home loan ceiling to above $300,000.
While servicemembers and Reservists are still in the military service, they can enroll in Servicemembers’ Group Life Insurance (SGLI), a low-cost term life insurance program that provides coverage up to $250,000. The premiums are static and are not contingent on age.
Following separation from the military service, each veteran who was discharged under conditions other than dishonorable is given the opportunity to convert his or her SGLI into a Veterans’ Group Life Insurance (VGLI) term life insurance policy. If a newly discharged veteran enrolls immediately after his or her discharge, he or she will automatically be granted approval for a VGLI policy; current health status, history of past illness, smoking, and service-connected disabilities will not be factored into policy rates. The VGLI premiums are higher than those of SGLI and are age-contingent; however, this policy provides payment for death incurred in acts of war, terrorism, and ultra-hazardous activities, which is of interest to some veterans who engage in high-risk employment or recreational activities. Although the rates are less competitive than those offered by many private insurers, the program allows some disabled veterans the opportunity to acquire life insurance when they otherwise might not be able to do so.
Service-disabled veterans who are rated for a disability also have the opportunity to purchase basic Service-Disabled Veterans Insurance (S-DVI). Within two years of receiving service connection for a disability, these veterans can purchase up to $10,000 in coverage. A policyholder who becomes totally disabled can apply for a waiver of premiums on his or her basic S-DVI policy and request a $20,000 supplemental S-DVI policy.
The VA administers several education programs for veterans and their dependents, aside from its vocational rehabilitation programs. Veterans separating from active duty have ten years from their release date from active duty to use their educational benefits. Reservists generally have ten years to use the programs from their last date in the Selected Reserve. Veterans can extend these time limits in some circumstances, such as when service-connected disability precludes the use of educational benefits.
In limited circumstances, servicemembers are permitted to transfer their education benefits to one or more dependents. Such servicemembers must work in critical career specialties and will incur additional service obligations in exchange for the ability to transfer these benefits.
The Montgomery GI Bill is available to veterans who entered active duty after June 30, 1985, and contributed $100 per month for 12 months. Unlike other VA-administered programs, veterans must have received an “honorable” discharge to receive this educational benefit; discharge characterizations such as “general” and “under honorable conditions” render a veteran ineligible for this program. Individuals with service obligations greater than two years currently receive $985 per month for full-time studies and $492.50 per month for half-time studies. This program is not available to veterans commissioned through the service academies, and there are limitations for veterans commissioned through the Reserve Officers Training Corps.
The Veterans Educational Assistance Program is available for veterans who entered active duty after December 31, 1976, but before July 1, 1985. Veterans who participated in this program made contributions up to $2,700 while in service. The VA will match these contributions on a $2 to $1 basis. Unused contributions are refunded to the veteran. The veteran must have received a discharge for conditions other than dishonorable.
The Dependents’ Educational Assistance Program is offered to the spouses and children between ages 18 and 26 of totally and permanently disabled, deceased, or missing veterans. Spouses have time limitations in which to use their benefits. Beneficiaries may receive up to $788 per month in educational benefits.
A disability pension is available for veterans who meet income requirements and are no longer able to work because of a permanent and total disability that is not service-connected. Qualifying veterans must have served for at least 90 days on active duty, with at least one day being during wartime. This pension is distinguished from the VA’s “total disability rating based on individual unemployability” (TDIU) compensation, which is an unemployability payment based on service-connected disabilities.
Death and Burial Benefits
If a veteran dies of a service-connected condition, a $2,000 allowance is payable to his or her survivors. Otherwise, a $300 burial and funeral expense and $300 funeral plot allowance are available.
Veterans also are entitled to burial in a VA national cemetery. Only veterans who die while on active duty or are retired from a military service are entitled to in-ground internment at Arlington National Cemetery, although there are columbarium spaces available for honorably discharged veterans. Veterans are entitled to a headstone or marker free of charge from the VA, even if they are not buried in a national cemetery. In addition, federal law requires, at a family’s request, that a deceased veteran be afforded appropriate military funeral honors, which include the folding and presentation of the U.S. burial flag and the playing of “Taps.”
Correction of Military Records
Attorneys may represent veterans before the military services’ boards for correcting perceived injustices in their military records. A veteran challenging the characterization of his or her discharge should appeal to the corresponding service’s Discharge Review Board (DRB) if he or she raises the appeal within 15 years of discharge. Such boards do not have the authority to adjudicate decisions of general courts martial or medical discharges. However, DRBs can amend other discharges. A veteran should appeal to his or her service’s Board for Correction of Military Records (BCMR) within three years of discovery of an error, unless it is in the interest of justice to go forward with the appeal beyond three years. The service’s BCMR is effectively an appeal to the service’s secretary, and the BCMR has the authority to “correct an error or remove an injustice,” including upgrading a discharge adjudicated by a court-martial. There is no provision, should the veteran’s appeal prevail, for the payment of attorney fees and expenses to the prevailing party.
Veterans have the right to appeal the denial of benefits. Following a decision regarding a disability rating, compensation amount, education benefit, or other VA benefit program, a veteran has one year from the date of that decision to file a notice of disagreement to the VA regional office, or medical center, in some instances, that issued the decision. The issuing VA office, following receipt of the veteran’s notice of disagreement, will send the veteran a statement of the case, which contains pertinent facts, laws, and regulations used by the VA to adjudicate the case. In order to perfect the appeal, the veteran must submit a substantive appeal within 60 days of the mailing of the statement of the case, or within a year of the claim, whichever date is later.
The claim is then adjudicated by the Board of Veterans’ Appeals in Washington, D.C. The veteran can also request a local hearing by a traveling board of that body at his or her local regional office or can have a hearing via videoconference. The Board of Veterans’ Appeals is the final agency appellate review for veterans’ claims.
Veterans can appeal decisions to the U.S. Court of Appeals for Veterans Claims, an Article I court established in 1989. Veterans have 120 days to appeal decisions of the Board of Veterans’ Appeals. At this point, veterans can retain private attorneys to represent them in their claims for benefits and compensation.
Captain Leslie C. Rogall (Ret.) served in the U.S. Army Judge Advocate General’s Corps prior to her medical retirement owing to injuries sustained in a training accident. She is an appellate attorney for the Disabled American Veterans in Washington, D.C. She can be reached at email@example.com.