What Happens to My VA Benefits When I Retire?

When veterans reach retirement age and begin collecting Social Security, what happens to their disability benefits, total disability individual unemployability (TDIU), permanent and total (P&T) benefits, or Special Monthly Compensation (SMC)? What about military retirement pay? 

In most cases, veterans can receive Social Security retirement benefits and VA compensation at the same time. In this article, we explore if and how retirement will affect your eligibility for VA benefits.

Can I get TDIU benefits and retirement benefits?

Total disability individual unemployability (TDIU) benefits are for veterans who cannot keep or obtain gainful employment. You are eligible if you are unemployed because of your service-connected mental and/or physical disabilities.

TDIU benefits pay the same amount as a 100% VA disability rating, which is $3,831.30 a month. Veterans who have dependent children and parents receive extra compensation.

A veteran receiving TDIU benefits can also receive Social Security retirement benefits. A veteran who has reached retirement age who is collecting Social Security disability insurance (SSDI) can continue receiving their TDIU benefits. 

Do P&T benefits affect retirement benefits?

P&T disability ratings are awarded when a veteran’s service-connected disabilities are not expected to improve. P&T ratings are protected from any future rating reductions.

Your rating decision letter will indicate if your benefits are permanent. 

If you are awarded permanent TDIU benefits, it will not affect your eligibility for Social Security retirement benefits.

A 100% rated P&T disability does not guarantee that you will receive Social Security retirement benefits. However, veterans with 100% P&T may ask for their application for Social Security retirement benefits to be expedited.

Can I get military retirement pay and retirement benefits?

Veterans can receive military retirement pay after 20 years or more of service. The pay is based on your length of time in service and is calculated at 2.5% times your highest 36 months of basic pay. Military retirement benefits are taxable while VA disability benefits and VA pensions are not.

Veterans can receive military retirement pay and Social Security retirement benefits at the same time. Veterans can also be entitled to Concurrent Retirement and Disability Pay (CRDP), which allows military retirees to receive both military retired pay and VA disability compensation.

Can I get SMC and retirement benefits?

Special Monthly Compensation (SMC) benefits are available to veterans, spouses of veterans, surviving spouses of veterans, and parents of veterans with certain needs or disabilities. Veterans who have lost or lost the use of specific organs or body parts are eligible for SMC benefits.

The Social Security Administration does not count VA compensation when calculating your Social Security retirement payments. SMC benefits are included in VA compensation, so you can receive SMC benefits and Social Security retirement benefits at the same time. 

The future of veterans benefits

If you follow the news, you may have heard about an idea that would let veterans benefits expire at retirement. Another effort would permanently preserve them. Both ideas have been discussed in different forms many times before, but so far neither has come to pass.

In 2020, the Congressional Budget Office (CBO) suggested ending TDIU payments for veterans when they turn 67, which is Social Security retirement age. The idea was included in a report of options for reducing the federal deficit, a list of 83 non-binding suggestions for decreasing federal government spending and increasing revenue.

One of the latest attempts is the Protecting Benefits for Disabled Veterans Act which was proposed in the U.S. House of Representatives in July 2021. The bill would make TDIU benefits permanent for elderly veterans who are also receiving Social Security retirement payments. It would guarantee that veterans applying for TDIU benefits would not be denied based on their age for retirement benefits. At the time this article was published, the bill was still in a House committee and had not been scheduled for a hearing.

Again, these are only proposals. They are not the first ideas that have been floated that would change VA disability benefits, and with the everlasting conversation about federal spending, they certainly won’t be the last.

Is it worth applying for VA disability or TDIU if I’m retired?

Yes, it is worth applying even if you are retired or getting ready to retire. Disability and TDIU benefits are not based on age or income. A veteran can be retired and still get other benefits, including TDIU benefits, permanent TDIU benefits, SMC benefits, and military retirement pay.

How Woods and Woods can help

If you are unsure about your eligibility for any type of VA disability compensation, we can help. Navigating the world of VA benefits is confusing enough without navigating the world of Social Security and retirement too. We can help you file an initial VA disability claim at no charge, and we only charge a fee if we win your appeal. Call us at (812) 426-7200 or fill out our online contact form today and let us help you get the benefits you deserve.