Disability compensation is a monetary benefit paid to Veterans who are disabled by an injury or illness that was incurred or aggravated during active military service. These disabilities are considered to be service-connected.
Disability compensation varies with the degree of disability and the number of a Veteran’s dependents, and is paid monthly. Veterans with certain severe disabilities may be eligible for additional special monthly compensation. The benefits are not subject to federal or state income tax.
The payment of military retirement pay, disability severance pay and separation incentive payments, known as SSB (Special Separation Benefits) and VSI (Voluntary Separation Incentives) affects the amount of VA compensation paid to disabled veterans.
To be eligible, the service of the Veteran must have been terminated through separation or discharge under conditions other than dishonorable.