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Saturday, June 23, 2007

Disability Compensation Gap Higher for PTSD vs. Physically Wounded Vets

From the Montgomery [AL] Advertiser:

...[A]ccording to a draft study on disabled veterans' incomes prepared for the Veterans Disability Benefits Commission, ...[t]he typical veteran is awarded disability pay at about age 55. The present value of their diminished lifetime earnings is about $150,000 and over their remaining years they will draw about $145,000 in VA disability compensation, nearly matching average earning loss.

But the fairness of disability payments unravels when actual earning losses are broken out by the veteran's age when payments start, the severity of disability and whether conditions are physical or mental. Earnings capacity is affected far more dramatically by mental disorders, CNA found.

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CNA noted that a 25-year-old veteran who returned from war 100-percent disabled from physical wounds and was rated as unemployable by the VA, began receiving $28,352 a year in disability compensation, using 2005 rates. That amount was more than $11,000 short of the $39,447 needed annually to stay even with nondisabled peers, the study found.

VA paid the same $28,352 to a 65-year-old veteran rated as "IU" or individual unemployable. But if that older veteran became disabled for the first time at 65 based on latent service-connected conditions, after working a full career, VA actually is over compensating him, the study found. That's because that older veteran, with his working life behind him, would need only $10,223 to close an earnings gap with peers who nondisabled veterans. "So, while on average (VA compensation is) about right, there are age groups for which it over or under compensates," said Christensen. The imbalance occurs in part because the disability compensation system takes no notice of age or work experience when payments begin.

The earnings gap is more pronounced for veterans who suffer mental disorders such as post-traumatic stress, CNA reports. A 25-year-old veteran rated 20 to 40 percent disabled from PTSD received on average VA disability compensation $4629 in 2005. Yet to match the earnings of nondisabled veterans of the same age, that PTSD veteran would need almost $11,500 a year in VA compensation for the rest of his or her life, the study found.

By contrast, the 65-year-old veteran newly diagnosed with PTSD, also rated 20 to 40 percent disabling, faces a smaller earnings gap with peers --only $4,070. It's a gap fully closed by that VA compensation of $4,629.

Related links can be found in the commission's June 7-8, 2007 public meeting minutes [pdf]. The Commission is seeking public comments [download pdf form] through July 10, 2007, to be considered for its next scheduled meeting on July 18-20 at the Washington Plaza Hotel in Washington, D.C. [download pdf details].

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