How a Veterans Disability Settlement Can Affect a Divorce Case
Jim’s client, 58 years old, is permanently disabled from his military service. He receives a monthly pension benefit from the Department of Veterans Affairs.
He wants to know if the verdict of a jury will impact his VA benefits. The answer is not. But it will have an impact on his other sources of income.
Do I have the right to receive compensation in the event of an accident?
If you’ve served in the military, and are permanently disabled as a result of injuries or illnesses, you may be eligible for a veteran disability settlement. This settlement will pay you for medical bills, lost income and other costs that resulted from your illness or injury. The type of settlement you will receive will depend on whether or not your injury or illness is service-connected, what VA benefits you are eligible for, and the cost to treat your accident or injury.
For instance, Jim is a 58-year old veteran who was diagnosed with permanent disabilities after two years of service during the Vietnam War. He doesn’t have enough work quarters to be eligible for Social Security disability benefits but the VA Pension benefit that offers cash and free medical care based on financial need. He wants to understand what the implications of a personal injury settlement can affect his ability to get this benefit.
The answer will depend on whether the settlement is in the form of either a lump sum or structured settlement. Structured settlements require payments over time, rather than one single payment. The amount that defendant pays is calculated to offset existing VA benefits. However, a lump sum settlement will probably affect any existing benefits because the VA considers it a tax-deductible income and will annually increase it. In the event that there are any excess assets remain after the twelve-month period when the settlement is annualized Jim could be eligible for a new Pension benefit, but only if his assets are below a threshold that the VA accepts as establishing financial need.
Do I need to employ an attorney?
Many service members, spouses and former spouses are confused about VA disability compensation and the impact it has on money issues in divorce cases. There are many other reasons, but some people think that the Department of Veterans Affairs’ compensation payments can be divided like a pension from a military service in divorce or are “off limits” in the calculation of child support and Alimony. These misconceptions can lead to financial mistakes that can have grave consequences.
It is possible to submit a claim for disability benefits yourself however, the majority of disabled veterans disability lawyer disability law firms (read) will require the help of a qualified lawyer. A veteran’s disability attorney can review your medical records to collect the evidence necessary to present a convincing argument before the VA. The lawyer will also be able to file any appeals you may require to receive the benefits you are entitled to.
Most VA disability lawyers do not charge for consultations. The government also pays the lawyer directly from the award of retroactive benefits. This is a benefit of the Equal Access to Justice Act. Your fee agreement should clearly specify the percentage of retroactive benefits that will be paid to your lawyer. A fee agreement could say that, for instance, the government would give the attorney up to 20 percent of retroactive benefits. The attorney is responsible for any additional costs.
Can I Garnish My VA Benefits?
If a disabled veteran receives compensation from the VA the compensation is paid in the form of monthly payments. The funds are intended to help offset the effects of disabilities, diseases or injuries that are sustained or aggravated by the veteran’s military service. Like all income, the veterans disability benefits are subject to garnishment.
Garnishment allows a court order that an employer or government agency deduct funds from the paycheck of a person who owes an amount and then pay it directly to a creditor. In the event of divorce, garnishment can be used for child or spousal maintenance.
However, there are certain situations where disability benefits could be refunded. The most frequent scenario involves a veteran who waived their military retirement to receive disability compensation. In these instances the amount of pension that is allocated to disability pay can also be garnished to pay for family support obligations.
In other instances veterans’ benefits could be seized to pay medical expenses or past due federal student loans. In these cases the court can go directly to the VA for the information they require. It is crucial for disabled veterans to find a competent lawyer to ensure that their disability benefits aren’t garnished. This can prevent them from having to rely on payday lenders and private loans.
Can I Represent Myself in a Divorce Case?
VA disability settlements can be a major aid to veterans and their families, however they come with their own set of issues. If a veteran is divorced and receives a VA settlement, he or she should know what this will do to the benefits they receive.
One of the major issues in this context is whether or not the disability payments count as divisible assets in divorce. This issue has been addressed in a couple of ways. A Colorado court of appeals ruling declared that VA disability payments were not property and could not be divided this way. The U.S. Supreme Court ruled in Howell, that garnishing a veteran’s VA disability payments for an alimony payment was a violation of USFSPA.
Another issue related to this issue is how disability benefits are interpreted for purposes of child support and maintenance. Both the USFSPA, as well as the Supreme Court, prohibit states from counting disability benefits as income. However, some states have adopted a different approach. For instance, Colorado adds up all sources of income to determine how much in support a spouse requires and then pluses up the disability payments to take account that they are tax free.
It is also vital that veterans understand how divorce affects their disability compensation and how their spouses who divorced can garnish their compensation. By knowing about these issues, veterans disability law firm can protect their earnings and avoid any unwanted consequences.
