Congressional Budget Office (CBO) Analysis Reveals Income Disparity Among Veterans with and without Disability Ratings

In December 2023, the Congressional Budget Office (CBO) completed a study evaluating whether there is an income disparity between veterans who receive VA disability compensation and those who don’t. The answer is “yes.”

Key Facts & Stats About Veteran Disability Compensation

• Approximately 6.2 million, or 30% of all veterans, received VA disability compensation in 2023, which equated to $142.9 billion of taxpayer money paid to veterans.
• The number of veterans and the average disability payment per veteran have significantly increased over the past 20 years.
• The annual spending per veteran receiving such compensation has increased even faster, more than doubling from FY 2000 to the present. 
• Male veterans with a VA disability rating earn 16%, or $10,200, less per year than male veterans without a disability rating. 
• Veterans with a disability rating of 70% or more had annual earnings that were significantly lower, 38% less, than veterans with no disability rating. 
• The most common rating for veterans in FY 2022 was 100%, equating to 20% of all ratings.
• Further findings indicate that veterans with a disability rating of 10% to 20% earned approximately the same as veterans with no rating, and veterans with a 30% to 60% rating earned about 6% less.

It is important to note that in a study completed several years ago, veterans with a service-connected disability were found to be less likely to be among the working poor than veterans with no service-connected disability (3.6% compared to 5.0%). It’s an interesting data point to consider in light of the CBO report because it underscores the critical role of VA disability compensation in veterans’ financial stability, particularly those with higher disability ratings.

Bottom Line: Veterans with Higher Disability Ratings, Particularly 70% or More, Experience Markedly Lower Earnings

The CBO publishes proposals for reducing the federal deficit each year to accomplish this task. Their recent work on veterans centered on the differences between working-age males aged 22 to 54 from FY 2017 to 2019. The CBO estimated earnings by considering different characteristics (age, marital status, racial or ethnic group, education level, and region of residence) among veterans. 

The report highlights significant differences in the earnings and personal income between veterans who receive VA disability and veterans who do not receive disability compensation. One of the overall findings of the report was that male veterans with a VA disability rating earn $10,200 thousand less per year than male veterans without a disability rating. Further, veterans with a disability rating of 70% or more had annual earnings that were significantly lower, 38% less, than veterans with no disability rating. When you take all the data together, the conclusion is that veterans with higher disability ratings, particularly 70% or more, experience markedly lower earnings.

There are a variety of reasons that veterans with a disability rating earned less than veterans without a disability rating: 

• 20% of veterans with a disability rating were not in the workforce.
• Some veterans may have poor health, which affects their ability to work.
• Some veterans may have chosen jobs that paid a lesser wage. 
• Some veterans may have decided not to work because of the additional income they received from the VA or for other reasons.

Clearly, this report supports the significance of VA disability compensation and will hopefully convince lawmakers to avoid supporting legislation that would decrease veteran benefits. The VA disability lawyer team at Gang & Associates fully appreciates the importance of VA disability compensation and benefits for our veterans who have honorably served our nation.

Contact a VA Disability Lawyer for a Free Evaluation of Your Case

Our sole mission at Gang & Associates is to help veterans whose VA disability claim was denied or received a lower-than-expected rating. We also assist veterans who need to increase their rating for a current rated disability. We are a VA-accredited law firm that caters only to veterans. Your VA disability payments are an entitlement that plays a pivotal role in your way of life, and we are here to ensure that you get the VA compensation you deserve. Contact us for a review of your case, and let us guide you through your options free of charge.