In order to qualify for veterans disability benefits, certain criteria must be met. If the VA determines that a veteran qualifies for disability benefits, it assigns the disability a rating to signify the extent of the disability or disease. The disability rating represents the "average detriment to earning capacity" resulting from the disability or disease.
The ratings are assigned in 10% increments, ranging from 0% to 100% disabled. A higher disability rating indicates the veteran has a more severe disability, and therefore receives a higher monthly compensation payment.
When a veteran has more than one disease or disability, the disability ratings are not simply added together (for example, a 40% disability rating plus a 20% disability rating does not equal a total 60% disability rating.) Instead, a formula is used to determine the total disability rating level for multiple disabilities. First, the disabilities are ranked from most to least severe. Then, it is determined what percentage of efficiency the veteran retains after the first, most severe disability. For example, if the veteran's most severe disability is rated at 40%, he is still 60% efficient.
After that, the second most severe disability is considered. That second disability rating is applied to the vet's remaining efficiency. For example, if the veteran after the first disability has a remaining 60% efficiency, and his second most severe disability has a 20% disability rating, then 20% of the 60% efficiency is calculated – in this case, 12%, and that number is added to the original disability rating (40% plus 12% equals 52% disabled).
The new disability rating is rounded up or down to the closer 10% increment. In the example above, the 52% rating would be rounded down to a 50% disability rating, and that veteran would be considered 50% disabled.
Once a disability rating is assigned, it may be subject to change in certain circumstances. For example, the VA may require medical re-examination of the veteran six months after leaving service, and then again between two and five years later. The VA does this to verify either the continued existence of or the current severity of a disability, particularly in cases where it is likely that a disability has improved, or if evidence indicates there has been a material change in a disability, or that the current rating may be incorrect. In such cases it is possible that the rating and benefits may be reduced or discontinued.
Re-examination would not likely occur in cases where the disability was determined at the outset to be permanent, in cases where the disability has not sustainably improved in five years, or in cases where the veteran is older than 55 years of age and his rating would not be changed by reexamination.
A veteran receiving benefits may file VA Form 21-4138 to request a new evaluation if he develops a new disability or disease connected to his service, or if he finds his condition worsening. The VA may then increase the veteran's disability rating and therefore increase the monthly compensation.
The VA cannot reduce a disability rating for a veteran with a 100% disabled rating unless there is a medical examination or evidence of ability to maintain employment for 12 consecutive months that shows "material improvement" in his physical or mental condition.
If a veteran has been deemed to have permanent and total disability and has been receiving disability benefits for twenty years or more, his benefits cannot be reduced. If the veteran's disability is less than permanent and total, and the veteran has been receiving disability benefits for twenty years or more, and upon re-examination by the VA the veteran's disability rating is lowered, the amount of compensation will not drop below the original level. For example, if the veteran has been deemed to be 40% disabled for a period of twenty continuous years or more and is then re-evaluated to be only 30% disabled, the amount of his benefits will not drop below the 40% compensation rate.
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