The Department of Veterans Affairs has released a new Veterans Disability Payments Table for 2025 that shows an increase in disability payments of 2.5%. This is good news for disabled veterans who qualify for these monthly, tax-free payments because of injuries or illness related to service or that were made worse because of service.
Let’s explore this increase and VA disability compensation in more depth.
During the process of determining eligibility, veterans are assigned a disability rating based on the severity of their service-connected condition and whether they have dependents. The rating determines how much disability compensation veterans receive, tax-free, each month; it also determines eligibility for additional special monthly compensation for severe disabilities, as well as for other VA benefits such as home adaptation grants, life insurance, clothing and automobile allowances, vocational rehabilitation and employment, and education assistance.
Payments are adjusted annually and are required by law to reflect the cost-of-living adjustment (COLA) made to Social Security benefits. This year’s increase of 2.5% is slightly less than the U.S. inflation rate of 2.7%.
This YouTube video provides an overview of the payment increase and offers additional resources in the notes on topics that include adding qualified dependents, submitting a claim, and finding a VA-accredited Veteran Service Officer to assist in navigating the process and benefits.
This page on the U.S. Department of Veterans Affairs website provides detailed information about the 2025 compensation rates.
The VA bases disability ratings on three main sources of information:
The VA uses a method called “whole person” theory that enables the system to consider multiple types and degrees of disability to result in a combined disability rating. That rating is expressed as a percentage that indicates the extent to which a disability, or combination of disabilities, impacts overall health and the ability to work and function. For instance, if a veteran has two disabilities which are rated at 50% and 30%, the combined rating is 65%, which is rounded to 70%. A 70% rating indicates a severe level of impairment that significantly limits independent daily functioning and the ability to work.
Any system that is dependent on translating an individual’s personal experience to a compensable number is by nature limited by the amount of information about that experience that it can accurately capture and incorporate.
For VA disability ratings, that limitation is in large part rooted in the emphasis placed on medical rather than functional data. Medical data like a physician’s physical, lab work, and radiographic images are essential but rarely include information about how the individual functions in their day-to-day life and work. When functional data is incorporated, it is often based on informal self-reporting by the disabled person. While simple and cost-effective, it is well-established that self-reporting results in both overreporting and underreporting of function. The outcome of this is that veterans who deserve disability are sometimes denied needed payments and services, while those who don’t qualify may receive inappropriate benefits.
Absolutely! In fact, there is already an established, proven process for more accurately and objectively assessing a person’s level of physical function: the Functional Capacity Evaluation (FCE). Extensively used in the workers’ compensation space, FCEs are observation-based tests that assesses an individual as they perform work-related functions in front of a trained clinician who observes and scores their abilities on tasks including:
The resulting report includes a determination of disability level expressed in terms of permanent or temporary, and total or partial.
Not only can the FCE help determine the level of disability truly experienced by a veteran, it can also provide direction regarding the level of physical work appropriate, outline necessary restrictions or accommodations, and advise on work-related rehabilitation that could improve physical functioning and ability to work.
FCEs do require additional time and expense, typically lasting three to four hours and costing $1,000-2,000. Though this may appear on the surface to be an argument against incorporating FCEs into the VA disability determination process, it is important to consider the larger picture. The average compensation for a veteran with a severe disability is almost $50,000 per year, based purely on medical data and not taking into account a veteran’s actual daily experience. Integrating a more comprehensive assessment like an FCE could result in a more accurate and objective understanding of an individual’s disability, as well as a pathway to improved ability, both of which could lead to cost savings and increased happiness over the lifetime of the disabled veteran.
Though the use of FCEs in disability determination in the private sector is well-established, it does not appear that there is wide use or incorporation of the assessment by the VA. Changes to processes in most government agencies, including the Social Security Administration and the VA, are notoriously slow, especially when those changes have budgetary implications.
Though we aren’t aware of any intent by government agencies to explore complementing the current disability determination process with the use of FCEs, there is a foundation to build from when the opportunity arises. As mentioned above, FCEs have been used extensively in workers’ compensation; the VA can draw from the experience and research in the private sector and adapt those processes to the government space without reinventing the wheel.
It is quite feasible to facilitate that adaptation and prove out the benefits of incorporating FCEs by designing a pilot program to compare disability determination between two groups of veteran claimants. A strong pilot program could include:
As a company that deeply believes in the benefits of FCEs, ErgoScience would appreciate hearing your opinions and comments on how to encourage the VA to consider incorporating them into the current disability determination process, as well as how to most effectively assist them in doing so.
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