What is the difference between VA Disability, Social Security Disability and Long-Term Disability Benefits?

A veteran who becomes disabled can face numerous challenges in their daily life. Perhaps the biggest is the financial stress of not being able to work. The Social Security Administration (SSA), Veterans Administration (VA) and long-term disability insurance (LTD) all pay disability benefits, but they differ in their processes and criteria for receiving benefits. An individual may receive VA disability benefits concurrently with SSDI, but eligibility for VA disability does not guarantee the claimant is entitled to SSDI. While a veteran’s disability that was incurred during military service will not qualify for long-term disability insurance coverage in a subsequent job that is not service-connected, a veteran may receive long-term disability insurance benefits for a new medical condition and VA disability benefits at the same time. If you are suffering from the effects of disabling disease or ailment you may qualify for disability benefits.

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There are differences in eligibility requirements, application process, and compensation, but perhaps the most important distinction between SSDI, LTD and VA disability benefits is the way the three entities define “disability.”

To qualify for VA disability benefits, you must be honorably discharged and the disability must be related to your military service.

Your age, educational background and work history do not affect your eligibility. The VA will assign a rating for your disability in the form of a percentage, ranging from 0% to 100%. For example, an individual who is deemed totally disabled will be rated 100% P&T (Permanent & Total. This percentage rating is not random. After a medical exam, P&T ratings are assigned according to a schedule organized under a variety of body systems including the cardiovascular system, the digestive system, the respiratory system and mental disorders. The rating schedule matches the injury to a percentage that is an estimate of the reduction in average earning capacity caused by the impairment.

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To be eligible for SSDI, you must be unable to perform substantial gainful activity (SGA) because of a medical condition, and the condition must have lasted, or be expected to last 12 months or result in death.

SGA is the level of work that a person can do without a disability. In 2025, SGA is defined as earning $1,620 or more per month for a non-blind person, or $2,700 per month for a blind person. There is no sliding scale to determine the severity of your injury; you are either disabled or you’re not. The Social Security Administration follows a manual called The Blue Book that lists impairments that automatically qualify as disabling conditions. To qualify as disabled, you must meet the specific criteria of a listing or be able to prove your injury is as disabling as a listed disorder. Unlike VA disability benefits, if you do not qualify because your disability doesn’t match a listed impairment, Social Security will take into consideration your age, educational background and work history to determine if you are capable of working.

Long-term disability insurance is coverage to protect your income if you are unable to work due to illness or injury and is purchased as part of a group employment plan or privately through an insurance company.

Each policy will state the definition of “disabled” which is in use. It’s important to know the insurer’s precise definition of “disabled” or “partially disabled.” Typically, “totally disabled” means unable to perform duties of your occupation due to illness or injury while “partially disabled” may provide benefits if you can no longer work at one occupation, but can work full or part-time at another job.

VA disability payments will vary according to the severity of a disability and the number of eligible dependents.

In 2025, average monthly payments range from $537 for a veteran alone rated 30% P&T to $3831 for a veteran alone rated 100% P&T. SSDI payments are based on a claimant’s lifetime average earnings for covered work; covered work refers to wages earned in jobs that paid Social Security taxes. Average monthly payments are about $1580.00. Long-term disability insurance pays 60-80% of a policy holder’s lost wages.

VA disability benefits are not subject to state or federal income tax.

Social Security Disability benefits can be subject to taxes, but most recipients do not pay any taxes because their income isn’t high enough. However, if the joint income of someone receiving SSDI benefits and their spouse is over $32,000 per year, which would include one-half of the SSDI benefit, they may owe taxes. Long-term disability insurance benefits may be taxable if the policy is paid through pre-tax income.

You may collect both VA disability benefits and SSDI at the same time; your eligibility and benefit amount are not affected by the other program.

If you are receiving VA disability benefits and are approved for SSDI, your Social Security disability benefits will not be reduced or offset by the amount of VA payment you are receiving. That means that if you qualify for both programs, you will continue to receive your full VA benefit and Social Security will continue to pay full SSDI benefits for as long as Social Security deems you disabled.

Long-term disability insurance companies can require a claimant to also apply for SSDI and then reduce insurance benefits by the amount of SSDI benefit a policy holder is receiving, but the situation is different with regard to VA disability benefits.

Let’s say you are discharged from military service and are receiving VA disability benefits. You begin working at another job where you have long-term disability insurance and incur a new injury or illness. Though you may be entitled to long-term disability insurance benefits, the insurance provider may or may not offset your benefit by the amount of VA benefit you are receiving; it depends on the language contained within your long-term disability insurance policy. Most disability claims governed by ERISA include an offset provision for other disability related benefits such as SSDI, Workers Compensation or Veterans Benefits. However, there have been some court opinions that have found that if a claimant is receiving VA benefits for a disabling condition unrelated to the disabling condition filed with the disability insurance carrier, then the disability company should not be entitled to an offset for VA benefits. In Riley v. Sun Life and Health Insurance Co. the Court of Appeals, 8th Circuit, ruled that VA benefits are not similar to Social Security or Railroad Retirement Act benefits and are not subject to the offset for “other income” benefits under the plan. If your policy specifically states that military disability income is not an offset, your long-term insurance benefits should not be reduced.

Social Security will pay disability benefits as long as you are disabled and cannot work.

If your condition improves and you are able to return to work, Social Security may adjust the amount of your benefit or discontinue it. The length of time long-term disability insurance benefits are paid out will depend on the terms of the policy. When you apply for long-term disability insurance you can choose a plan that pays out benefits for two years, five years, 10 years, or until retirement. The period you choose will depend on your own financial needs, what other insurance products you have, and what you can afford. If you are a veteran, you may be entitled to receive disability benefits for the rest of your life. However, if you have a medical condition that improves, your disability rating may be decreased, which will result in a reduction of your monthly disability payments, but rarely are they terminated. If you have received VA disability benefits for ten years or longer, your benefits receive special protection from termination. The VA cannot terminate these benefits unless you commit fraud or the VA made a “clear and unmistakable error” in granting you benefits; for example, if you have a dishonorable discharge or did not meet the minimum service requirements.

The Social Security Administration, Veterans Administration and long-term disability insurance all provide valuable assistance to individuals who have experienced a disabling medical condition, but the three programs vary in their requirements and financial benefits.

If you have an illness or injury and are not able to work, you may be eligible for disability benefits. An experienced disability attorney can review your case and explain your options.

Author: Attorney Greg Reed has been practicing law for 29 years. He is Superlawyers rated by Thomson Reuters and is Top AV Preeminent® and Client Champion Gold rated by Martindale Hubbell. Through his extensive litigation Mr. Reed obtained board certification from the Texas Board of Legal Specialization. Greg is admitted to practice in the United States District Court - all Texas Districts and the United States Court of Appeals-Fifth Circuit. Mr. Reed is a member of the Travis County Bar Association, Texas Trial Lawyers Association, past Director of the Capital Area Trial Lawyers Association, and an Associate member of the American Board of Trial Advocates. Mr. Reed and all the members of Bemis, Roach & Reed have been active participants in the Travis County Lawyer referral service.