A recent analysis from the Congressional Budget Office reveals that veterans with low disability ratings often earn more than their non-disabled peers, while those with significant service injuries lag behind in personal income. This report coincides with the Department of Veterans Affairs’ increasing annual disability compensation costs, which totaled $125 billion in fiscal 2022, accounting for almost 45% of all department spending. In 2022, about 30% of all US veterans had some service-connected disability that warranted compensation.

Contrary to common perceptions, veterans receiving disability payouts are more likely to be younger than the average veteran, married, and hold a college degree. About one in five veterans with any disability rating are not part of the American workforce.

The Congressional Budget Office used census reports and available VA data to find that in 2019, the average earnings for male veterans with a disability rating equated to $52,200. This figure is around $10,200 below the earnings of non-disabled veterans. Earnings varied widely among the injured and infirm, with veterans with low disability ratings earning more than their non-disabled counterparts, while those with ratings 70% or higher earned almost 40% less.

A similar trend was observed among female veterans. Those with a 10% or 20% rating earned more, while women veterans with a rating of 70% or higher earned less.

The earning capacity of a veteran primarily depended on their ability to work. Veterans with low disability ratings could maintain full-time jobs despite averaging about $2,300 in VA payouts annually. On the other hand, veterans with high disability ratings averaged $29,200 in payouts but often could only manage part-time employment or weren’t able to work regularly.

The report did not propose any changes to the veterans compensation system but provided insights that could help assess the financial security of veterans receiving disability payments.