VA pension and VA disability compensation are two different benefits that are sometimes confused. Disability compensation is paid to veterans with disabilities connected to their military service, regardless of income. The payment amount depends on your disability rating percentage and number of dependents. VA pension is a needs-based benefit for wartime veterans who have limited income and are permanently and totally disabled from non-service-connected conditions, or who are age 65 or older. Pension is reduced dollar-for-dollar by other income, while disability compensation is not. You generally cannot receive both full pension and full compensation. If you qualify for both, VA pays whichever amount is higher. For most veterans with significant disability ratings, compensation is the better benefit because it is not income-dependent and is often a higher monthly amount. However, pension can be more beneficial for wartime veterans with low income who have non-service-connected disabilities that prevent them from working. Pension also has additional payments for aid and attendance and housebound status, similar to special monthly compensation on the disability compensation side. If you are unsure which benefit applies to you, file claims for both and let VA determine which provides the higher payment.
Note: This article references sections of the VA's M21-1 Adjudication Procedures Manual. The VA periodically reorganizes the M21-1 and section numbers may have changed since this article was written. For the most current section references, visit the VA's public M21-1 Web Automated Reference Material System (WARMS).