Veterans and Social Security: VA, SSDI and Medicare

Military service counts toward Social Security like any other job, and VA disability compensation doesn't reduce your Social Security retirement or disability check. The programs do overlap in a few places worth knowing. Social Security fast-tracks disability claims from veterans with a 100% permanent and total VA rating, VA payments count as income for SSI, and relying on VA health care alone can leave you with a lifetime Medicare penalty.

Military pay earns Social Security credits

Active duty after 1956 is covered work under 20 CFR 404.1330. That includes the reserves (except temporary Coast Guard reservists) and the commissioned corps of NOAA and the Public Health Service. You paid Social Security tax on your military pay and earned credits the same way a civilian does.

For service from 1957 through 2001, Social Security also adds extra "deemed" wages to your record (20 CFR 404.1341):

If you first enlisted on or after September 8, 1980, or entered active duty on or after October 14, 1982, you generally needed 24 months of continuous active duty (or your full call-up period, if shorter) to qualify. A discharge for a disability incurred in the line of duty is one of the exceptions. No extra credits apply to service after 2001.

These extra wages don't appear on your Social Security statement, according to SSA's operations manual. For 1968 through 2001 they're already built into your benefit estimates. For 1957 through 1967, SSA adds them once your service is proven, usually when you apply, so keep your discharge papers handy.

VA disability pay and SSDI are separate

You can collect VA disability compensation and Social Security Disability Insurance (SSDI) at the same time. SSDI is reduced when you also get workers' compensation or certain other public disability payments, but the rule exempts VA benefits (20 CFR 404.408).

The two agencies also judge disability differently. The VA rates partial disability in percentages. Social Security pays only if your condition keeps you from substantial work for at least 12 months or is expected to end in death. For claims filed since March 27, 2017, SSA won't adopt the VA's decision, but it does consider the medical evidence behind it (20 CFR 404.1504). Send your VA records with your application.

Two groups of veterans get priority handling at every stage of an SSDI claim:

• A 100% permanent and total (P&T) VA disability compensation rating. The VA sends Social Security a list of these veterans every week, so you don't need to prove the rating, though a VA rating letter helps if the flag is missing. This applies to compensation ratings only, not to the needs-based VA pension. Faster handling doesn't mean automatic approval: you still have to meet SSA's medical and work rules.
• Wounded Warriors. Any current or former service member who became ill or was injured while on active duty on or after October 1, 2001 qualifies, wherever or however the disability happened.

Once approved, SSDI follows its usual rules, including a five-month waiting period and Medicare after 24 months of benefits. Our SSDI calculator estimates the monthly amount from your earnings.

Where VA benefits do reduce a check

• SSI. Supplemental Security Income counts veterans' benefits as unearned income (20 CFR 416.1121), so VA compensation lowers an SSI payment. See how SSI differs from SSDI.
• VA pension. The needs-based Veterans Pension works the other way around. VA counts your Social Security as income and pays the gap between that income and a set limit, so a bigger Social Security check means a smaller pension.

Medicare and VA health care

VA health care and Medicare don't coordinate the way most insurance does. VA doesn't bill Medicare, and you choose which coverage to use for each service. Medicare covers you at non-VA doctors and hospitals, which is why VA encourages veterans to sign up for Medicare when they become eligible.

The cost of waiting falls mainly on Part B. Medicare charges an extra 10% for each full 12-month period you could have had Part B but didn't, and for most people that penalty lasts for life. VA's own guidance warns that it grows each year you delay. Drug coverage is different: VA prescription coverage counts as creditable, so you can join Part D later without a penalty if you sign up within 63 days after losing VA coverage.

Military retirees face a firmer rule. TRICARE For Life requires both Medicare Part A and Part B, and coverage starts on the first day you have both. Active-duty members and their families who have Medicare stay on their current TRICARE plan. For how Medicare premiums come out of your check, see Social Security and Medicare.

What to do

1. Check your earnings record in your my Social Security account, and remember the 1957–2001 military credits won't be listed.
2. Tell SSA about a 100% P&T rating when you file for SSDI, and send VA medical records with your claim.
3. Decide on Part B before your Medicare enrollment window closes, especially if you're a military retiree counting on TRICARE For Life.
4. Estimate your retirement benefit with our benefits calculator, and keep this year's figures on our cheat sheet.

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This article is general educational information, not legal or benefits advice. Rules are from 20 CFR Parts 404 and 416, SSA's Program Operations Manual (DI 11005.007, DI 23020.050, DI 23020.055, RM 01310.020), VA.gov, Medicare.gov and TRICARE.mil. Confirm your situation with Social Security at 1-800-772-1213, the VA, or TRICARE. SocialSecurityNews.com is not affiliated with or endorsed by the Social Security Administration, the Department of Veterans Affairs or the Department of Defense.