Veterans’ Disability Payments Would be Protected by Tester Bill

The HAVEN Act will treat VA disability payments the same as Social Security disability payments for bankruptcy purposes

(U.S. Senate) – As Ranking Member of the Senate Veterans Affairs Committee, U.S. Senator Jon Tester helped introduce legislation today to ensure veterans aren’t financially penalized for receiving the benefits they’ve earned.

“Our nation’s veterans sacrifice life and limb to protect our country-and many of them now live with permanent disabilities because of it,” Tester said. “In exchange for their service and sacrifice, we provide basic disability payments. But right now, if a veteran is underwater, this compensation is counted against them. The HAVEN Act will fix this and ensure our veterans can rely on the benefits they’ve earned when they need them most.”

That’s why Tester is cosponsoring the bipartisan Honoring American Veterans in Extreme Need (HAVEN) Act. Under current bankruptcy law, VA disability payments are considered “disposable” income, but Social Security disability payments are not. This means that a civilian who is disabled because of a car wreck is treated more favorably by the U.S. bankruptcy system than a veteran who is disabled because their convoy ran over an IED overseas.

To remove this unequal treatment among various disability benefits, the HAVEN Act would exclude VA and DoD disability payments made to veterans or their dependent survivors from the disposable income calculation used during a bankruptcy proceeding. Excluding these payments from the calculation will keep veterans from having to dip into their disability payments to pay off creditors.

The HAVEN Act is supported by Veterans of Foreign Wars (VFW), the American Legion, Society of Military Widows, Paralyzed Veterans of America, Disabled Veterans of America (DAV), Veterans for Common Sense, U.S Army Warrant Officers Association, the Retired Enlisted Association, the Association of the United States Army, the Association of the United States Navy and the American College of Bankruptcy.

Read more about Tester’s work on behalf of veterans HERE.