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Veteran Affairs Disability

I was medically discharged from the military due to major back surgery. I currently receive a 50% pension from 25 years service as well as Long Term Disability benefits from private insurance. I know that these proceeds are factored into my formula for surplus income. Question: Veteran Affairs has awarded me 840 dollars per month tax free for pain and suffering. Does this pension get included in my formula for surplus income as it was awarded for pain and suffering or is it excluded??

One Response to “Veteran Affairs Disability”

A licensed trustee said...

I am not aware of any case law dealing with your exact situation. As a general rule, your surplus income is based on your income, regardless of source, so yes, this amount is included.

However, the court does have the ability to alter payments if warranted. I would suggest you contact a bankruptcy trustee to review your situation to determine the best course of action. It may be that you have offseting medical expenses so it’s not an issue, or perhaps a consumer proposal is the correct option.