Although both programs pay benefits to disabled Veterans, there are several differences between Veterans Pension and Veterans Compensation benefits.
Pension benefits are available to Veterans who are disabled and meet other eligibility requirements. There is no requirement that the disability or disabilities be related to the Veterans service. However, the Veteran must have at served at least 90 days of active duty and one day must have been during a period of war. Pension benefits are only available to Veterans who have financial need. In some ways, it is similar to Social Security’s Supplemental Security Income in that is provides income to Veterans who are low-income and unable to work due to their health. Payments are a set amount based on income and are not based on a rating schedule.
Compensation benefits are available to qualified Veterans regardless of financial circumstances. Payments are made for health conditions that are connected to the Veteran’s military service and are based on the severity of the impairment. To be eligible for benefits, the Veteran must prove that the health condition is related to military service and that is it severe enough to qualify for a rating. If an impairment is service connected but rated at 0%, no benefits will be paid for that impairment.