Compensation is paid to a veteran due to a disability (or disabilities) if the injury or disease has occurred as a direct result of military service. The amount of compensation is not determined by need or time served but is determined by the extent of the disability, based on 10% increments of severity. This form of determination for compensation has long been considered unfair, and this method of benefit is gradually being eliminated.

If a veteran qualifies for compensation, he or she will receive a monthly check based on his or her percentage of disability, ranging from 10% ($112 a month) to 100% ($2393 a month). For veterans with very severe disabilities, the amount of compensation can exceed 100%.