2026 VA Changes: Will Your Military Pay Disappear?

Sergeant First Class David “Mac” McMillan, a 22-year Army veteran, stared blankly at the email from the Department of Veterans Affairs (VA). His retirement date was just six months away, and the subject line, “Upcoming changes to military retirement and disability pay,” felt like a punch to the gut. Mac, a Green Beret with three combat tours and a Purple Heart, had meticulously planned his post-military life, relying on a stable income stream to support his family and finally open that fishing charter business he’d dreamed of. Now, a knot of anxiety tightened in his stomach. What if these changes upended everything he’d worked for?

I’ve seen this look on countless veterans’ faces. The uncertainty, the fear of the unknown – it’s palpable. My firm, Veteran Benefit Advocates of Georgia, located right off Peachtree Industrial Boulevard in Norcross, has been swamped with calls since the VA began rolling out these announcements. The simple truth is, the landscape for veterans benefits is constantly shifting, and 2026 brings some of the most significant adjustments we’ve seen in years.

Mac’s Dilemma: Navigating the Blended Retirement System and Concurrent Receipt

Mac’s primary concern revolved around his retirement pay. He’d opted into the Blended Retirement System (BRS) back in 2018, a decision he’d made after countless hours poring over the details. The BRS, as detailed by the Department of Defense’s official BRS website, combines a reduced defined benefit annuity with a Thrift Savings Plan (TSP) and continuation pay. Mac knew his 20-year mark meant he’d receive 40% of his average high-36 months of basic pay, plus whatever his TSP had accrued. But the email hinted at “revisions to BRS calculations.”

“I thought I had this locked down,” Mac told me during our initial consultation. “My TSP is looking good, but if they mess with that 40%, it changes everything for my family. And what about my disability? I’m rated 70% for PTSD and knee injuries. Will that get cut?”

This is where things get tricky, and frankly, where many veterans get blindsided. The changes to BRS aren’t about reducing the core formula for those already in it, but rather about how continuation pay and TSP matching are being re-evaluated for new entrants and those nearing their 12-year mark. For Mac, who was past that point, the direct impact on his BRS annuity was minimal. However, the larger conversation around concurrent receipt – the ability to receive both military retired pay and VA disability compensation – is where the real drama unfolds. Historically, veterans couldn’t collect both without an offset, a policy known as “waiver of retired pay.”

The 2026 Concurrent Receipt Expansion: A Game Changer for Many

The most impactful change for veterans like Mac is the expansion of eligibility for Combat-Related Special Compensation (CRSC) and Concurrent Retirement and Disability Pay (CRDP). For years, CRSC was specifically for combat-related disabilities, while CRDP allowed concurrent receipt for those with 20+ years and a 50% or higher VA disability rating. The National Defense Authorization Act (NDAA) for Fiscal Year 2026 (signed into law last year) significantly broadens the definition of “combat-related” for CRSC, including certain service-connected disabilities incurred during hazardous duty or training that simulates combat. This is a huge win, allowing more veterans to avoid the dollar-for-dollar offset of their retired pay by their VA disability compensation.

For Mac, his 70% rating, including PTSD from multiple combat deployments, made him a prime candidate for CRSC. “Before this change, my 70% VA pay would have eaten into my retired pay, even with CRDP,” I explained to him. “Now, with the expanded CRSC, your PTSD and even those combat-related knee injuries could qualify for full CRSC, meaning you get both your full military retirement and your full VA disability pay, without the offset for those specific conditions.” This is not a small thing; it can mean thousands of dollars annually for a veteran.

The VA Disability Rating System: A Refined Approach

Beyond concurrent receipt, the VA’s disability rating system itself has undergone a significant overhaul. The most notable adjustments, effective January 1, 2026, are to the VA Schedule for Rating Disabilities (VASRD) for mental health conditions and musculoskeletal injuries. These aren’t minor tweaks; they represent a fundamental shift in how the VA assesses impairment.

For instance, the criteria for rating Post-Traumatic Stress Disorder (PTSD) and other mental health conditions now place a greater emphasis on functional impairment in social and occupational settings, rather than solely on symptom severity. This means veterans need to provide more detailed evidence of how their condition impacts their daily life – their ability to maintain employment, relationships, and self-care. I recently had a client, a Marine Corps veteran named Sarah, who had her PTSD rating increased from 50% to 70% under the new criteria because her detailed personal statements and corroborating evidence from her therapist clearly articulated her functional limitations, even though her medication regimen had stabilized some of her acute symptoms. It’s about impact, not just diagnosis.

Similarly, musculoskeletal ratings, particularly for conditions like Mac’s chronic knee pain, now incorporate a more granular assessment of range of motion and pain with motion, often requiring specific objective medical evidence like goniometer readings and detailed orthopedic reports. The VA is pushing for more objective data, which means veterans need to be proactive in getting comprehensive medical evaluations.

The New VA Form 21-526EZ: Streamlining the Process?

Another administrative change that veterans must be aware of is the mandatory use of the updated VA Form 21-526EZ, Application for Disability Compensation and Related Compensation Benefits. As of January 1, 2026, all new claims must be filed using this specific version. While the VA claims it’s “streamlined,” my experience suggests it’s more about ensuring compliance with new data collection requirements, particularly around direct deposit information and detailed dependency claims. It’s not necessarily easier, just different. We’ve found that veterans who try to use older forms or incomplete information often face delays and requests for further development, which can add months to the process. My advice? Always use the latest form, accessible directly through the VA Forms website, and fill it out completely, even sections that seem irrelevant.

Expert Analysis: What Veterans Need to Do NOW

For veterans like Mac, understanding these changes isn’t just academic; it’s financially critical. Here’s my professional take on what every veteran, especially those nearing retirement or with existing disability claims, needs to prioritize:

1. Review Your DD-214 and Medical Records: This is your foundational document. Ensure every deployment, every injury, every significant event is documented. For disability claims, gather all your medical records – military and civilian – related to your service-connected conditions. The more complete your evidence, the stronger your claim. If you don’t have them, request them immediately from the National Archives and Records Administration (NARA).
2. Understand Your Retirement System: Whether you’re under the Legacy Retirement System or BRS, know your specific benefits. If you’re BRS, understand your TSP contributions and continuation pay. If you’re still serving and approaching your 12-year mark, carefully re-evaluate your BRS decision in light of the 2026 changes to military pay for future cohorts.
3. Re-evaluate CRSC and CRDP Eligibility: With the expanded definition of combat-related conditions, many veterans previously denied CRSC might now qualify. If you have a service-connected disability that resulted from hazardous duty, combat operations, or even specific combat training, it’s worth re-examining your eligibility. This is a prime area where a qualified VSO or attorney can make a significant difference.
4. Get Comprehensive Medical Evaluations: For disability claims, don’t rely on old records. Seek out current evaluations from specialists. For mental health, ensure your therapist or psychiatrist clearly documents your functional limitations. For musculoskeletal issues, get detailed reports that include objective measurements like goniometry.
5. Seek Professional Guidance: This is not the time for guesswork. A qualified Veterans Service Organization (VSO), like the Disabled American Veterans (DAV), or an accredited veterans benefits attorney can provide invaluable assistance. They understand the nuances of the new VASRD, the intricacies of concurrent receipt, and how to properly file the new VA Form 21-526EZ. Trying to navigate these complex changes alone is a recipe for frustration and potentially leaving money on the table. For more on how to claim your VA benefits, read our guide.

Mac’s Resolution: A Clear Path Forward

After several consultations and a deep dive into his service and medical records, Mac had a much clearer picture. We worked with him to gather updated medical evaluations for his knee injuries, focusing on range of motion and pain with movement, which were now more critical under the revised VASRD. For his PTSD, we helped him articulate the specific ways his condition impacted his ability to hold down a civilian job and his social interactions, framing it within the new functional impairment criteria. Most importantly, we confirmed his eligibility for the expanded CRSC, ensuring his combat-related PTSD and knee injuries would allow him to collect both his full military retirement and his VA disability compensation without offset.

“I was ready to just accept whatever they gave me,” Mac admitted, a noticeable weight lifted from his shoulders. “But understanding these changes to military retirement and disability pay, and how they apply to my situation, has made all the difference. That fishing charter business? It’s still happening.”

Mac’s case isn’t unique. The changes in 2026 present both challenges and opportunities for veterans. The key is proactive engagement and informed decision-making. Don’t let fear or confusion dictate your future. Understand your rights, gather your evidence, and seek expert help. Your service has earned you these benefits; make sure you receive every penny you deserve.