Understand how Incapacity Payments work, how they may change over time, and what to consider before making decisions about work and income.
If you’re receiving payments through the Department of Veterans’ Affairs,
you may be wondering how they fit into your financial future.
A common question that we are asked is “Can I work while receiving incapacity payments?”
It’s one of the most common — and most important — questions that Veterans ask.
Because the answer isn’t always simple, and the decisions you make can affect your income over time.
What Are Incapacity Payments?
Incapacity payments are designed to provide income support when a service-related injury affects your ability to work.
They may be based on:
• Your previous earnings
• Your current work capacity
• How your condition impacts your ability to work
How Incapacity Payments May Change Over Time
Incapacity payments don’t always stay the same. They may change depending on:
• Your ability to return to work
• Changes in your health
• Updates to your circumstances
Working While Receiving Incapacity Payments
Some Veterans choose to return to work — either part-time or full-time.
However, this may affect:
• How payments are calculated
• The amount you receive
• Your long-term income position
Understanding how work and incapacity payments interact is important before making any major decisions.
How Incapacity Payments Fit Into Your Long-Term Income
Incapacity payments are often just one part of a broader financial journey.
Over time, this may also include:
• Permanent Impairment compensation
• Special Rate Disability Pension (SRDP)
• Retirement income such as the Service Pension or Age Pension
Think of it as:
Today → Income support
Future → PI / SRDP
Later → Retirement
Common Mistakes to Avoid
• Making decisions too quickly
• Not understanding how income changes
• Focusing only on short-term income
• Not considering long-term financial impact
What Should You Do Next?
If you’re receiving Incapacity Payments, it can help to:
• Understand how your payments work
• Consider how decisions today affect your future
• Look at how everything fits into your long-term financial plan
Not Sure What To Do Next?
If you’re receiving incapacity payments and are unsure how decisions around work or income may affect you, it can help to talk things through before making any major changes.
👉 Have a Conversation