• Sleep apnea rating could drop from automatic 50% to as low as 0% under proposed changes
• Most veterans with 100% disability rating remain employed, officials clarify
• VASRD modernization anticipated by end of fiscal year 2026

WASHINGTON, DC (TDR) — The Department of Veterans Affairs faces mounting pressure to modernize its disability compensation system as Congressional hearings revealed that benefit determinations still rely on medical judgments and earnings data from 1945, potentially affecting millions of veterans who receive $195 billion annually in disability payments.

The House Veterans’ Affairs Committee Subcommittee on Disability Assistance and Memorial Affairs held oversight hearings this week titled “Reevaluating the Rating Schedule: Examining VA’s Efforts to Modernize Disability Benefits,” spotlighting proposed changes that could dramatically reduce compensation for common conditions like sleep apnea.

Sleep Apnea Faces Dramatic Rating Reduction

Under current regulations, veterans who require a CPAP machine automatically receive a 50% disability rating—monthly compensation of approximately $1,102. The proposed changes would eliminate this automatic rating structure entirely, potentially dropping most CPAP users to just 10% compensation.

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The proposed rating system would eliminate the 30% tier completely and base ratings on treatment effectiveness rather than device usage.

“For most veterans with sleep apnea, this means going from 50% down to 10%—an 80% reduction in benefits for that condition.”

The changes represent one component of a broader VASRD modernization effort that the VA anticipates finalizing by the end of fiscal year 2026, followed by a mandatory 60-day implementation period.

Comorbidities Become Central to New Rating Criteria

Under the proposed system, veterans can maintain higher ratings if comorbid conditions prevent effective CPAP usage. Qualifying comorbidities include conditions that directly impede habitual treatment use.

“Comorbid conditions involve health problems from one or more medical conditions that occur alongside your sleep apnea and adversely affect your health and treatment outlook.”

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Examples of qualifying comorbidities include post-traumatic stress disorder where CPAP masks trigger anxiety or flashbacks, contact dermatitis causing facial irritation, Parkinson’s disease affecting mask fit, or severe rhinitis creating nasal obstruction.

Veterans already rated for sleep apnea will be grandfathered under current criteria, but those filing new claims after implementation would face the stricter standards.

Federal Watchdog Warns of Outdated Rating Criteria

The Government Accountability Office testified that disability ratings in 2026 continue to rely on physicians’ and lawyers’ judgments from 80 years ago regarding service-connected disabilities and average earnings losses.

“Given the size of and investment in the program, VA must be able to make accurate decisions about veterans’ disability claims. Consequently, ratings determinations for all earnings loss calculations remain based on information from 1945.”

VA’s management of disability compensation claims has remained on GAO’s “High-Risk List” since 2003, reflecting ongoing concerns about accuracy and modernization efforts.

Rep. Morgan McGarvey (D-KY) urged the VA to seek feedback from veterans as it updates benefit determination criteria, emphasizing the need for veteran voices in policy development.

“Veterans’ voices should be included at the table.”

Service Connection Requirements Clarified

VA representatives explained the legal framework for establishing service connection during the hearing, emphasizing that disabilities must meet specific evidentiary standards.

To qualify for compensation, conditions must be:

• Incurred during military service
• Caused by military service
• Aggravated by military service

All claims require supporting medical evidence and clinical documentation linking the condition to service. The VA conducts rigorous, evidence-based assessments with limited customization to ensure fairness across the system.

Disability Rating Does Not Equal Unemployability

Committee members questioned whether increased disability enrollment indicated greater veteran dependency on benefits—a narrative often cited in policy debates. VA officials firmly rejected this characterization.

“There is no evidence supporting increased reliance and most veterans receiving benefits remain employed.”

The testimony clarified a critical distinction that confuses many policymakers and veterans: disability ratings measure impairment severity, not earning capacity or employability.

Veterans with a 100% schedular disability rating can legally maintain substantially gainful employment without jeopardizing their benefits. The rating reflects the severity of their service-connected conditions, not their functional work capacity.

“A 100% disability rating does not automatically mean a veteran cannot work. The rating assesses impairment severity related to service-connected conditions, not necessarily the veteran’s actual capability to work.”

Only veterans receiving TDIU benefits face employment restrictions, as this benefit specifically compensates veterans unable to maintain substantially gainful employment due to service-connected disabilities.

Mental Health Rating Changes May Offset Losses

While sleep apnea ratings face reductions, proposed mental health rating changes could benefit some veterans. The new system would eliminate the non-compensable 0% rating and establish a minimum 10% for any service-connected mental health diagnosis.

The proposed evaluation framework moves from subjective occupational impairment assessments to objective symptom-based ratings across five domains:

• Cognition (memory, concentration, decision-making)
• Relationships (interactions at home, work, social settings)
• Task completion (ability to start and finish work/daily tasks)
• Navigating environments (comfort leaving home, handling new situations)
• Self-care (hygiene, medications, appointments, basic needs)

“Veterans with severe symptoms who still manage to hold a job often get underrated. The proposed new system evaluates mental health across five areas of daily functioning.”

Tinnitus Facing Elimination as Standalone Condition

The VA also proposes eliminating the standalone 10% rating for tinnitus, one of the most common service-connected conditions. Under new criteria, tinnitus would only receive compensation when linked to another condition such as hearing loss.

Currently, veterans with ringing or buzzing in their ears automatically receive 10% compensation. The proposed change would eliminate this “gateway claim” that many veterans use to establish service connection.

Timeline and Implementation Concerns

The VA anticipates publishing final rules by the end of fiscal year 2026, with implementation following a mandatory 60-day cooling-off period. This suggests changes could take effect as early as late 2026 or early 2027.

Veterans advocates expressed concerns about the pace of modernization and insufficient veteran input in the process. Kyleanne Hunter, CEO of Iraq and Afghanistan Veterans of America, echoed lawmakers’ calls for greater veteran inclusion in policy development.

Strategic Considerations for Veterans

Veterans who have not yet filed for sleep apnea should consider submitting claims immediately. Those who establish service connection under current criteria will be grandfathered at existing rating levels, even after new standards take effect.

Filing an Intent to File (ITF) locks in the current effective date and provides up to one year to complete the claim under present rating criteria.

Veterans currently rated for sleep apnea need not worry about automatic reductions. The VA’s grandfather clause protects existing ratings unless veterans specifically request an increase or file new claims.

For sleep apnea claims filed after implementation, veterans should focus on documenting:

• Sleep study results showing incomplete relief despite treatment
• Comorbid conditions that impede CPAP usage
• Medical opinions linking sleep apnea to service or secondary conditions
• CPAP compliance records and usage logs
• Statements detailing functional limitations and symptoms

Secondary Conditions Remain Critical

Even under proposed changes, sleep apnea can lead to secondary conditions that warrant separate compensation. Untreated sleep apnea over many years can cause hypertension, heart disease, diabetes, and potentially Alzheimer’s disease.

Veterans experiencing secondary conditions linked to sleep apnea should file additional claims, reinforcing the importance of establishing service connection for the primary condition early.

Congressional Oversight Continues

The hearing represents the second in a series examining VA disability compensation modernization. Disability Assistance Chairman Luttrell indicated the subcommittee will maintain oversight as the VA finalizes proposed changes.

Lawmakers raised concerns about private contractor oversight for disability examinations, outdated earnings loss data, and the need for transparency in the rating modernization process.

The subcommittee emphasized that while modernization remains necessary, the VA must balance current medical understanding with fair treatment of veterans who earned these benefits through their service.

Will veterans receive adequate compensation under modernized rating criteria that eliminate automatic ratings for common conditions like sleep apnea?

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