Committee advances bill to exclude VA disability pay from disabled veterans income test

Senator Sciarra presented SB 888 to a California State Senate committee, saying the bill would prevent VA service-connected disability compensation from being counted as household income when determining eligibility for the disabled veterans property tax exemption.

"The problem is clear," Sciarra said. "Veterans must be disabled to qualify for the exemption, yet the very disability compensation they are receiving is counted as income, pushing many over the income threshold and making them ineligible for the low income tax exemption."

Sciarra explained that disability compensation and Social Security, when combined, can push a 100%-disabled veteran and spouse above the current $81,131 income level used in the example he provided, even if the household has no earned wages. The bill would align the property tax exemption’s income calculation with recent changes that exclude disability compensation from other government benefit eligibility tests.

Committee members offered bipartisan support. Senator Becker called it a "common sense" bipartisan measure, and the vice chair thanked the author for working on veterans' issues. Senator Grayson praised the bill for helping government work more efficiently and for addressing policy silos.

The committee accepted the sponsor’s committee amendments and voted to pass SB 888 as amended to the Committee on Military and Veterans Affairs. The clerk called the roll and the motion passed unanimously.

Why it matters: Proponents say the bill closes a gap that can inadvertently disqualify veterans who rely on VA disability compensation and Social Security from property tax relief intended to help disabled veterans stay in their homes.

Next steps: SB 888 was reported out of committee and will go to the Committee on Military and Veterans Affairs for further consideration.