In June 2024, the Department of Veterans Affairs (VA) implemented a major rule change that expands eligibility for VA benefits to more veterans with less-than-honorable discharges. This new regulation creates a “compelling circumstances” exception – a more holistic review of a veteran’s service and circumstances – which can allow VA benefits even if the veteran was discharged for misconduct. In short, VA must now consider the veteran’s overall service and life situation surrounding the misconduct, rather than denying benefits automatically. This guide explains what changed, whom it helps, and how veterans can take advantage of this new rule.

Background: Character of Discharge and the Old Misconduct Bar

To receive most VA benefits, your character of discharge must be “other than dishonorable.” Certain types of discharges or behaviors have long been considered “dishonorable” for VA purposes even if you didn’t receive a Dishonorable discharge from a court-martial. One of the most common regulatory bars to VA benefits was “willful and persistent misconduct.” This means an Other Than Honorable (OTH) or Bad Conduct discharge could be deemed dishonorable (and thus bar benefits) if your service record showed a pattern of serious or repeated misconduct (not just a one-time minor mistake). Under the old rules, any OTH discharge due to willful and persistent misconduct resulted in VA denying benefits, unless you could prove a specific exception like being “insane” at the time of the offenses or that the offense was minor in an otherwise meritorious service.

Why was this a problem? Many veterans received OTH discharges for misconduct that was linked to trauma, mental health issues, or other pressures during service. Yet before 2024, VA’s rules did not formally require consideration of these mitigating factors in most misconduct cases. As a result, veterans who served honorably overall – but had service-related problems like untreated PTSD leading to misbehavior – were often barred from benefits that could help them. Congress originally intended VA to have flexibility (“conditions other than dishonorable” standard) to avoid unduly harsh results, but the regulations hadn’t been seriously updated in decades.

What Changed in 2024? A New “Compelling Circumstances” Review

On June 25, 2024, a new VA regulation (38 C.F.R. § 3.12, amended) took effect. This final rule “Update and Clarify Regulatory Bars to Benefits Based on Character of Discharge” introduced a Compelling Circumstances Exception to give veterans a second chance even if their service was marred by misconduct. In essence, VA will no longer automatically deny benefits just because your discharge involved willful misconduct or even certain crimes. Instead, VA must consider the context and mitigating factors before deciding if your service was “dishonorable” for VA purposes.

Key aspects of the 2024 rule change include:

  • Expanded “Compelling Circumstances” Exception: Previously, a “compelling circumstances” clause existed mainly for lengthy AWOL cases (180+ days AWOL is a statutory bar, with possible exceptions for compelling reasons). The **2024 rule extends this exception to regulatory misconduct bars – specifically for discharges due to **“willful and persistent misconduct” or offenses involving “moral turpitude.” Now, even if a veteran’s misconduct fits those categories, VA will perform an individualized review to decide if the veteran’s overall service and hardships outweigh the misconduct. This is a huge shift from the old yes/no approach and is the first major update to these rules in over 40 years.

  • Removal of Outdated Bar for LGBTQ+ Conduct: As part of the same rule update, VA eliminated the regulatory bar for “homosexual acts involving aggravating circumstances.” This outdated rule, a relic of past discrimination, is now gone. (VA had already been granting relief in these cases in practice; the rule change makes it explicit.) With this removal, there are now only four regulatory bars instead of five, and two of those (moral turpitude and willful misconduct) now have the compelling circumstances exception. This demonstrates VA’s commitment to more fair and inclusive criteria.

  • Clearer Definition of “Willful and Persistent” Misconduct: The 2024 update also clarified what counts as “persistent” misconduct. For example, multiple minor offenses within 2 years, a mix of minor and serious offenses within 2 years, or multiple serious offenses within 5 years count as “persistent”. This added clarity (absent before) helps ensure the label is used objectively and not applied too harshly. Even then, if those criteria are met, VA still must apply the compelling circumstances test before barring benefits. The goal is that only truly serious, unmitigated misconduct will block benefits, and veterans whose misconduct was offset by honorable service or tough circumstances will not be unfairly excluded.

Factors VA Must Consider Under “Compelling Circumstances”

What exactly are “compelling circumstances”? The new rule spells out a broad range of factors that VA must weigh when reviewing a less-than-honorable discharge case. Even if the record shows misconduct, VA adjudicators will ask: Were there good reasons or difficult situations that explain or outweigh the negative behavior? Under the 2024 rule, VA will consider:

  • Overall Length and Quality of Service: How long and how honorably did the veteran serve apart from the incidents of misconduct? If the period outside the misconduct was “honest, faithful and meritorious” service that benefited the nation, that counts in the veteran’s favor. A few bad moments do not erase years of good service.

  • Mental Health Conditions or Cognitive Impairments: Did the veteran have mental health issues at the time of the misconduct? This can include diagnosed or undiagnosed conditions such as Post-Traumatic Stress Disorder (PTSD), Traumatic Brain Injury (TBI), depression, bipolar disorder, schizophrenia, substance use disorder, or other impairments affecting judgment. The VA recognizes that service-related mental injuries and trauma can drastically alter behavior and decision-making. For instance, a combat veteran with severe PTSD or TBI might have disciplinary issues linked to those conditions – now, those must be taken into account.

  • Physical Health and Injury: Did physical injuries, pain, or other medical issues contribute to the misconduct? Chronic pain, combat wounds, or side effects of medications are considered. Physical trauma and health problems can impair a service member’s performance and behavior, so VA will factor in any relevant medical evidence here.

  • Combat or Operational Stress and Hardship: Did the veteran endure combat-related hardships or difficult overseas deployments? High-risk and high-stress assignments can lead to “moral injury” and other invisible wounds that influence behavior. The new rule explicitly acknowledges that “repeated traumatic exposures during combat” may result in PTSD, TBI, or other issues that explain misconduct. In evaluating the discharge, VA will consider the stress of combat, war zone conditions, or other extreme military hardships the veteran faced.

  • Sexual Trauma, Abuse, or Discrimination: If the service member suffered sexual assault, sexual harassment, or other abuses during service – often referred to as Military Sexual Trauma (MST) – this is a compelling factor. Likewise, if the veteran experienced discrimination (e.g. racism, hazing, LGBTQ+ persecution) that contributed to their discharge or behavior, VA will weigh that as well. These experiences can severely affect mental health and conduct. The VA has made clear that victims of MST or discrimination should get a fairer evaluation under the new rule. Any records or personal statements about such experiences are relevant evidence in a compelling circumstances review.

  • Other Extenuating Circumstances: The regulation also includes any other factors that might mitigate the misconduct. For example, duress or coercion – was the service member under extreme pressure or threat when the misbehavior occurred? Desperation or immature judgment – was the individual very young or lacked support, contributing to poor choices? VA will even consider the veteran’s age, education, cultural background, and judgmental maturity at the time of the incidents. Additionally, family obligations or obligations to others can be factored in (for instance, going AWOL to care for a sick family member might be viewed with sympathy). In short, VA must take a holistic, case-by-case look at what was happening in the veteran’s life and service that might explain or offset the misconduct.

In practice, this “compelling circumstances” test asks: Does the evidence show that the misconduct was either mitigated by these circumstances or outweighed by the veteran’s otherwise honorable service? If yes, VA can decide not to apply the misconduct bar. The aim is not to excuse wrongdoing entirely, but to ensure that deserving veterans aren’t denied benefits due to context that civilians might not understand. As VA put it, the goal is to identify cases where the veteran’s service, on the whole, was not truly dishonorable despite incidents of misconduct. This is a significant shift toward fairness and acknowledges the complex realities many service members face.

Note: The compelling circumstances exception applies to discharges considered under **“willful and persistent misconduct” or “moral turpitude” bars (and continues to apply to prolonged AWOL cases). It does not override certain statutory bars that remain in law. For example, an actual Dishonorable Discharge (issued by a General Court-Martial) or discharges for offenses like espionage, mutiny, or desertion are still generally absolute bars to benefits (unless you were legally insane at the time). The new rule doesn’t change those, but it greatly expands relief for veterans with OTH or Bad Conduct (Special Court-Martial) discharges that fall under the regulatory misconduct categories.

More Veterans Can Qualify for VA Benefits Now

The bottom line: This 2024 rule change means many veterans who were previously denied benefits can now become eligible. VA itself estimates that these reforms will “increase the number of former service members found eligible” under character-of-discharge (COD) reviews. In fact, VA leadership has actively encouraged veterans with bad paper discharges to reapply, emphasizing that “we will do everything in our power to get to yes” on benefits whenever possible.

For the past decade, VA had already been granting benefits in about 75% of COD determination cases for OTH/BCD veterans (57,000+ individuals received care/benefits). With the new compelling circumstances policy, that percentage is expected to grow, since more applicants will pass the eligibility test after a full context review. If you or someone you know was denied VA benefits in the past due to a less-than-honorable discharge, now is the time to take a second look.

How to Reapply Under the New Rule

If you were previously told you are “not eligible” for VA benefits because of your discharge, you can ask VA to reevaluate your case under the new, more favorable rules. Here are the steps to do so:

  1. Submit a Supplemental Claim: VA is inviting veterans to reapply if they were denied under the old rules. You should submit VA Form 21-0995 (Decision Review Request: Supplemental Claim) to your VA Regional Office. On this form, indicate that you are seeking a new Character of Discharge determination under the updated 2024 regulation. There is no time limit on reapplying – even if it’s been years since your denial – and no cost to file this claim.

  2. Provide Supporting Evidence of “Compelling Circumstances”: Along with your claim, include any evidence or statements that speak to the mitigating factors discussed above. For example:

    • Medical records or nexus letters diagnosing you with PTSD, TBI, or other mental health conditions related to your service (especially if those conditions existed during your service).

    • Personal statements or buddy letters describing any combat trauma, personal hardships, or abuse/discrimination you experienced in service.

    • Service records or awards that show your length and quality of service aside from the incidents (e.g. evaluations, commendations, combat deployments).

    • Statements explaining the situation around the misconduct (for instance, if you felt under duress or had family emergencies).

    The goal is to paint a full picture for the VA reviewer of your service and circumstances. Don’t assume VA knows – if something in your life contributed to the discharge, tell them about it in writing. Under the new rule, VA must consider all relevant evidence you provide.

  3. Get Help From Experienced Advocates. Navigating VA processes can feel overwhelming—especially when you’re trying to reopen a case that was already denied. Success often comes down to how well your story is documented and argued. That’s where having the right advocate matters.

    At National Security Law Firm (NSLF), we make this process easier by:

    • Gathering critical evidence like old service medical records, performance evaluations, and buddy statements.

    • Building the narrative that ties your service, circumstances, and conditions directly to the misconduct findings.

    • Presenting your case strategically, using our insider knowledge of how VA raters actually evaluate these claims.

    Unlike unaccredited “consultants” who may charge upfront fees, NSLF is accredited, veteran-founded, and only gets paid if you win. That means our incentives are fully aligned with yours.

    While some veterans turn to Veterans Service Organizations (VSOs) for assistance, working with NSLF gives you the advantage of seasoned attorneys—including former VA insiders—who know how to maximize your chances under the new compelling circumstances rule.

  4. Apply for VA Healthcare Now (If Needed): Even while your character-of-discharge review is pending, note that some VA health care options might be available to OTH veterans in crisis (such as emergency mental health care or if you have a service-connected condition from combat). If you need immediate assistance, contact the VA or Veterans Crisis Line. Once your COD is favorably resolved, you can access the full range of benefits (health care, disability compensation, etc.) except certain programs that by law require an “Honorable” discharge (for example, GI Bill education benefits still require an honorable discharge and cannot be granted with a general/OTH discharge). However, disability compensation, VA healthcare, home loans, and most other benefits can be awarded if VA finds your service was “honorable for VA purposes” under the new rule.

  5. Be Patient and Follow Up: VA will review your re-submitted claim and make a new decision based on the 2024 criteria. This process may take a number of months. You should receive a new decision letter explaining whether your discharge is now accepted for VA benefits. If you don’t hear back in a reasonable time, reach out to your regional office or VSO to check the status. Keep a copy of anything you submit. If the VA needs more information, they will send a request – respond promptly to keep your claim moving.

What This Means for Veterans

The “compelling circumstances” exception is a game-changer for many veterans with OTH or bad paper discharges:

  • Deserving Veterans Get a Second Chance: Veterans who served honorably overall but fell into trouble because of service-related issues (combat stress, PTSD, MST, etc.) now have a pathway to be recognized as “veterans” for VA purposes and receive the support they earned. VA is essentially saying “we recognize your service might still be honorable on the whole, despite the discharge.”

  • More Consistent and Fair Outcomes: The new rules make the process more objective and case-by-case. VA decision-makers have clear guidance to consider all evidence and give the benefit of the doubt to the veteran whenever the record is unclear. They are directed not to automatically use a misconduct bar unless the facts unmistakably support it. This reduces the chance of arbitrary denials. Every veteran’s story is different, and now the VA will listen to that story rather than judging only the discharge paperwork.

  • Outreach to Previously Denied Veterans: VA has explicitly opened the door for those who were previously denied benefits to reapply under the new policy. They have even engaged in outreach efforts, given that thousands of OTH veterans may not realize they could be eligible now. If you know a fellow veteran who was turned away from VA in the past, encourage them to try again. The rules are more favorable, and VA leadership has emphasized helping these veterans. As VA Secretary Denis McDonough said, “Although VA cannot change your discharge status, we want to provide you with any health care or benefits we can – and we will work with you every step of the way to do exactly that.”

  • No Change to DoD Discharge Status: Importantly, a favorable VA decision under this new rule does not change your official military discharge on your DD-214. For instance, your discharge will still legally be OTH or BCD; however, VA will treat it as honorable for benefit eligibility purposes. To actually change the characterization of your discharge, you would need to pursue a Discharge Upgrade through the DoD’s boards (which is a separate process). The VA’s character-of-discharge determination is only about access to VA benefits. But gaining VA benefits (health care, disability pay, etc.) can dramatically improve your situation even if your paperwork remains the same.

Conclusion: A New Path to the Benefits You Earned

The 2024 “Compelling Circumstances” exception represents a more compassionate and just approach to evaluating veterans with less-than-honorable discharges. It acknowledges that good people can end up with bad paper due to circumstances often beyond their full control – whether it be war trauma, mental illness, or injustice they suffered while in uniform. The VA now must consider those factors and can grant benefits to those who truly deserve that status despite past misconduct.

If you were denied before, now is the time to act. The rules have changed in your favor, and many veterans are already seeing positive outcomes with reapplications. This exception creates a new path for veterans to receive VA care and services that were once out of reach. Every case is unique, but with the compelling circumstances review, your whole story as a veteran matters – not just the chapter that went wrong.

Should I Hire a Lawyer?

You may be wondering: Do I really need an attorney?

Here’s the reality: a good VA attorney should pay for themselves many times over. Why? Because:

  • We often uncover benefits you didn’t even know you qualified for.

  • We fight for higher ratings that put more money in your pocket every month—tax free, for life.

  • We make the process faster, cutting down on years of waiting.

Example: A veteran stuck at 50% compensation ($1,102/month) finally wins a 100% rating ($3,831/month). That’s an extra $2,729/month—over $32,000/year. Even if it takes a year to win, that’s back pay plus lifetime increases.

👉 Check out our comprehensive guide on representation options for VA appeals to see how attorneys, VSOs, or self-representation compare.

Pricing & How We Get Paid

We know cost is a big concern. Here’s the truth:

  • You pay nothing up front.

  • We only get paid if you win.

  • Fees are a percentage of your back pay, not your future monthly checks.

This aligns our interests with yours—we don’t win unless you do.
Learn more about our pricing here.

WHY NSLF

At National Security Law Firm, our mission is simple: maximize your benefits in the shortest amount of time—and make the process as easy as possible for you.

  • Accredited & Trusted: 4.9⭐ Google Reviews.

  • Founded by Disabled Veterans: Brett O’Brien, U.S. Army and Army Reserve veteran, founded NSLF after battling the VA himself. He knows what it’s like to be denied.

  • We’ve Been There: Almost all our lawyers and paralegals are disabled vets. We’ve walked in your boots.

When you hire us, you’re not just getting representation—you’re getting the firepower of a team that knows every angle of the VA system.

National Security Law Firm: It’s Our Turn to Fight for You.

Your Next Step

Don’t let a bad paper discharge erase your service—or your future. If you need help, reach out to us today. We’ll walk you through the process, fight to maximize your benefits, and give you the peace of mind you deserve.

👉 Start with our VA Disability Education & Legal Strategy Center—a hub of resources that will answer every question you have about VA claims and appeals. Whether you move forward on your own, with a VSO, or with us, this is your roadmap to success.

At the end of the day, you fought for this country—now it’s our turn to fight for you.