Wary of rising disability retirement costs, the Department of Defense two decades ago quietly sought and received an internal legal opinion that, to this day, tamps down the number of wounded or ill service members awarded military disability retirement.

The March 25, 1985, memo from the Department of Defense office of general counsel gave defense health officials a green light to restrain military disability ratings without a change in law.

They did so by directing the services to stop setting disability awards based on all service-connected ailments found during medical evaluations, and start basing them only on conditions that leave members unfit for duty.

The policy change took effect in February 1986. Its impact can be profound on individuals, particularly in wartime. The Veterans' Disability Benefits Commission is studying the effects and its chairman this month sounded an alarm.

The advantages of receiving disability retirement, which requires a 30 percent or higher disability rating, are great for members with less than 20 years in service. Beside an immediate annuity, disabled retirees and their families gain lifetime access to Tricare, base shopping privileges and a host of other perks tied to "retiree" status.

Veterans with disability ratings of 0 to 20 percent receive only a lump-sum severance payment upon discharge. They can apply to the Department of Veterans Affairs for a higher rating and will often get one, which can mean monthly VA compensation and improved access to medical care. But VA care isn't available to families and VA doesn't offer baselike support services.

In April 2005, Army National Guard Spc. Kenneth Parham, 47, was in the gun turret of a Humvee when it drove over a bomb buried in a road outside Kirkuk, Iraq. The explosion tossed his Humvee high into the air, leaving Parham with a collapsed lung, fractured ribs and damaged discs in his neck and back.

Parham, who as a civilian drove a moving van and lifted up to 5,000 pounds a day, now needs a motorized cart to shop in stores. He has chronic neck and back pain. He must walk slowly, sit frequently and can't lift more than 20 pounds. Because he can't wear a helmet or carry a rucksack, the Army has found the former Marine unfit for duty. It plans to discharge him with a 20 percent rating and about $40,000 in severance. Next week, he will travel from his Idaho home to Fort Lewis, Wash., to appeal that rating before a physical evaluation board.

His wife, Cheryl, said her husband's quality of life and job prospects have plummeted. "How's he going to support himself the rest of his life?" she asked. Service-connected ailments the Army ignored in setting the 20 percent figure, she said, include post-traumatic stress disorder with nightmares, a weakened leg, sleep apnea, high-blood pressure and arthritis.

From 2000 through 2006, the Army gave ratings of 30 percent or higher to only 13 percent of soldiers deemed disabled.