The announcement was made Wednesday in the Federal Register, ABC News reported.
The rule change would affect veterans diagnosed with PTSD and similar mental disabilities.
"Although we do not disagree with some commenters' subjective accounts that mental health service dogs have improved the quality of their lives, VA has not yet been able to determine that these dogs provide a medical benefit to veterans with mental illness," the VA said.
Veterans with vision, hearing and mobility problems will still get service dogs courtesy of the VA, which will still pay for medical treatment prescribed by veterinarians, but military veterans will have to pay for the dogs' food and other needs.
Lindsey Stanek, who heads Paws and Stripes, a service dog organization in New Mexico, said her husband, who received a head injury in Iraq, has been greatly helped by his service dog, Sarge. She said Sarge can help James Stanek pick up objects and get up from chairs -- and even warns him when migraine headaches are coming on.
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