David R. Berkowitz, New York City's "Son of Sam" killer, could receive more than $10,000 a year in tax-free Veterans Administration benefits if the agency rules that his psychiatric problems can be traced to his three-year military career.

Seth Rubenstein, a New York City attorney, argued Berkowitz's case for more than two hours last Thursday before a three-member veterans appeals board in Washington.

VA officials would confirm only that Berkowitz, 27, is seeking a variety of medical and educational benefits. Citing the Privacy Act, the officials declined to discuss details of Berkowitz's request.

But VA officials did say that the only benefits for which the convicted mass murderer could be eligible are either GI Bill education payments which would cover any correspondence courses the so-called "44-caliber killer" might take behind bars, or monthly medical disability payments, if it is determined that his disability stems from his military experience.

Imprisonment makes Berkowitz ineligible for the military income supplement program, which is earmarked for destitute veterans and veterans with non-service connected disabilities that makes it impossible for them to work.

"Those benefits are based on the fact that his disability precludes him from gaining employment," said Melody Warner, staff assistant to the director of the VA Compensation and Pension Service. But Berkowitz's case, incarceration -- and not any disability he might have -- takes him out of the job market, and disqualifies him from such pension benefits, she said.

"The pension program is an income supplement to help the veteran live," Warner said. "Berkowitz's needs are being met by an institution now. That rules out a pension."

But imprisonment might not rule out education benefits or service-connected disability payments for which Berkowitz might be eligible. And, Warner said, "if he proves that his disability relates to [his experiences in] military service, he could qualify for up to 100 percent disability payments of $889-a-month."

"We're here to help the veteran," said Kenneth Eaton, acting vice-chairman of the Board of Veterans Appeals at 811 Vermont Avenue NW, where a 340-member staff processes 35,000 appeals a year for veterans' claims.

"After all, he is a veteran, and by virtue of his military service is entitled to any benefits for which he is eligible," said another VA official.

Two months ago, a New York regional VA office denied a claim by Berkowitz for military benefits, Eaton said. But Rubenstein decided to appeal the ruling and "notified us. So we scheduled a hearing." Rubenstein officially represents not Berkowitz but the conservator of his estate.

A ruling on Berkowitz's claim could take up to four months, a VA official said.

Berkowitz is serving a 315-year sentence in a special cellblock inside New York's Attica State Prison.

For more than a year before his arrest in August 1977, he terrorized New York City, mailing "catch-me-if-you-can" letters, killing seven people with a .44-caliber revolver and wounding seven others. He later testified that "howling demons" speaking through the dog of a Yonkers neighbor ordered him to kill.

One psychiatrist found Berkowitz "paranoid" and unable to participate in his own defense, but he was later found capable of standing trail. He withdrew an insanity defense, pleaded guilty to the killings and received maximum sentences.

Berkowitz spent three years in the army, including a year in South Korea. Part of his military records made public during his 1977 murder trial showed that Berkowitz was reprimanded and demoted once in Korea for missing a convoy movement. He was later promoted back to specialist 4 from private first class.

Military records listed Berkowitz's primary skill as rifleman, and his secondary skill as clerk. He qualified as a sharpshooter with the M-16 rifle and earned two routine awards -- the National Defense Service Medal and the Armed Forces Expeditionary Medal.

He enlisted in the regular army on June 23, 1971, in New York City, records show.

The army, citing restrictions under the Privacy Act, would not release the nature of his discharge. To win his claims appeal with the VA, and to qualify for benefits, Berkowitz must have a discharge issued under honorable conditions, one VA official said.

Berkowitz served as an auxiliary policeman in the Bronx in the 1970s and worked as a uniformed security guard. He then joined his U.S. Postal Service as a clerk.

Born David Falco, he was adopted as a child by Nathaniel Berkowitz.

Like Gary Gilmore, Charles Manson and other killers who made national headlines, Berkowitz has proved to be worth his weight in media gold. He has inspired T-shirts, rock songs and fat literary advances for New York Daily News columnist Jimmy Breslin and others.

While some have profited from Berkowitz's story, his attorney is faced with a New York state law requiring that any money made by a convicted criminal from media fallout of a crime must be used first to compensate the victims.

Under the state Crime Victims Compensation Law, attorney fees would have first lien on Berkowitz's estates. If a book of his life story succeeds, any excess profits in the conservator's portion of the royalties may then be available to settle the millions of dollars of claims filed by survivors and relatives of victims.

In a closed hearing on Thursday, attorney Rubenstein accompanied by Berkowitz' court-appointed conservator, Doris Johnson, spent two and a half hours behind a dark wood door on the third floor of the Board of Veterans Appeals presenting Berkowitz' case.

VA officials fretted as a reporter waited in the hall. "Just by acknowledging that a hearing is taking place, we may be overstepping our [privacy] bounds," said VA spokesman Bill Sawchuk. "We're the good guys in this. We're trying to protect a veteran's privacy. But it would be ludicrous to deny" that the hearing was taking place.

A hearing sheet listed: "Berkowitz, David R. On for 2 p.m. SS-079-40-1951."

Rubenstein, Johnson and the three appeal board members -- Romulus Picciotti, Johanna Giordani and Dr. Herbert Bauersfeld -- all declined to comment.