Pension-Legal References

VA “shall pay to each veteran of a period of war who meets the service requirements of this section . . . and who is permanently and totally disabled from non-service-connected disability not the result of the veteran’s willful misconduct, pension at the rate prescribed by [statute].”   38 U.S.C. § 1521(a).  The maximum annual rates for improved pension must be reduced by the amount of the veteran’s countable annual income.  38 U.S.C. § 1521; 38 C.F.R. § 3.23(b); Springer v. West, 11 Vet. App. 38, 40 (1998).  “Payments of any kind from any source shall be counted as income during the 12-month annualization period in which received unless specifically excluded under [section] 3.272.”  38 C.F.R. § 3.271(a); 38 U.S.C. § 1503; see Martin v. Brown, 7 Vet. App. 196, 199 (1994) (stating “statute and VA regulations provide that ‘annual income,’ as defined by statute and applicable regulation, includes payments of any kind from any source, unless explicitly exempted by statute or regulation”); but see 38 C.F.R. § 3.272 (enumerating categories to “be excluded from countable income for the purpose of determining entitlement to improved pension”).

Certain countable income is specifically excluded from this rule and as a result, a veteran’s pension will not be reduced.  38 C.F.R. § 3.272.  Social Security Administration (SSA) old age and survivor’s insurance and disability insurance payments are considered income and must, therefore, be included.  38 C.F.R. §§ 3.262; 3.271(g); Burch v. Brown, 6 Vet. App. 512, 513 (1994).  Benefits under noncontributory programs, such as old age assistance, aid to dependent children, and supplemental security income are treated as charitable donations.  See 38 C.F.R. §§ 3.262(d), (f).  Unreimbursed medical expenses paid within the 12-month annualization period are excluded from income to the extent that they are in excess of 5% of the maximum annual pension rate.  38 C.F.R. § 3.272(g)(1)(iii).  Whether a claimant is entitled to VA pension benefits is a question of fact.

Pursuant to 38 U.S.C. § 1505, pension benefits administered by the Secretary shall not be paid to or for an individual who has been imprisoned in a Federal, State, or local penal institution as a result of conviction of a felony or misdemeanor for any part of the period beginning 61 days after such individual’s imprisonment begins and ending when such individual’s imprisonment ends.  38 U.S.C. § 1505(a); 38 C.F.R. § 3.666; see also Latham v. Brown, 4 Vet. App. 265 (1993).

VA Non-Service Connected Pension or Wartime Pension

Many people confuse VA Pension with VA disability compensation. The two are different.

• VA pension is based on wartime service, having a non-service connected disability and the Veteran must be of low income.
• VA disability compensation is based on a service connected disability rating for the Veteran. The focus of this article is to provide the facts on the VA Pension since recently there has been misleading TV and internet advertisements promoting Veteran’s and Spouses to apply for the Pension.

Over the years the VA improved pension has been known as a Non-service connected Pension, a VA low-income Pension, live VA pension and most recently on TV and the internet advertised as a VA Wartime Pension for Veterans or Surviving Widows of Wartime Veterans.   The current improved pension became effective January 1, 1979 and was preceded by Section 306 Pension and Old-Law Pension Program.   All three non-service connected programs are disability and needs based. Today, the only available program for applicants is the improved pension program or non-service connected pension.

Eligibility for Non-Service Connected Pension

The improved pension program is for Veterans who served during wartime and meet specific requirements. It is for the requirement reason that TV advertisements refer to this pension as a wartime pension. The following program qualifying requirements must apply for the Veteran to receive this pension:

The Veteran must have an have a discharge “under other than dishonorable conditions” also known as a “honorable discharge”,

1. actively served a minimum of one day during wartime,
2. meet specific service time requirements,
   1. 90 days or more of active duty
   2. Veterans with active duty enlistment after September 7, 1980 must serve at least 24 months of active duty or complete the full period for which they were called to active duty.
3. be of limited income (determined by the Maximum Annual Pension Rate or MARP) and net-worth, which are discussed later in this article and
4. the Veteran must have one or more of the following :
   1. age 65 or older, or
   2. have a permanent and total non-service connected disability that will continue throughout the Veteran’s lifetime and prevents the Veteran from sustaining employment, or
   3. be a reside in a nursing home for long-term care , or
   4. be a recipient of Social Security disability benefits.

 Maximum Annual Pension Rate for VA NSC Pension

Date of Cost-of-Living Increase: 12-01-2017
Increase Factor:  2.0%
Standard Medicare Deduction: Actual amount will be determined by SSA based on individual income.

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Maximum Annual Pension Rate (MAPR) Category		Amount
If you are a veteran…		Your yearly income must be less than…
Without Spouse or Child		$13,166
		To be deducted, medical expenses must exceed 5% of MAPR,  or,  $ 659
With One Dependent		$17,241
		To be deducted, medical expenses must exceed 5% of MAPR,  or,  $ 863
Housebound Without Dependents		$16,089
Housebound With One Dependent		$20,166
A&A Without Dependents		$21,962
A&A With One Dependent		$26,036
Two Vets Married to Each Other		$17,241
Two Vets Married to Each Other One H/B		$20,166
Two Vets Married to Each Other Both H/B		$23,087
Two Vets Married to Each Other One A/A		$26,036
Two Vets Married to Each Other One A/A One H/B		$28,953
Two Vets Married to Each Other Both A/A		$34,837
Add for Early War Veteran (Mexican Border Period or WW1) to any category above		$2,991
Add for Each Additional Child to any category above		$2,250

Child Earned Income Exclusion effective:	01-01-2000	$7,200
(38 CFR §3.272 (j)(1)) This link takes you to the full regulation; scroll down to get the specific citation.	01-01-2001	$7,450
	01-01-2002	$7,700
	01-01-2003	$7,800
	01-01-2004	$7,950
	01-01-2005	$8,200
	01-01-2006	$8,450
	01-01-2007	$8,750
	01-01-2008	$8,950
	01-01-2009	$9,350
	01-01-2012	$9,750
	01-01-2013	$10,000
	01-01-2014	$10,150
	01-01-2015	$10,300
	01-01-2016	$10,350
	01-01-2017	$10,400
	01-01-2018	$10,650

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*Child dependents are: (1) under the age of 18, (2) between the ages of 18 and 23 who are attending college, or (3) declared a “helpless child” due to an infirmity before the age of 18. Veterans with additional dependent children should add $2,205 to the MAPR limit for each child.

Countable Income for Non-Service Connected Pension

To determine the income limit requirement for eligibility, the VA will require the Veteran to report all “countable income” for the Veteran’s household.

Countable income” refers to all household income:

• the Veteran’s,
• Veteran’s spouse (if living with the Veteran), and
• Dependents.

The Veteran’s “countable income” must be below the maximum annual pension rate, MAPR, and the Veteran’s “net worth” must not provide adequate maintenance of the Veteran.

The need for pension is determined by “countable income” minus allowable deductions. The calculated reduced income is then subtracted from MAPR limit and the result is the annualized pension divided by 12 months.

As an example:

• The MAPR for a Veteran who needs aid and attendance with no dependents is $21,531 income per year.
• The Veteran’s countable income is $32,000 per year.
• After subtracting the allowable deductions, the countable income of the Veteran is reduced to $15,000/year.
• The MAPR of $21,531 minus $15,000 of countable income equals $6,531 per year of VA Pension.
• The $6,531 yearly VA Pension is divided by 12 months to determine the monthly amount.
• The Veteran receives a VA pension for $544.25 monthly for this example.

Allowable Deductions from Countable Income for VA Pension

The Veterans “countable income” is reduced by specific expenses. However, often Veterans believe that they are not eligible for pension because they make too much or are denied because they do not know the complete list of income exclusions and deductible expenses that would reduce their “countable income”.

The complete list of income exclusions is provided in 3.272 of title 38, Code of Federal Regulations. This knowledge is important because most Veterans mistakenly think that the only income deduction is unreimbursed medical expenses over 5% of the Veteran’s household income. When in fact there are many deductions and when the Veteran uses all of the deductions that apply to their situation, the outcome is greater.

Another mistake that Veterans make is reporting income that is excluded from income reporting on the pension application.       Not knowing the rules or what information to supply can cause a VA denial!

All income received from the following exclusions are not considered countable income by the VA. Veterans should make sure that when applying for pension, all deductions are applied and only income not excluded is counted. The list includes 22 income sources that are excluded from reporting and are found in Title 38 CFR 3.272:

1. Welfare,
2. Maintenance in an institution or facility due to age or impaired health,
3. VA pension benefits ( Payments under Chapter 15 of Title 38 and including accrued pension benefits payable under 38 U.S.C. 5121),
4. Reimbursement for casualty loss,
5. Profit from the sale of property,
6. Joint accounts,
7. Unreimbursed medical expenses that are 5% of the MARP,
8. Veteran’s final expenses,
9. Educational expenses for Veteran or Spouse,
10. Domestic Volunteer Service Act Programs,
11. Distribution of funds under 38. U.S.C 1718,
12. DOD survivor benefit annuity,
13. Agent Orange settlement payments,
14. Restitution to individuals of Japanese ancestry,
15. Cash surrender value of life insurance,
16. Income received by American Indian beneficiaries from trust or restricted lands,
17. Payments from the Radiation Exposure Compensation Act,
18. Alaska Native Claims Settlement Act,
19. Monetary allowance under 38 U.S.C. chapter 18, Victims of Crime Act,
20. Healthcare premiums to include Medicare, (make sure to include all insurance premiums paid for all 4 Parts of Medicare-A,B,C,D and Supplemental plans),
21. Medicare prescription drug discount card and transitional assistance program, and
22. Lump-sum life insurance proceeds on a veteran.