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.

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