The Basics of VA Pension Benefits

A. The Difference Between VA Compensation and VA Pension Benefits.

A veteran who suffered an injury or contracted a disease while on active duty, and the injury or disease was the result of the veteran’s service or was exacerbated by the veteran’s service, can receive monthly income from the U.S. Department of Veterans Affairs (VA) called disability Compensation.  A veteran who is disabled, but who was not disabled  while on active duty and whose injury or disease was not the result of his or her military service, may still be entitled to Pension benefits  from the VA if the veteran has limited income and assets and meets the other eligibility criteria described below.

B. VA Pension Benefits: For Non-Service Connected Disabilities.

Veterans or dependants of veterans (usually widow(er)s) are entitled to an Improved Pension which will provide a Special Monthly Pension (SMP) benefit to offset the cost of necessary health care.  The three categories of SMP are called “Low Income Pension”, pension with “Housebound” benefits and pension with “Aid and Attendance” benefits.  Eligibility is based on the following criteria:

1.  Basic Eligibility Criteria for Improved Pension, Housebound and Aid and Attendance.

All of the following criteria must be met before a veteran or dependent of a veteran can receive Improved Pension benefits:

a. The veteran must have served at least 90 days of active duty service, one day of which must have been during a wartime period. For the purpose of determining eligibility for VA Pension Benefits, “wartime” is defined as service during:
World War I
World War II – Dec. 7, 1941 – Dec. 31, 1946
Korean War – June 27, 1950 – Jan. 31, 1955
Vietnam Conflict – Aug. 5, 1964 – May 7, 1975
Gulf War – August 2, 1990 through date to be set by law by Presidential Proclamation;

b. The veteran must have received a discharge other than dishonorable;
c. The claimant must have limited income and assets available;
d. The claimant must have a permanent and total disability at the time of application;
e. The disability was caused without willful misconduct of the claimant; and,
f. The veteran or widow must sign an application and provide the application to the VA.

2.  Pension Types.

a. Low Income Pension.  Low income pension is the VA’s equivalent of Supplemental Security Income (SSI) benefits.  The claimant must meet all of the requirements set forth above.  The permissible family income limits for 2009 Low Income Pension are:
(1) Veteran with no dependents    $931/month;  $11,181/year
(2) Veteran with one dependent    $1,220/month; $4,643/year
(3) Widow(er) with no dependents     $624/month; $7,498/year

b. Pension with Housebound Benefits. Housebound benefits are available to a veteran or dependent who is disabled and confined to the home.  The two ways to prove entitlement include:
(1) A single permanent disability rated as 100% disabling under the VA schedule and confinement to the dwelling, or,
(2) A 100% disability with another 60% disability, regardless of whether or not the person is confined to the dwelling.
A disability rating is not required for people aged 65 or older.  People aged 65 or older are presumed to be disabled; however, the VA will require a physician’s affidavit confirming the claimant’s condition.  The permissible family income limits for 2009  Housebound benefits are:
(1) Housebound veteran/no dependents            $1,138/month;       $13,664/year
(2) Housebound veteran/one dependent           $1,427/month;       $16,740/year
(3) Housebound widow(er)/no dependents      $763/month;          $9,164/year

c. Pension with Aid & Attendance Benefits. Aid and Attendance benefits are available to a veteran or dependent of a veteran who meets one of the following conditions: i. Claimant is blind; ii. Claimant is living in a nursing home; OR, iii. Claimant is:  a. unable to dress/undress or keep self clean and presentable; b. unable to attend to the wants of nature; OR, c. Claimant has a physical or mental incapacity that requires assistance on a regular basis to protect claimant from daily environmental hazards.  The permissible family income limits for 2009 A&A Benefits are:
(1) Veteran/no dependents                 $1,554/month; $18,654/year
(2) Veteran/one dependent                 $1,842/month; $22,113/year
(3) Widow(er)/no dependents            $998/month; $11,985/year

3. Income Limits.

There are income limitations for VA Pension Benefits. An applicant will be denied benefits if the veteran’s or dependent’s countable income exceeds the maximum permissible family income limits.  Countable income is all income attributable to the applicant, the applicant’s spouse, and the applicant’s dependent children.  A lump sum from a personal injury settlement, worker’s compensation settlement, or inheritance IS considered income.  The lump sum will be “annualized” and broken down to a monthly figure.  The monthly figure will be counted as regular income like all other income.  One notable exception is SSI, which is not countable income and does not reduce the available pension rate.

Although most veterans have income that exceeds the permissible family income limits, recurring, unreimbursed medical expenses paid by the claimant may be used to reduce the claimant’s countable income.  Unreimbursed medical expenses that may reduce income include: Medicare premiums, prescription medications, health insurance premiums, transportation to physician offices, therapy, co-pays, home health care, assisted living facility, nursing home costs, and funeral expenses.

4.  Asset Limits.

A.     Standard.  VA Pension benefits are based on financial need. Thus, the VA considers the net worth of the individual seeking benefits, excluding the value of the person’s home, furnishings, and car.  The eligibility standard is whether the claimant has “sufficient means” to pay for his own care.   The net worth of both the veteran and the veteran’s spouse are considered when determining eligibility.

B.    Presumption of Sufficient Means.  No specific dollar amount is designated as excessive net worth.  What constitutes excessive net worth is a question of fact for resolution after considering the facts and circumstances in each case.  A number of variables are taken into consideration when the VA makes a net worth determination.  Factors considered include:
1. income from other sources;
2. family expenses;
3. claimant’s life expectancy; and,
4.  convertibility into cash of the assets involved.

A commonly used measure, and an amount specifically listed in the VA adjudication manual, is $80,000 or less in assets, whether married or single.  Assets that are counted toward the “sufficient means” amount of $80,000 include bank accounts, certificates of deposit, money market accounts, investment accounts, annuities, retirement accounts, life insurance cash surrender values, etc.

C.  Age Analysis. The VA has begun instructing adjudicators to perform an “age analysis” when determining financial need.

Source:  Academy of Special Needs Planners