Also referred to as Disability Pension, the VA’s Wartime Pension is monetary support for veterans and their families. This Pension is needs based, so only veterans who meet strict eligibility criteria qualify. Veterans who can no longer work or who earn a limited income are most likely to qualify.
Compensation is awarded to veterans of any age for disabilities caused by, or aggravated by, their active duty service. Pension, on the other hand, is awarded to veterans with financial needs; and veterans need not be injured or disabled to qualify for the benefit. Veterans whose Pension award is greater than their compensation award can elect the greater of the two benefits, but they cannot collect both.
Only veterans who served at least 90 days of active military duty are eligible for Pension. Of those 90 days, at least one day must have been during a wartime period, as defined by Congress. Wartime periods include:
There are exceptions to the wartime service rule, but they only apply in limited cases. Veterans who could benefit from Pension, but did not serve during a wartime period should speak with a representative about whether they qualify for an exception to the wartime service rule.
Veterans qualify for Pension by meeting annual income limits. Veterans who earn too much income do not qualify for the benefit because it is designed to assist only those with little net income. Although the income limit changes annually, a single veteran is limited to earning $11,181 in 2010. Veterans whose income exceeds this amount can possibly reduce their income by taking deductions for things like unreimbursed medical expenses. Because the VA looks at veterans’ net income, even a high-earning veteran may qualify for Pension after taking deductions.
The VA looks at every income source when calculating a veteran’s annual income. When filling out a Pension application, then, veterans must include everything from inheritances to gambling winnings. Annuities and trusts (Insert link) are also counted as income, so veterans should attach these documents to the Pension application. Veterans should use the spot on the Pension application labeled “Other Income” to explain any income they did not report elsewhere on the application. The VA examines all of the reported income and excludes income that is not countable.
Married veterans applying for Pension must include their spouse’s income on the Pension application. But just like a spouse’s income counts against an applicant, a spouse’s unreimbursed medical expenses can help an applicant by reducing his total income. The VA looks at all of the married couple’s income and expenses, so spouses can potentially help or hinder Pension eligibility, depending on the situation. Speaking with a professional about veteran’s asset and income protection planning before applying can be quite helpful to married veterans applying for Pension.
Also known as Widow’s Pension, the VA’s Death Pension provides financial support for surviving widows or widowers, or the unmarried children, of deceased wartime veterans. Applicants must meet financial requirements to qualify for this benefit.
The Widow’s Death Pension is only available to surviving widows or widowers who were married to a veteran when he or she died. It is not available to divorcees, no matter how long the marriage lasted.
Death & Indemnity Compensation is awarded to surviving spouses of veterans killed in service or who died as a result of their service-connected disabilities. Death Pension is awarded based on financial need, and does not require that the veteran’s service directly caused his death. Widows or widowers who are eligible for both Death & Indemnity Compensation and Death Pension should choose the former, as it is always the greater benefit.
Death Pension has annual income limits because it is intended for low-income earners. Congress adjusts the limit annually, which is set at $7,408 for 2010. The VA counts most income, but widows and widowers can reduce their countable income by deducting unreimbursed medical expenses. Those with significant deductions may qualify for the Death Pension even if they are high-income earners. For this reason, it is quite helpful for widows and widowers of veterans to speak with a professional about income protection planning before applying for the Death Pension.
Veterans and their widows must apply for VA benefits when they apply for ALTCS. In addition, ALTCS applicants should apply for any private pensions and survivors’ benefits they are eligible for. This includes federal retirement, military retirement and railroad retirement funds.
ALTCS is a payer of last resort that covers the difference between a member’s monthly income and monthly expenses. To prevent overpayment, ALTCS requires members to maximize other benefits that are available to them, including VA Pension.
VA Pension applications take longer to process than ALTCS applications. On average, applications for VA Pension, whether Wartime Pension or Death Pension, take the VA six to eight months to process. Processing time for an ALTCS application is about three months. As such, ALTCS applicants who have yet to apply for Pension should not rely on Pension to cover their long-term care while their ALTCS application is still pending. Applicants who engage in ALTCS planning can obtain optimal coverage from the two benefits by submitting an application for Pension four months before submitting their application for the ALTCS benefit.
Is VA Pension considered “income” for purposes of determining ALTCS eligibility?
ALTCS members sometimes have to help pay for their healthcare, depending on how much income they earn. Those who earn more must pay a higher share of cost, and those who earn above a set limit are altogether ineligible for the ALTCS benefit. ALTCS counts VA Pension when calculating a member’s income, so members generally use some of Pension to pay for a share of their healthcare.
Share of cost is the portion of ALTCS members’ income that they must pay towards their own healthcare. ALTCS assesses a share of cost against any income that it counts when determining applicants’ eligibility. However, there are three instances where ALTCS does not count VA Pension as income:
(1) The $90 Nursing Home Rule
(2) Housebound or Aid & Attendance benefits
(3) The amount of VA Pension added due to Unreimbursed Medical Expenses
Special rules apply to respresents of state nursing homes. Generally speaking, VA Pension is reduced to only $90 a month for ALTCS members living in a nursing home. However, the VA does not reduce Pension amount for ALTCS members who reside in a state nursing home. When ALTCS members residing in a state nursing home qualify for VA Pension, the VA does not reduce their Pension to $90 a month.
While the $90-a-month rule does not apply to state nursing home residents, ALTCS assesses a share of cost charge against the total Pension award that these residents receive. This means that ALTCS members who reside in a state nursing home must use a portion of their Pension to pay for a share of their nursing care. However, ALTCS members can take certain deductions from their income to reduce their share of cost. For instance, members can deduct Unreimbursed Medical Expenses and Housebound and Aid & Attendance Benefits from their income before ALTCS calculates their share of cost. This type of ALTCS planning helps members to keep a greater share of their Pension to themselves.
Unreimbursed Medical Expenses are medical expenses that a veteran will never be compensated for. The VA deducts these expenses from veterans’ income and widows’ income when calculating Veteran’s Pension and Death Pension. Because greater deductions ultimately lead to a greater Pension amount, applicants should fully understand how Unreimbursed Medical Expenses work. The following simple example illustrates:
A single veteran without dependents brings in $300 of monthly income, and has Unreimbursed Medical Expenses averaging $100 per month. The maximum Pension for a single veteran is $931 per month. The VA subtracts the applicant’s income of $300 from the $931 limit, entitling him to a $631 monthly Pension. However, the Unreimbursed Medical Expenses deduction increases this amount. After taking the $100 deduction, the applicant is entitled to $731 per month.
In this example, Unreimbursed Medical Expenses helped the applicant by increasing his Pension award by $100. In some instances, the result is even more dramatic, and proper income protection planningsometimes means the difference between qualifying and not qualifying for VA Pension.
In the context of applying for VA Pension, unreimbursed means unreimbursed in the strictest sense of the word. Veterans cannot report a medical expense if they ever expect to be reimbursed for it. Applicants can, however, report insurance co-pays for which they will never be reimbursed, so it is important for veterans to retain copies and receipts of medical bills for income protection planning.
Unreimbursed Medical Expenses are only countable after they have actually been paid. So if a veteran has $10,000 in outstanding medical bills, he cannot count the $10,000 unless he paid it. However, if this veteran were to pay $1,000 of his outstanding expenses, he could take a $1,000 deduction for Unreimbursed Medical Expenses. Timing is of the essence when it comes to calculating an Unreimbursed Medical Expense deduction, so applicants should consider working with a specialist in veteran’s asset and income protection planning to help them qualify for the appropriate Pension award.
Veterans can report any unreimbursed medical expense for which their household is responsible. In other words, applicants can report unreimbursed medical expenses for themselves, their spouse and their dependent children. For example, a veteran could deduct unreimbursed medical expenses for his annual physical, his wife’s emergency room visit and his child’s braces. However, these expenses can only be counted if they have actually been paid.
The following types of expenses can be included in the Unreimbursed Medical Expense deduction:
Prescription co-pays
Monthly Medicare premiums
Certain over-the-counter medications
Ensure for nutrition
Wheelchair rentals
Certain skin creams
In-home nursing care
This list is by no means exhaustive, and applicants should carefully consider each of their expenses to determine whether it is deductible. The VA reviews every expense that veterans deduct, so veterans uncertain about classifying an expense should err on the side of taking the deduction.
Applicants cannot deduct the cost of home care as an Unreimbursed Medical Expense. However, veterans who qualify for Housebound or Aid & Attendance benefits can receive additional assistance for such care. The VA awards these benefits in addition to Pension to help cover veterans’ medical needs. Veterans can speak with a specialist about Housebound or Aid & Attendance to determine whether veteran’s benefit planningcan help them qualify for the additional assistance.
Housebound and Aid & Attendance benefits help veterans and widows afford a higher level of care than they can obtain with Veteran’s Pension alone. These benefits increase the basic pension amount by $130 to $911 per month. For example, a single veteran who qualifies for the full Aid & Attendance benefit could have his Pension increased from $931 to $1,554 a month. This additional benefit can be quite helpful to veterans with costly medical expenses.
The VA awards Housebound and Aid & Attendance benefits to supplement Veteran’s Pension. And while these benefits have their own eligibility requirements, they are never awarded separately from Veteran’s Pension or Widow’s Pension. Housebound and Aid & Attendance benefits increase the Pension amount that a veteran already receives. As such, only applicants who qualify for Pension are eligible to receive Housebound and Aid & Attendance benefits.
Housebound and Aid & Attendance benefits are meant to help veterans pay for additional medical costs as their health worsens. So when applying for these benefits, veterans must prove to the VA that they require additional assistance. Applicants must provide verification from a physician that they suffer from a physical, psychological, psychiatric or mental disability that necessitates the additional support.
Only applicants who need the regular aid and presence of a caregiver for typical activities of daily living qualify for Aid & Attendance. In other words, Aid & Attendance benefits cover caregiver expenses for veterans who cannot provide their own care and comfort. When applying for the benefit, applicants must verify that they experience some or all of the following issues:
Recipients of Aid & Attendance also receive three other significant benefits:
ALTCS does not count Aid & Attendance as income, and thus does not assess a share of cost against the benefit. ALTCS members who receive Aid & Attendance can spend the entire amount on their care and comfort, without sharing it with ALTCS. ALTCS planning can help veterans attain this benefit.
Aid & Attendance recipients who reside in an assisted living facility enjoy a unique benefit. The VA deducts their room and board payments from their income as an Unreimbursed Medical Expense when calculating their Pension, which entitles them to a greater Pension amount.
Lastly, the VA Medical Center waives co-payments for any prescriptions they fill for Aid & Attendance recipients.
This site is informational only and should not be construed as legal advice. Receipt of this information does not create an attorney-client relationship. Please consult a knowledgeable attorney regarding your specific legal needs.
