A line from President Abraham Lincoln’s second inaugural address on March 4, 1865, “To care for him who shall have borne the battle and for his widow, and his orphan,” was the mission statement for the U.S. Department of Veterans Affairs (“VA”) for decades. The VA offers many different benefits to those who served in our armed forces and their family members. Some of the more known benefits include the VA home loan guarantee, which allows eligible veterans to purchase a home without a down payment and at relatively low fixed interest rates; the Montgomery GI Bill, that assists with paying qualified education expenses for veterans or their dependents; and enrollment in the VA health care system, which provides medical benefits to veterans, including long-term care services in a variety of different settings (such as an assisted living facility, nursing home, or the veteran’s own home).
One set of benefits that I find many people are either confused about or completely unaware of is the VA pension benefits program (collectively, “VA Pension Benefits”). Even once informed, many veterans scoff at the idea because they see these benefits as a handout. Instead, VA Pension Benefits should be viewed as benefits that veterans have earned by serving our county and as an attempt by our government “To fulfil President Lincoln’s promise to care for those who have served in our nation’s military and for their families, caregivers, and survivors.”[1] This article is focused on discussing the basics of VA Pension Benefits; however, I intend to publish a future article discussing the benefits and additional requirements for an individual who meets the requirements for the basic VA Pension Benefits to qualify for additional Aid and Attendance or Housebound benefits.
VA Pension Benefits – Generally
The VA Pension Benefits program is a needs-based, monthly benefit paid to veterans (and possibly certain family members) who are disabled for reasons that do not relate to military service.[2] VA Pension Benefits are often confused with disability compensation, which is paid to veterans who are disabled by injury, illness, or disease incurred or aggravated while on active duty, or alternatively, with the monthly pension given to individuals awarded the Congressional Medal of Honor.[3] However, it should be noted that if an individual is eligible for both VA Pension Benefits and disability compensation, they may not receive both and must elect to receive one or the other.[4] Technically there are three different types of VA Pension Benefits: Old Law Pension Program, Section 306 Pension Program, and the current pension plan (formerly known as the Improved Pension Program). However, since both the Old Law Pension Program and Section 306 Pension Program were phased out by December 31, 1978, an individual who was grandfathered into one of these programs is exceedingly rare.[5] Accordingly, all references in this article are to VA Pension Benefits administered under the current pension plan.
Maximum Benefit
I like to begin discussions on VA Pension Benefits with the potential cash benefits, to illustrate to clients why it is worth spending the time and effort evaluating and applying for VA Pension Benefits. The maximum annual pension rate (“MAPR”) is the maximum VA Pension Benefits an individual can receive in a given year. The amount varies based on whether the individual is a veteran, surviving spouse, or dependent child. Additionally, it is increased based on how many dependents the individual has. The following charts summarize the various MAPRs as of December 1, 2023.
| Veteran with no dependents | $16,551 |
| Veteran with at least one dependent | $21,674 (increased by $2,831 for each additional dependent) |
| Surviving Spouse with no dependents | $11,102 |
| Surviving Spouse with at least one dependent | $14,529 (increased by $2,831 for each additional dependent) |
| A qualified surviving child | $2,831 |
While the MAPR is the maximum annual benefit, it is reduced dollar for dollar for every dollar of income for VA purposes (discussed in more detail below). Thus, a significant portion of planning for VA Pension Benefits revolves around minimizing the individual’s income for VA purposes, to increase the monthly benefit the individual is eligible to receive. Additionally, as I mentioned above, this is only the basic MAPR, which can increase pretty significantly when aid and attendance benefits are obtained as well (for example, the MAPR for a veteran with at least one dependent raises to $32,729).
Overall Eligibility Requirements
Now that we know how much money is on the line, let’s begin to work our way through the requirements for benefits. VA Pension Benefits are best thought of in two different versions, one set that is available to veterans themselves (“Veterans Pension”) and another set that is available for their surviving spouses and children (“Survivors Pension”). Both share several aspects, but there are some differences in requirements and benefits.
For a veteran to establish entitlement to a Veterans Pension, the following elements must be shown:
- The veteran meets the service requirement;
- The veteran is permanently and total disabled, or is age 65 or older;
- The veteran’s countable income is below the MAPR;
- The net worth limitations are met; and
- The veteran meets the transfer test.
In order to establish entitlement to Survivors Pension, the following elements must be shown:
- The veteran met the service requirement;
- The individual has sufficient relationship to the veteran;
- The individual’s countable income is below the MAPR;
- The net worth limitations are met;
- The individual meets the transfer test;
- If the individual is a surviving spouse, then they must not have remarried; and
- If the individual is a child, then they must not be in the custody of a surviving spouse and must also be:
- Under the age of 18;
- Under the age of 23 and in school; or
- Permanently incapable of self-support before attaining the age of 18.
Veteran Service Requirement
The veteran service requirement requires that the veteran was not dishonorably discharged, and that one of the following is true about the veteran’s service:[6]
- They started on active duty before September 8, 1980, and they served at least 90 days on active duty with at least 1 day during wartime;
- They started on active duty as an enlisted person after September 7, 1980, and served at least 24 months or the full period for which they were called or ordered to active duty (with some exceptions) with at least 1 day during wartime; or
- They were an officer and started on active duty after October 16, 1981, and they hadn’t previously served on active duty for at least 24 months.
Under current law, the following are recognized as “wartime periods” for the above requirements:[7]
- Mexican Border period (May 9, 1916, to April 5, 1917, for veterans who served in Mexico, on its borders, or in adjacent waters);
- World War I (April 6, 1917, to November 11, 1918);
- World War II (December 7, 1941, to December 31, 1946);
- Korean conflict (June 27, 1950, to January 31, 1955);
- Vietnam War era for veterans who served in the Republic of Vietnam (November 1, 1955, to May 7, 1975);
- Vietnam War era for veterans who served outside the Republic of Vietnam (August 5, 1964, to May 7, 1975); and
- Gulf War (August 2, 1990, through a future date to be set by law or presidential proclamation).
Important to note is that the Gulf War period includes all dates from August 2, 1990, until the present date, unless and until some change in the law.
Veteran Age or Disability
As stated above, in order to be eligible for the Veterans Pension, the Veteran must either be at least 65 years old or be permanently and totally disabled from nonservice-connected disability not due to the veteran’s own willful misconduct.[8] For purposes of the Veterans Pension, the veteran is considered permanently and totally disabled if any of the following are true:[9]
- The Veteran is a patient in a nursing home for long-term care because of a disability;
- The Veteran is getting Social Security Disability Insurance or Supplemental Security Income;
- The Veteran is unemployable as a result of disability reasonably certain to continue throughout his or her life;
- The Veteran is suffering from a disability which is sufficient to render it impossible for the average person to follow a substantially gainful occupation, but only if it is reasonably certain that such disability will continue throughout the life of the veteran; or
- The Veteran is suffering from a disease or disorder determined by the VA to be of such a nature or extent as to justify a determination that persons suffering from that disease or disorder are permanently and totally disabled.
Survivors Connection to Veteran and Additional Requirements
An individual attempting to claim a Survivors Pension must show sufficient connection to the veteran, which requires the individual to meet the requirements of a valid surviving spouse or a surviving child. Most spouses and minor children will meet the requirements without any analysis, however, there are specific requirements for fringe cases. A child attempting to properly qualify must first be unmarried.[10] Second, the child must be a legitimate child of the veteran, have been legally adopted by the veteran, or a stepchild who is a member of the Veteran’s household or was a member at the time of the Veteran’s death.[11] Finally, the child must meet the age or disability requirements referenced above.[12]
A spouse attempting to claim a Survivors Pension must qualify as a valid surviving spouse. First, this requires that the marriage was valid under the law of the place where the parties resided at the time of marriage, or the law of the place where the parties resided when the right to benefits accrued.[13] Second, the couple must have been married before or during the veteran’s service, else the marriage must meet certain date requirements.[14] If the couple had a child together, whether before or after they were married, the date requirements are met.[15] Where there were no children born, the spouse must have been married to the veteran for at least one year prior to the veteran’s death or prior to certain delimiting dates (which generally follows the above defined wartime periods plus ten years).[16] Third, the surviving spouse must meet the requirement of continuous cohabitation. To meet this requirement, the spouse must demonstrate that either (1) the veteran and spouse were living together at the time of the veteran’s death, (2) they lived apart for medical, business, or other reasons, or (3) they were living apart at the time of the veteran’s death, but the spouse was not materially at fault in the separation.
Financial Requirements
Similar to Medicaid, VA Pension Benefits are needs-based, meaning that the individual attempting to claim VA Pension Benefits must meet certain countable income and net worth limitations. However, the two sets of rules have significant differences, with the VA Pension Benefits rules generally being more favorable to potential beneficiaries.
Income Limit
Since the calculation for net worth includes the individual’s annual income, we will start with a discussion of the income requirements. This is a good time to note that the specific income rules are very intricate and dependent upon a multitude of factors. For that reason, the following is a high-level summary of the income requirements.
Generally, for purposes of VA Pension Benefits, income is calculated annually and payments of any kind from any source are counted as income unless specifically excluded.[17] This definition is similar to the concept of an “accession to wealth” for income tax purposes.[18] For income generated on jointly owned property, income of the various owners is allocated in proportion to shares of ownership of the property.[19] Special rules apply for determining the countable income for children in the custody of a person legally responsible for their support.[20] Several types of payments are excluded from countable income, such as donations from public or private relief, welfare, or charitable organizations; maintenance payments furnished by a relative, friend, or a charitable organization; and amounts in joint accounts acquired by the death of the other joint owner.[21]
Certain unreimbursed medical expenses can be deducted from countable income to the extent they exceed five percent of the individual’s MAPR. Generally, the definition of “medical expenses” for VA Pension Benefits purposes are payments for items or services that are medically necessary; that improve a disabled individual’s functioning; or that prevent, slow, or ease an individual’s functional decline.[22] Additionally, certain educational expenses are allowed as a deduction against countable income.[23]
An individual’s countable income less allowable expenses is considered their income for VA purposes (often referred to as “IVAP”). As mentioned above, each dollar of IVAP will reduce the individual’s VA Pension benefits dollar for dollar.[24] This means that if an individual’s IVAP exceeds their MAPR for a given year, then they are ineligible for VA Pension Benefits that year.
Net Worth Limit
The net worth limitation for VA Pension Benefits purposes is adjusted each year by the same percentage as the Social Security cost-of-living adjustments.[25] From December 1, 2023, to November 30, 2024, the net worth limitation is set at $155,356.[26] This means that for an individual to be eligible for VA Pension Benefits in 2024, they must have a net worth of no more than $155,536. Net worth is the sum of the individual’s covered assets and IVAP.[27] Covered assets includes the fair market value of all real and personal property the individual owns unless specifically excluded.[28] Specifically excluded from the definition of covered assets are (1) a primary residence with a lot not exceeding two acres and (2) personal effects suitable to and consistent with a reasonable mode of life, such as household appliances and vehicles.[29]
Generally, the VA will consider the terms of a recorded deed or other evidence of title to be proof of ownership of a particular asset.[30] Importantly for married veterans, the value of their spouse’s assets is included in their covered assets.[31] Since surviving spouses and children cannot be married to qualify for a Survivors Pension, there is no similar requirement for them. Additionally, jointly owned assets are included in the individual’s net worth calculation equal to their proportional share of the asset. By default, the VA will include a dependent child’s net worth (countable assets plus IVAP) in the calculation for their parents’ net worth.[32] However, if the child exceeds the net worth limit, then their net worth is not included, but they are also not included as a dependent (and thus the parents’ MAPR is not increased for them as a dependent).[33]
Transfer Test
The final requirement to qualify for VA Pension Benefits is to meet the transfer test, which functions similar to the Medicaid transfer rules but with several key differences. This requirement was added to prevent individuals from transferring assets out of their name so that they meet the net worth limit discussed above. According to the regulations, VA Pension Benefits are “needs-based benefit[s] and [are] not intended to preserve the estates of individuals who have the means to support themselves.”[34] The rule generally provides that an individual attempting to obtain VA Pension Benefits will be penalized for certain transfers of assets that occurred with the 36 months preceding the individual receiving or attempting to obtain VA Pension Benefits.[35] This 36-month period is often referred to as the “look-back period.” A transfer in violation of the rule will result in a penalty period, during which the individual will be ineligible for VA Pension Benefits. The penalty period is calculated by dividing the total fair market value of assets transferred in violation of the rule by the MAPR for a veteran with one dependent divided by 12 (in 2024, the monthly penalty rate is $2,727).[36]
There are some very important additional requirements for the transfer test to be triggered. First, the transfer test only applies where an asset was transferred for less than fair market value.[37] Meaning that if an individual sells an asset for its actual worth, there is no penalty. Second, the transfer must be a covered asset that was part of the individual’s net worth.[38] This means that if the asset was excluded for the determination of net worth, such as primary residence that meets the requirements discussed above, then the individual is free to transfer them without concern for the transfer test. Finally, the value of the asset must be such, that had it not been transferred, the individual’s net worth would have exceeded the net worth limit.[39] In simplified terms, the individual is only penalized if they were not going to meet the net worth limits before the transfer. Thus, if the individual has a net worth of less than $155,356 in 2024, then they are free to transfer even countable assets for less than fair market value. Additionally, since this test did not exist prior to October 18, 2018, it does not apply to any transfers that occurred before that date.[40]
Conclusion
The VA system is non-adversarial. Meaning there is no advocate on behalf of VA opposing claims and no policy to minimize or deny benefits. VA decision makers are expected to be impartial and liberally apply VA’s pro-Veteran policies, procedures, and regulations in accordance with any applicable VA guidance. However, the requirements for VA Pension Benefits are extremely intricate. There are numerous moving parts that one should consider before undertaking the application process. Nonetheless, these benefits were designed to provide for those brave individuals that served our country and their survivors. Unfortunately, all too many individuals have no idea that they might be eligible for VA Pension Benefits. Even if they have heard about them, they likely are daunted by the lengthy requirements and application process. I encourage all veterans and their surviving spouses and children to reach out for assistance in evaluating whether they are eligible for VA Pension Benefits. Whether they contact an elder law attorney, veteran service officer, veterans’ organization (such as the VFW, American Legion, or DAV), or an accredited VA consultant, the sooner the better. Importantly, there are certain planning strategies that may be implemented to increase the benefit available to the individual for which an elder law attorney is likely the only reliable resource. If you believe that you or a loved one may qualify for VA Pension Benefits, please do not hesitate to reach out to me for a free consultation to discuss the options that may be available.
[1] This quote is the current mission statement of the VA.
[3] 38 C.F.R. § 3.3(a)(2) & 38 C.F.R. § 3.802.
[4] 38 C.F.R. § 3.701.
[5] Veterans’ and Survivors’ Pension Improvement Act of 1978, Pub. L. No. 95-588, § 306(a)(1) and (2), (b)(1) and (2).
[6] 38 C.F.R. § 3.12 & 38 C.F.R. § 3.12a.
[7] 38 C.F.R. § 3.2.
[8] 38 C.F.R. § 3.3(a)(3)(vi).
[9] Id.
[10] 38 C.F.R. 3.57.
[11] Id.
[12] Id.
[13] 38 C.F.R. § 3.1(j). Additionally, it should be noted that there are certain specific situations where even though the spouse and veteran were not legally married due to a legal impediment, the VA will consider them as married. For more details see 38 C.F.R. 3.52.
[14] 38 C.F.R. § 3.54.
[15] 38 C.F.R. § 3.54(a).
[16] Id.
[17] 38 C.F.R. § 3.271.
[18] See Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 431 (1955).
[19] 38 C.F.R. § 3.271(d).
[20] See 38 C.F.R. § 3.24(c).
[21] 38 C.F.R. § 3.272.
[22] 38 C.F.R. § 3.278(c).
[23] 38 C.F.R. § 3.272(i).
[24] 38 C.F.R. § 3.23(b)
[25] 38 C.F.R. § 3.274(a).
[26] See https://www.va.gov/pension/veterans-pension-rates/.
[27] However, it should be noted that the individual’s IVAP for net worth purposes can only include unreimbursed medical expenses which are reasonably predicable. See 38 C.F.R. § 3.272(g).
[28] 38 C.F.R. § 3.275(a).
[29] 38 C.F.R. § 3.275(b).
[30] 38 C.F.R. § 3.275(a)(1).
[31] 38 C.F.R. § 3.274(c)(1).
[32] 38 C.F.R. § 3.274(d).
[33] Id.
[34] 38 C.F.R. § 3.276(b).
[35] Id.
[36] 38 C.F.R. § 3.276(e).
[37] 38 C.F.R. § 3.276(a)(2)(ii).
[38] 38 C.F.R. § 3.276(a)(2)(i).
[39] 38 C.F.R. § 3.276(a)(2)(iii).
[40] 38 C.F.R. § 3.276(b).
