The Income Eligibility Requirement for a Veterans Pension Benefits
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Veterans Benefits Attorney
The Income Test: The household income of a veteran or the surviving spouse of a veteran cannot exceed the Maximum Allowable Pension Rate (MAPR) (we list 9 categories of pension income applications in the section on how the pension is calculated.) As an example, a husband and spouse with no medical expenses cannot have combined income of more than $1,360 a month or $16,324 a year from all sources. As another example, a single surviving spouse with an “aid and attendance” medical rating cannot make more than $1,038 a month or $12,465 a year from all sources.
If a potential applicant were to call a local VA office, the Veterans Service Representative (VSR) on the phone would typically ask about the amount of household income, the amount of assets and the medical status of the prospective applicant. The VSR would check his or her table similar to ours below and if the household income exceeds the MAPR for that particular type of application category, the person calling the office would probably be told there is no benefit. In many cases this is simply not true. Keep in mind, however, some VSR’s are aware of the special medical deduction and may not discourage callers in cases such as these.
Household income can be reduced to meet the income test under the conditions we have mentioned above. This allows households earning $2,000 to $6,000 or more a month to qualify for a Veterans Pension even though their current non-adjusted income does not meet the income test.
Let’s use an example to show how this works. Suppose a veteran and spouse earn $4,000 a month. They do not meet the income test of making less than $1,220 a month or $14,643 a year for this particular benefit. However, the VA will allow the household income to be reduced by any un-reimbursed medical expenses that are incurred in the month of application or any expenses that recur regularly over the coming 12 months. A good example of a recurring expense is the cost of medical insurance such as Medicare Part B ($96.40 a month), supplemental Medicare plans, drug plans, co-pays, etc.
In our example, the VA will take all sources of income over the next 12 months and add them together. Assume that the only source of income is the recurring $4,000 a month from Social Security and retirement pensions. In this case, VA uses $48,000 as the starting point for the income test. Next, medical expenses are added up. The family reports $500 of medical expenses in the month of application and $192.80 (the amount both are paying) a month for un-reimbursed Medicare Part B premiums. The veteran is also in an assisted living facility and is paying $4,500 a month for this care which is also un-reimbursed. Payment for assisted living is coming from savings and income. Only recurring medical expenses can be deducted and so the assisted living facility charges each month qualify as an unreimbursed medical expense.
All medical expenses in the month of application and those that are expected to recur every month over the next 12 months (beginning on the first day of the month following the month of application) are added together and they total $5,500 per month. Next, VA subtracts a deductible equal to 5% of the basic MAPR which is $732. After the deduction, the allowable month’s medical expense is now $4,800.80. This amount is subtracted from the $48,000 prospective 12-month income in order to arrive at a new income called “countable” income or IVAP. This new income will be used for the income test. It is obvious this $5,500 of monthly medical expense will bring the household countable income below $14,643 a year to pass the income test and the family will receive the entire pension benefit.
Before we give up with this example, we need to make you aware again there is a special provision in the rules that allows all of the veteran’s costs for assisted living to be counted as a deductible medical expenses. This has to do with a so-called “rating.” We won’t go into the necessary evidence or paperwork required for a rating but assuming our veteran gets this rating, he can now count his entire cost of assisted living or $48,000 towards determination of his income test. In this example, his rating is for “aid and attendance” and he gets an additional allowance that increases the family MAPR up to $22,113.
Along with his other medical expenses he can now use $66,000.60 towards his medical expenses — adjusted for the deductible. Subtracting that amount from his $48,000 of income he now has a negative countable income which puts him well below the MAPR of $22,113. Subtracting the countable income from MAPR gives him an award from VA of $20,994.60 or $1,749 a month in additional income. This is on top of the income he is already making and will help cover the cost of his assisted living.
This special provision for annualizing and deducting medical costs associated with a disability medical rating also applies to home care costs and nursing home costs. Home care costs can include the costs of professional aides or money paid to members of the family (not including the spouse), friends or people hired independently to provide care in the home. The special provision also applies to the non-veteran spouse receiving assisted-living care or home care but in this case there is no rating. Another special rule allows the spouse to deduct non-medical costs associated with medical care for determining countable family income (ie., mileage to doctors, hotel stays, co-pays, etc.).
Veterans Benefits For NJ Benefits and Their Surviving Spouse
I’m sure you have questions on this difficult subject. I want you to call me personally to set up a convenient in-office consultation.
Please contact Fredrick P. Niemann, Esq., an Accredited Veterans Benefit Attorney Toll-Free (855) 376-5291 or email him at email@example.com
Fredrick P. Niemann, Esq. NJ Veterans Benefits Attorney
New Jersey Veterans Pension | The Income Test | New Jersey Veterans Pension Lawyer | Financial Eligibility | Income Limits