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So How Does the Pension Work?
There are three basic criteria for the Pension
and they build on each other in a stair-step fashion
3 Step Criteria
There are three basic criteria for the Pension and they build on each other in a stair-step fashion
Step One - Military Service
If The Veteran
1.Served on Active Duty at least one day during a Period of War, at least 90 days in total and were other than dishonorably discharged - note that If the veteran entered active duty after September 7, 1980, generally he/she must have served at least 24 months or the full period for which called to active duty
a. Or, in the case of a surviving spouse, were married to someone at the time of their death who met Number 1
Then the Military requirement has been met and the question becomes If or When are the Two remaining Criteria met?
Criteria Two - The Medical Requirement
Here we have to determine the level of need - Why? Because this program starts with Basic Pension and depending on your level of physical medical need, the VA gives you a medical rating which can add more dollars to your eventual Pension award.
While the Veteran is alive, only their medical situation determines the rating. If the veteran has passed away, the Surviving Spouse's medical condition determines the rating. In VA parlance, the claimant is the only one with a rating and if the veteran is alive, the veteran is the claimant.
Ask yourself these questions to determine the Medical rating the claimant is likely to receive from the VA:
Is the Veteran or Surviving spouse unable to leave his home alone but needs no other assistance? They may be able to get the Pension at the Housebound Level
Is the Veteran or Surviving spouse in need of the assistance of another person with Activities of Daily Living such as bathing, dressing, eating, getting in or out of bed or a chair (mobility) or personal hygiene such as toileting? If Yes, they may be able to get Pension at the Aid and Attendance level
Is the Veteran or Surviving spouse in need of regular supervision because a physical, mental, developmental or cognitive disorder requires care or assistance on a regular basis to be protected from the hazards or dangers related to their daily environment? If Yes, they may be able to get Pension at the Basic, Housebound or Aid and Attendance level depending on the level of need.
Is the Veteran Well but their Spouse is Housebound or in need of the assistance of another person with Activities of Daily Living? They may be able to get Basic Pension
EXCEPTION to Medical Criteria - Is the Veteran well, whether married or not and the household income minus any medical insurance payments less than the annual Basic pension rate? Then we could be looking at Basic Pension. Note that you need to look at the appropriate rate of pension which is dependent on marital status and number of dependents. Surviving Spouse can get Basic Pension too, if your income less medical insurance is less than the annual Basic Pension for a Surviving Spouse, you are leaving money on the table and need to consider filing!
Criteria Three - The Financial Criteria
The Financial Criteria is a two pronged test, Income and Assets –
Income – the Household income of the claimant ( that means that a married veteran must include his spouse’s income) must be less than the Pension the claimant is going for – either Basic Pension, Basic pension with Housebound or Basic Pension with Aid and Attendance – BUT and it’s a BIG but – when determining income, you get to deduct regularly occurring medical expenses – what you can deduct depends on the medical rating
No medical rating? Deduct your medical insurance premiums, including Medicare.
Housebound? Deduct your medical insurance premiums, including Medicare and the cost of your home care, if any. And if you are housebound because a physical, mental, developmental or cognitive disorder requires regular supervision, you can deduct the cost of your independent or assist living fees.
Aid and Attendance? Deduct your medical insurance premiums, including Medicare and the cost of your home care and independent or assist living fees.
The VA regulation requires that Medical expenses equal to the first 5% of the Basic Pension (without looking at amount associated with the Medical rating) be excluded when deducting your medical expenses- very similar to the medical expense amount you can deduct on your taxes.
When you take your income and minus these recurring medical expenses you are left with Income for VA Purposes – if that number is less than the Pension at the Medical Rating you are going for, then you pass the Income Criteria!
Assets – the amount of assets you can have depends on how negative your Income for VA Purposes is – the bigger the negative, the more you can have in assets – anyone who tells you that the claimant can only have $X in assets without doing an analysis is someone you should run from! In 2014 there were 40 claimants granted the benefit with more than $119,000 in assets – 39 of them were clients of ERBC. Assets, excluding your primary home, one car and your normal personal possessions, may keep you out of the pension today, but
Knowing the If and When you are eligible
is something Every Veteran and Surviving Spouse
should have in their Retirement Tool Box
Professional Assistance without Financial Product Sales
if you need assistance scheduling your phone appointment
Call 508 485-0039 Or 833 VA AWARD
Elder Resource Benefits Consulting 365 Boston Post Road #390 Sudbury, Ma 01776
For representation before the VA, ERBC refers to Servaes Consulting Group, LLC so you can be assisted by a VA Accredited Agent.
Neither Elder Resource Benefits Consulting nor the Servaes Consulting Group, LLC is affiliated with the Department of Veterans Affairs or any other government agency. Elder Resource Benefits Consulting and the Servaes Consulting Group, LLC are not Veterans Services Organizations.