Your yearly family income must be less than the amount set by Congress to qualify for the Veterans Pension benefit. If eligible, your pension benefit is the difference between your “countable” income and the annual pension limit set by Congress. VA generally pays this difference in 12 equal monthly payments.
Income and Net Worth Limitations
Countable income includes income from most sources as well as from any eligible dependents. It generally includes earnings, disability and retirement payments, interest and dividend payments from annuities, and net income from farming or a business. Some expenses, such as unreimbursed medical expenses, may reduce your countable income.
Net worth includes assets such as bank accounts, stocks, bonds, mutual funds, annuities, and any property other than your residence and a reasonable lot area. You should report all of your net worth. VA will determine whether your assets are of a sufficiently large amount that you could live off of them for a reasonable period of time.
Hypothetical Example VA Pension Benefit Calculation
Your pension is calculated to be an amount equal to the difference between your countable family income and the annual pension limit set by Congress.
- If, for example, the annual income limit on December 1, 2005, for a Veteran and spouse, as set by Congress, is $13,855 and your income combined with your spouse's income is $10,855, your VA pension will be $3,000 ($13,855 - $10,855 = $3,000) paid in monthly installments.
- If your total countable family income is more than $13,855 in this example, then you are not eligible for a VA Pension for that year. You may reapply again at any time your countable income falls below the limit.
- A portion of your unreimbursed medical expenses (what you paid out of pocket after medical insurance pays) may reduce your countable income. Using the example above for combined family income ($10,855):
- If your medical expenses for a year are $8,000 and your medical insurance pays $6,400 of that, your unreimbursed medical expense is $1,600.
- That portion of your unreimbursed medical expenses ($1,600 in the example above) which is more than 5% of the maximum rate of pension, or $693 in this example ($13,855 x .05 = $693), may be deducted from your total combined income which then increases the amount VA will pay to you.
- Since the $1,600 out of pocket expenses is greater than $693, you may reduce your family income by $907 ($1,600 - $693). So, your income for VA pension purposes is now $9,948 ($10,855 - $907).
- Your VA pension would then be $13,855 (maximum rate for a veteran with a spouse) minus $9,948 (total family income after deducting unreimbursed medical expenses), or $3,907 for that year.