Questions and Answers about Pension Claims

Who can submit a claim?

A claim is submitted by the veteran or by the veteran’s single surviving spouse in the case of a death claim. A duly appointed service organization, an employee of the local regional VA office, or a VA approved agent may file a claim on behalf of the veteran or the spouse. A claim cannot be filed with a general or durable power of attorney. The application will be sent back requesting proper documentation for a VA power of attorney. The veteran must sign a document specifically authorizing a power of attorney for someone to submit an initial claim for him. Many chagrined children with a state authorized durable power of attorney have submitted claims on behalf of a parent only to have the claim rejected by VA.

What happens if the veteran is incompetent?

If the veteran cannot submit the original application or sign a power of attorney for a surrogate to file an application, then a duly appointed guardian can complete the application. VA also allows the spouse, a parent or next of kin, or a friend to complete and submit an application on behalf of an incompetent veteran if that person submits the proper power of attorney request and indicates the applicant could be considered incompetent for financial affairs. Even though the veteran or surviving spouse may be considered incompetent for financial affairs, he or she must always sign the power of attorney request if he or she is can physically do so. VA may appoint a fiduciary to take over the the financial management of pension funds for the claimant if VA determines he or she is incompetent.

What is an "aid and attendance" or "housebound" rating?

A "rating" is granted by a veteran service representative where a condition exists that requires more caregiver support for the disability. Medical evidence is required unless someone is a patient in a nursing home, and then the requirement is waived. The rating allows VA to pay an additional monthly amount of Pension or Compensation to a veteran or a surviving spouse for additional costs associated with this disability.

How does one qualify for aid and attendance or housebound rating?

The application form has a block allowing for a request for either rating. Submitting medical evidence in advance instead of waiting for a request from VA can help expedite the process of getting this rating.

Can the non-veteran spouse of a living veteran receive a rating for aid and attendance or housebound?

If the veteran is receiving Compensation and is at least 30% or more service connected disabled there is an allowance available if the spouse needs aid and attendance or is housebound. An aid and attendance or housebound allowance is also available to a surviving spouse receiving DIC. According to VA, a rating is not available to the non-veteran spouse of a living veteran for Pension. A rating is available to the single surviving spouse for death Pension.

What documentation is required?

The veteran must provide an original copy of discharge from service, typically a DD 214 or a WD. A photocopy is allowed if it is certified by a government agency recognized to do this. This could be the local courthouse. For a death benefit, a death certificate must be furnished as well. VA may request copies of other documents, but, generally, providing sufficient information on the claim form will satisfy the need for other documentation. If an applicant for Pension is younger than 65, medical evidence of total disability must also be submitted. Total disability for 65 and older is not a requirement for death Pension.

What is the effective date?

The effective date is generally the day VA receives an original application. If it takes three months for the process of approval or six months, it doesn't matter. The effective date still reverts to receipt of the original application.

When does payment begin?

Generally, payments start on the first day of the month following the month of the effective date. This means that if it took six months to get approval, at least five months of benefit will be paid retroactively. VA requires automatic deposit of awards in a checking or savings account.

What happens if the veteran dies during the period of application?

If the veteran dies during the period of application and the application was not approved prior to the death, there may be accrued benefits. If the regional office had all of the information in its possession that would have led to an approval, then there is an accrued benefit payable. Otherwise there is none. The full benefit is available up to the month of death of the veteran and to a surviving spouse through an application on VA Form 21-0847 (REQUEST FOR SUBSTITUTION OF CLAIMANT UPON DEATH OF CLAIMANT). If a claimant dies while a claim or appeal for any benefit under a law administered by the Secretary is pending, a living person who would be eligible to receive accrued benefits due to the claimant under section 5121(a) of this title may, not later than one year after the date of the death of the claimant, request to be substituted as the claimant for the purposes of processing the claim to completion.

A new claim for death pension can also be started using VA Form 21-534ez.

What is a veteran’s federal fiduciary, and does that affect the application?

For a veteran who is considered incompetent to handle his own financial affairs, VA will appoint a fiduciary to receive the money and pay the bills. A federal fiduciary is an individual appointed for this purpose, usually a spouse or a family member. In most cases -- except for the spouse living with the veteran -- there is an interview required and paperwork. This process can take a long time, and it is to the advantage of the person filing an original claim to request the appointment of himself or herself as a fiduciary or for some other appropriate person or organization to act as a fiduciary in order to help expedite the process. VA always makes the final decision on whom it appoints as a fiduciary. In fact, the agency might well ignore court appointed fiduciaries. In general, the decision favors declaring the veteran competent and avoiding a fiduciary where at all possible.

What is the difference between Compensation and Pension?

Compensation is paid for service-connected disabilities; whereas, Pension is paid to veterans who are disabled because of non-service-connected causes. Compensation is meant to compensate a veteran for loss of income due to the disability. Pension is meant to provide more income to low income, disabled, active duty veterans who served during a period of war.

Which benefit is better?

The veteran can choose the larger of either benefit but cannot have both. If the veteran is receiving military retirement or has received other reimbursement related to military service, those monies will be reduced by the amount of Compensation. There are special rules for reducing this offset for veterans who are 50% or more disabled. Pension does not reduce military retirement. For veteran families with expensive home care services, assisted living, or nursing home costs, Pension is could be the larger benefit.

Can a veteran apply for Compensation years after leaving the military?

A recent survey by VA found that a large percentage of older veterans had never applied for Compensation but could be eligible based on injuries or illnesses incurred while they were in the service. A veteran can apply for these benefits at any time. Agent Orange claims and PTSD claims are in this category.

Can a veteran receiving Compensation reapply for additional income?

Many veterans are receiving Compensation, but their disability related to service may have become worse. They can apply for a higher disability rating and thus more money at any time. There are also additional benefits for veterans who may have lost limbs, eyesight, hearing, or the use of other parts of their body.

Can a veteran receiving military retirement pay also receive Compensation?

A veteran cannot receive Compensation and military retirement at the same time. Generally, the veteran will waive a portion of military retirement that equals Compensation because retirement is taxable and Compensation is not. Since 2004 military retirees with a VA rated disability of 50% or more are no longer being required to waive military retirement pay to receive VA disability Compensation. This new law is being phased in over a 9-year period. However military retirees with a VA rated disability of 40% or less are still required to waive a portion of their military retirement pay to receive Compensation.

What is the income test for Pension?

If the household income adjusted for medical expenses is greater than the maximum allowable Pension rate -- MAPR -- there is no benefit. In December 2013 - December 2014, the maximum allowable rate for a couple with aid and attendance allowance is $25,022 a year. For a single veteran it is $21,107 a year. Without aid and attendance or housebound allowance the maximum couple's rate is $16,569 a year and for a single it is $12,652 a year. Death Pension rates are lower. People seeking a benefit with adjusted incomes greater than these levels will be denied.

Can a household with income above the maximum limit qualify?

A special provision in the way benefits are calculated can allow individuals and couples earning between $24,000 to $60,000 a year to still qualify for a benefit. It has to do with the treatment by VA of the very large recurring medical costs associated with home care, assisted living, or nursing home care.

What is the Pension household asset test, and what can be done if the asset test is not met?

As a general rule assets cannot exceed $80,000. But there is no specific test in the regulations. Veterans service representatives are required to file paperwork justifying their decision if they allow assets greater than $80,000. Thus this amount has become a traditional ceiling. The service representative is encouraged to analyze the veteran's household needs for maintenance and weigh those needs against assets that can be readily converted to cash. In the end, the decision as to allowable assets is a subjective decision made by a service representative. In certain cases a benefit award could be denied unless assets are below $20,000 or $10,000 or even zero dollars.

What proofs and documents are required with the Pension claim?

We have already discussed the requirements for power of attorney and fiduciary if they apply. In addition, an original copy of the discharge from service -- typically DD 214 or form WD -- is required and the discharge must have been other than dishonorable. If there is a question about the marriage relationship, a marriage certificate or other proof may be necessary. Birth certificates of dependent children are usually not required but may be necessary under certain conditions. A dependent child is a minor, a dependent student under age 23, or a totally dependent adult child. There are certain documents that need to be submitted to prove future recurring medical expenses and to prove need for aid and attendance or housebound allowances. VA does not furnish these documents nor provide any information that they are required.

Can someone charge to help fill out the form?

Federal code and VA regulations prohibit an agent or attorney from charging a fee to fill out an application prior to denial of an appeal. Some practitioners or providers help their clients for free, sometimes in the context of solving other retirement issues or providing long term care services. Some practitioners offer advice for a fee but will send their clients to a veterans' service organization to complete the application. Charging a fee for advice not related to assistance with a claim for benefits appears to be an acceptable practice allowed by VA.

How are assets, income and unreimbursed medical expenses determined?

The applicant must submit details on the application of all income and all assets including retirement savings accounts such as IRAs. Almost any type of money received or anything received that can be converted into money is income. The only exclusions for assets are a personal residence and a reasonable amount of land it sits on as well as vehicles and other personal possessions. Personal possessions used as an investment such as a coin collection are counted as assets. Unreimbursed medical expenses can be almost any expense related to medical needs.

Are there any other reporting requirements?

VA requires that any change in income or assets be reported immediately. The award is calculated for 12 months in advance, but at the beginning of each calendar year, a formal report called an EVR (eligibility verification report) must be filed detailing all income, assets and unreimbursed medical expenses for the coming calendar year. For example if the award is granted in April for 12 months in advance, an EVR must be submitted in January of the next year that could affect the award amount for the remaining four months. The EVR will be used for determining benefits for the calendar year on which it is based and possibly adjusting benefits already received or even demanding repayment for overpayment of benefits.

Will the Pension benefit pay a non-licensed home care provider?

VA does not pay providers directly but provides extra income to make up for the cost of medical care providers. Medical conditions or injuries or diseases that require a need for ongoing home care will allow the applicant to reduce household income by the cost of home care making it possible to receive the additional income from a Pension award. If the beneficiary has an aid and attendance or housebound allowance, VA will pay non licensed providers.

Will the Pension benefit pay a member of the family to provide care at home?

As explained above, VA will not pay providers directly but only indirectly through extra income. If the beneficiary receiving care in the home has received a rating for aid and attendance or housebound, VA will allow expenses paid to a family member for care to be counted as unreimbursed medical expenses to qualify for the benefit.

Does the Pension benefit pay the costs of a nursing home?

The application form has provision for indicating residency in a nursing home and whether or not the applicant is eligible for Medicaid. VA will automatically apply the monthly cost of the nursing home in determining the Pension benefit. If the applicant is single with no dependent children at home and is eligible for Medicaid, VA is required to stop any payment of benefits and only provide the veteran with $90 a month.

Does the Pension benefit pay the costs of assisted living?

As explained above, VA will not pay providers directly but only indirectly through extra income. If the beneficiary receiving care in assisted living has received a rating for aid and attendance or housebound, VA will allow expenses paid to assisted living for aid and attendance or housebound including room and board to be counted as unreimbursed medical expenses. The cost of assisted living being used as a retirement residence is not considered a medical expense.

What are the requirements to receive a Death Pension benefit?

The applicant must be a surviving spouse or a dependent child of an eligible veteran. VA form 21-534ez is used to apply for death Pension, death Compensation, accrued benefits, or dependency and indemnity Compensation (DIC). The surviving spouse must be single. A surviving spouse of any age is eligible as long as the deceased veteran served at least 90 days during a period of war. They had to be married at least a year prior to death or have a child as a result of the marriage. There is no requirement for total disability for the surviving spouse nor for the deceased veteran to have been totally disabled or older than age 65.

How does one prove that unreimbursed medical expenses will recur every month?

VA has specific rules for proving future recurring medical expenses. Information in our book outlines the type of paperwork that must be submitted for each type of long term care service. Neither the claims form nor information from the regional office provides any guidance on the rules for proving future recurring medical expenses for home care or assisted living. One simply has to know how to do it.

What if the veteran or spouse is currently receiving Medicaid?

Our interpretation of the rules leads us to believe that VA will not consider Medicaid payments as income. However, Medicaid will consider the non-allowance portion of the Pension to be income. This could affect Medicaid eligibility in income test states. There is evidence that some income test states count the entire Pension benefit including the allowance as income. According to federal Medicaid rules this should not happen.

What happens when the veteran or spouse wants to receive Pension & Medicaid together?

Federal law requires that a single veteran receiving Medicaid with no spouse or dependent children can receive no more than $90 a month from VA. Veterans in state veterans homes are exempt from this requirement. The veteran with a spouse can receive the benefit to help defray the costs of a nursing home. As a general rule, the Pension benefit would probably not work if Medicaid were paying the bill. But the benefit does work well for non-Medicaid nursing home beds and while the recipient is going through the Medicaid spend down. We highly recommend you use an aid and attendance benefits consultant when trying to make Pension and Medicaid dovetail without getting into trouble with Medicaid rules.

Pension -- Maximum Annual Pension Rates (MAPR) 2015-16

These amounts increased by 1.7% on 12 / 01 / 2014