For years, clients have asked about pension benefits available from the Department of Veterans Affairs (VA). Because of this consistent client interest, I’ve written about VA pension benefits with Housebound or Aid and Attendance Supplement in many blog posts over the years. However, one issue I haven’t blogged about yet involves calculating the amount of the benefit payable to a veteran. Determining the amount of the VA pension is not straight-forward. This is because, unlike Social Security, Supplemental Security Income (SSI), private pensions and other types of benefits, the amount of the VA pension benefits payable to a veteran is not standardized. Rather, the pension amount varies, and is dependent upon two (2) factors: (1) the amount of medical expenses incurred by the veteran which are not reimbursed by insurance or other third party payer, and (2) the amount of the veteran’s income other than VA benefits. There is a formula that can be used to calculate the approximate amount of a VA benefit payable. The formula follows, and is based upon the pension payable to an unmarried veteran:
(1) Multiply the maximum VA pension benefit payable to the veteran for the category of benefit the veteran will apply for (either Base Pension, or Base Pension with Housebound or Aid and Attendance) by 5% = 5% of the maximum benefit payable, called N1.
(2) Calculate the veteran’s total unreimbursed medical expenses, including Medicare Part B, C or D deductions, private medical insurance, prescription drug costs, home health aides, assisted living facility or nursing home costs, incontinence supplies and other medical expenses, and subtract N1 (5% of the maximum benefit payable). The result will be the approximate amount of the countable medical expenses, called N2.
(3) Calculate the veterans gross annual income, including gross wages, Social Security, Civil Service, Railroad, Military Retirement, and other pension benefits, Workers’ Compensation, Unemployment Compensation, Black Lung Benefits and interest and dividends, and subtract N2 (Countable Medical Expenses) = Countable Income, called N3.
(4) Subtract N3 (Countable Income) from the maximum VA pension benefit payable to the veteran for the category of benefit the veteran is applying for = Approximate amount of the pension benefit that will be awarded by the VA.
Observations based on the above formula:
A. If Countable Income (called N3 above) exceeds the maximum pension amount for a single veteran, the monthly pension amount should be zero.
B. If Countable Income is a positive number but less than the maximum pension amount for a single veteran, the pension amount should be the difference between the two figures.
C. If Countable Income is a negative number, the monthly pension amount should be the maximum pension amount payable to a single veteran.