Veterans of Foreign Wars
Department of Illinois Service Office
2122 W. Taylor St., Rm 105
Chicago, IL 60612
312-980-4284
PENSION
vs
COMPENSATION
Compensation
Monthly benefit paid based on a
disability incurred in or
aggravated by military service.
Income from other sources is
not a factor.
Pension
Monthly benefit paid based on a
disability not incurred in or
aggravated by military service.
Income based benefit.
Pension Requirements
• Service Time: Veteran must have served 90
days with at least ONE day during war time.
• Veteran totally disabled by age or facts
shown
• Net worth determination- estate under
$80,000 excluding family home
• Limited household income
War Time Periods
• World War I: April 6, 1917, through November 11, 1918,
inclusive. If the veteran served with the United States
military forces in Russia, the ending date is April 1, 1920.
Service after November 11, 1918 and before July 2, 1921 is
considered World War I service if the veteran served in the
active military, naval, or air service after April 5, 1917 and
before November 12, 1918.
• World War II: December 7, 1941, through December 31,
1946, inclusive. If the veteran was in service on December
31, 1946, continuous service before July 26, 1947, is
considered World War II service.
War Time continued
• Korean War: June 27, 1950, through January 31, 1955,
inclusive.
• Vietnam War: The period beginning on February 28, 1961
and ending on May 7, 1975, inclusive, in the case of a
veteran who served in the Republic of Vietnam during that
period. The period beginning on August 5, 1964, and
ending on May 7, 1975, inclusive, in all other cases.
• Persian Gulf War: August 2, 1990, through date to be
prescribed by Presidential proclamation or law.
Veteran or Surviving Spouse?
• Veteran’s basic entitlement requires
determination of total disability by age or
facts shown
• Widow(er)’s basic entitlement is
presumed regardless of age or factual
disability
3 Levels of Disability Pension
• Basic - Permanent and total (P&T):
– The veteran is deemed unemployable by age or facts shown
• Housebound (HB):
– The veteran or surviving spouse is deemed totally disabled
PLUS is demonstrated to be unable to leave the residence
without assistance of another person
• Aid and Attendance (A&A):
– The veteran or surviving spouse requires assistance with
activities of daily living (bathing, dressing, toileting, meal
preparation, etc or is a resident in state licensed nursing
home)
Disability Determination
If the veteran is under age 65 total
disability must be proven unless in the
receipt of Social Security Disability, or
similar other federal or state benefit, in
which case total disability is presumed and
no medical determination is necessary.
Disability Determination
If the veteran is over age 65, total disability
is presumed and no medical determination
is necessary.
Housebound Benefits
Intermediate rate of pension.
Housebound benefits are granted when the
claimant (veteran or surviving spouse) is
essentially confined to the home.
Entitlement to Housebound benefits
requires a factual determination by the VA
Rating Board evaluating all disabilities.
Aid & Attendance Benefits
Highest rate of pension.
A&A is granted when the medical shows
that the claimant is so disabled as to
require the aid and attendance of another
person to protect them from the hazards of
daily life and to assist with activities of
daily life OR is a resident in a state
licensed nursing home and certified to be
receiving nursing care.
Estate Assets
• The VA has an $80,000 asset threshold:
– Bank accounts
– CD, IRA, money market
– Real Property (not including the family home)
• Cases involving assets over the threshold,
require an administrative decision.
• Lower asset limits may be applied in special
cases such as advanced age or terminal case.
Income
• Pension is a claim for an income-based
benefit AND must be denied if countable
income exceeds the applicable income
limit.
• The level of countable income determines
the rate of VA benefits. VA benefits are
reduced dollar for dollar by countable
income.
Types of Income
•
•
•
•
•
•
Employment wages
Social Security
Retirements
Annuities
Interest
All other income except SSI or General
Assistance (State or Federal)
Adjusted Income = IVAP
• The VA may reduce the countable annual
income for any non-reimbursed medical
expenses which exceed $612 annually for a
single vet ($802 vet w/ 1 Dep). Some medical
expenses may be projected as recurring.
-
=
IVAP
Examples of Medical Expenses
• Medicare Deductions
• Private Health
Insurance Premiums
• Rx Co-payments
• Meal Supplements
and/or Vitamins (if
order by Doctor)
• Mileage to Doctor
Appointments
• Dental Work
• Eyeglasses
How Much $ Does VA Pay ?
VA pays the difference between countable
family income and the yearly income limit
based on the number of dependents.
This difference is generally paid in 12 equal
monthly payments rounded down to the
nearest dollar.
2012 Disability Pension Maximum
• Veteran without dependent $12,256 ($1021 per mo)
• Veteran with one dependent $16,051 ($1337 per mo)
• Veteran permanently housebound - no dependents
$14,978 ($1248 per mo)
• Veteran permanently housebound - one dependent
$18,773 ($1564 per mo)
• Veteran needing regular aid and attendance - no
dependents $20,447 ($1703 per mo)
• Veteran needing regular aid and attendance - one
dependent $24,239 ($2019 per mo)
2012 Survivor’s Pension Maximum
• Widow(er) $8,219 ($684 per mo)
• Widow(er) with Housebound $10,046 ($837
per mo)
• Widow(er) with Aid & Attendance $13,138
($1094 per mo)
• Medical expense exclusion - $410 per year
Evidence Requirements?
•
•
•
•
•
•
•
•
Discharge
Marriage Certificate
VA Form 21-526 – veteran application
VA Form 21-534 – widow(er) application
VA Form 21-2680 – medical evaluation
VA Form 21-8416 – medical expenses
VA Form 21-8049 – family household expenses
Home Care provider statement
Benefit Calculation
The formula calculation is:
• Reportable medical expenses – deductible =
allowable medical expenses.
• Reported income – allowable medical
expenses = income for VA purposes (IVAP)
• Maximum benefit – IVAP = annual payable
benefit
• Annual payable benefit / 12 = monthly
benefit
Lets look at a realistic situation:
Veteran is married, 87 years old, has Alzheimer's
and suffers from the residuals of stroke. Vet has
been prescribed by his doctor to be in the need of
HOME BASED nursing care due to his disabilities.
His doctor has completed VA Form 21-2680 which
describes his needs, abilities and limitations. Based
on the evidence the VA has determined in a rating
board decision that the veteran is in need of the aid
& attendance of another person in his home.
What evidence does the VA need?
VA must have complete application, VA Form 21-526,
with household income, net worth and medical expense
data.
Income:
month
Vet Social Security
$1,199.90
Vet retirement
615.00
Spouse Social Security 879.90
Spouse retirement
443.00
Interest on investment
150.00
Total household income
annual
$14,398.80
7,380.00
10,558.80
5,316.00
1,800.00
$39,453.60
Problem??
Maximum income limit for veteran in need of
A&A with one dependent??
$24,239 annually
Vet’s household income is $39,453.60
Vet is $15,214.60 over income for pension.
Now what do we do?
Vet and his wife have medical expenses:
monthly
annual
Vet Medicaid premium
$ 99.90
$1,198.80
Wife Medicaid premium
99.90
1,198.80
Supplemental insurance policy premium
210.00
2,520.00
Vet prescriptions copays
310.00
3,720.00
Wife prescriptions copays
42.50
510.00
MD visit co-pays
50.00
600.00
Vet diapers
144.00
1,728.00
Non prescription med needs 32.00
384.00
Nursing Aid (12x6x30)
2,160.00
25,920.00
Total
$ 37,779.60
Remember our formula?
Reportable medical expenses – deductible =
allowable medical expenses.
Reported income – allowable medical expenses
= income for VA purposes (IVAP)
Maximum benefit – IVAP = annual payable
benefit
Annual payable benefit / 12 = monthly benefit
Reportable medical expenses
Deductable (vet w/one dep)
Allowable medical expenses
$37,779
802
36,977
Reported Household Income
Allowable Medical Expenses
Income for VA Purposes
39,453
36,977
2,476
Max VA benefit (vet A&A w/one dep)
IVAP
Annual Payable Benefit
24,239
2,476
21,763
Monthly Benefit to veteran
$1,813
Claimants requiring nursing care but not in
a licensed nursing home must be able to
document the services provided and the cost
of those services. Nursing (medical) services
must be separated from housekeeping
services or room & board such as in an
Assisted Living or Adult Foster Care facility.
Depending on demonstrated need VA may
allow all or partial of paid expenses.
Certification that a claimant is receiving
nursing services as a patient in a state
licensed nursing home will be accepted as
evidence of the need for aid & attendance.
In such cases the full cost of nursing home
care will be accepted as medical expense for
pension purposes
Another Case of Veteran with spouse.
Vet living in Assisted Living Facility. Requires medical
determination that veteran requires A&A which has been
granted.
Income:
Vet Social Security
Vet retirement
Spouse Social Security
Spouse retirement
Interest on investment
Total household income
month
$1,199.90
615.00
879.90
443.00
150.00
annual
$14,398.80
7,380.00
10,558.80
5,316.00
1,800.00
$39,453.60
Vet and his wife have medical expenses:
monthly
Vet Medicaid premium
$ 99.90
Wife Medicaid premium
99.90
Supplemental insurance policy premium
210.00
Vet prescriptions copays
310.00
Wife prescriptions copays
42.50
MD visit co-pays
50.00
Vet diapers
144.00
Non prescription needs
32.00
Assisted Living charges (30x$125) 3,750.00
Total Medical Expenses:
annual
$1,198.80
1,198.80
2,520.00
3,720.00
510.00
600.00
1,728.00
384.00
45,000.00
$56,859.00
Reportable medical expenses
Deductible (vet w/one dep)
Allowable medical expenses
$56,859
802
56,057
Reported Household Income
Allowable Medical Expenses
Income for VA Purposes
39,453
56,057
-0-
Max VA benefit (vet A&A w/one dep)
IVAP
Annual Payable Benefit
24,239
-024,239
Monthly Benefit
$2,019
Single Claimant
(veteran or surviving spouse)
The process above is the same using the
appropriate income limits in the
calculations
Annually, the first of each year, the VA solicits
an income and medical expense report from the
veteran (claimant).
Based on this information the VA will make a
retroactive adjustment on past pension
entitlement and either pay a retroactive benefit
or create an overpayment.
The VA will also make an annual decision of
continued pension entitlement based on any
changes which may have occurred.
MEDICAID and VA Pension
Maximum benefit payable to either
veteran with no dependents on pension
or surviving spouse on death pension
with no dependents in a MEDICAID
nursing care bed is $90.00 monthly.
Questions?