Part 05, Subpart 03, Chapter 01 - Income and Net Worth



Chapter 1. The Effect of Income and Net Worth on Pension and Parents’ Dependency and Indemnity Compensation (DIC)

Table of Contents

Section A: General Information on the Effect Income and Net Worth Have

on Pension and Parents’ DIC

Overview 1-A-1

1. General Information on Pension and Parents’ DIC Programs 1-A-2

2. General Information on Concurrent Income and Net Worth Development

in DIC and Death Compensation Claims 1-A-9

3. Income Reporting for Pension and Parents’ DIC 1-A-12

4. Action to Take When Income for VA Purposes (IVAP) Is Uncertain 1-A-14

5. Denying a Claim Because Income Exceeds the Maximum Annual Pension

Rate (MAPR) or Income Limit and Time Limits for Submitting Amended Income Information 1-A-17

6. Pension and Parent’s DIC Award Effective Dates and Payment Dates 1-A-28

7. General Information on Payment Period Commencement Under 38 CFR 3.31 1-A-29

8. Specific Exclusions to Payment Period Commencement Under 38 CFR 3.31 1-A-38

Section B: Social Security Administration (SSA) Benefits Program

Overview 1-B-1

9. Overview of the SSA Benefits Program 1-B-2

10. Medicare 1-B-7

11. Computing Monthly SSA and Medicare Benefits 1-B-10

12. Sources for Accessing Social Security (SS) Information 1-B-15

13. Terminated Disability SS and Withdrawn SS Applications 1-B-17

Section C: Section 306 Pension and Old Law Pension

Overview 1-C-1

14. Determination of Countable Income for Section 306 or Old Law Pension 1-C-2

15. Counting the Income of a Spouse for Section 306 or Old Law Pension 1-C-9

16. Deductible Expenses 1-C-16

17. Adjustments Based on Changes in Income 1-C-22

18. Changes in Marital and Dependency Status 1-C-30

19. Handling Another Beneficiary’s Award When a Surviving Spouse’s or

Child’s Award Is Terminated 1-C-39

20. Sale or Transfer of Real Estate or Personal Property 1-C-41

Continued on next page

Table of Contents, Continued

Section D: Parents’ DIC

Overview 1-D-1

21. Original and Reopened Awards 1-D-2

22. Deductible Expenses 1-D-9

23. Proportionate Calculation of Income for Veterans Affairs Purposes (IVAP) 1-D-16

24. Adjustments Based on Changes in Income 1-D-20

25. Waiver of Retirement Income 1-D-26

26. Changes in the Marital or Dependency Status of Parents 1-D-32

27. Sale or Transfer of Real Estate or Personal Property 1-D-38

Section E: Improved Pension – Basic Rate Determinations

Overview 1-E-1

28. Determining the Monthly Rate of Payment 1-E-2

29. Determining the Maximum Annual Pension Rate (MAPR) 1-E-6

30. Veterans Who Are Married to Each Other 1-E-8

31. Surviving Child Entitled to Improved Death Pension in His/Her Own Right 1-E-10

32. Income Classifications 1-E-16

33. Counting Income for Department of Veterans Affairs Purposes (IVAP) 1-E-19

34. Counting Income During the Initial Period 1-E-30

35. Award Notice to Claimant 1-E-39

36. Using Special Law (SL) Codes 14 and 18 1-E-41

Section F: Improved Pension – Dependents

Overview 1-F-1

37. Establishing Dependents for Improved Pension Purposes 1-F-2

38. Counting the Income of Dependents 1-F-7

39. Removing Dependents From Improved Pension Awards 1-F-20

40. Removing the Income of Dependents 1-F-25

Continued on next page

Table of Contents, Continued

Section G: Improved Pension – Deductible Expenses

Overview 1-G-1

41. Overview of Deductible Expenses 1-G-2

42. Medical Expense Deductions 1-G-4

43. Sources of Medical Expenses 1-G-8

44. Processing Medical Expense Deductions 1-G-17

45. Verifying Medical Expenses 1-G-32

46. Final Expense Deductions – Overview and Definitions 1-G-43

47. Processing Final Expense Deductions 1-G-46

48. Educational Expense Deductions 1-G-56

49. Child’s Income Deductions 1-G-58

50. Hardship Deduction From a Child’s Income 1-G-60

51. Specific Deductions for Gross Business Income and Permanent and Total (PT)

Disability or Death Expenses 1-G-72

Section H: Improved Pension – Adjustments Based on Changes in Status

Overview 1-H-1

52. Adjustments Based on Changes in Income 1-H-2

53. Cost-of-Living Adjustments (COLAs) 1-H-9

54. Adjustments for the Loss of Disability SS 1-H-16

55. Effect of Terminated Death Pension Awards on Other Beneficiaries 1-H-18

Section I: Improved Pension – Counting Specific Types of Income

Overview 1-I-1

56. Income Inclusions 1-I-2

57. Income Inclusions From Government Programs 1-I-6

58. Income Exclusions 1-I-9

59. Living/Home Income Exclusions 1-I-15

60. Disaster Income Exclusions 1-I-17

61. Death and Disability Income Exclusions 1-I-18

62. Income From Mortgage or Contract for Deed 1-I-20

63. Indian Income 1-I-22

64. Income From the Sale of Property 1-I-26

65. Asset Transfers and Life Estates: Effect on Net Worth and Income 1-I-29

66. Exhibits 1 and 2: Payments Excluded by Federal Statutes in Calculating Income

and/or Net Worth 1-I-32

Continued on next page

Table of Contents, Continued

Section J: Net Worth

Overview 1-J-1

67. General Information on Net Worth 1-J-2

68. Adjusting Improved Pension Awards Based on Changes in Net Worth 1-J-6

69. Adjusting Section 306 Pension Awards Based on Changes in Net Worth 1-J-10

70. Denial Due to Excessive Net Worth 1-J-12

71. Developing the Value of Real Estate 1-J-17

72. Exhibit 1: Life Expectancy Table for Net Worth Determinations 1-J-20

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