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expenses from any countable income.
a) This computation may result in an increase in a pension payment or in an extra payment.
1) An increase or extra payment resulting from this computation is not income.
5. Assume that a VA pension is partially or entirely needs-based unless there is evidence to the contrary. As such, these payments are unearned income and the $50/$20 general income exclusion is not applied.
a) The exceptions to IBON designation are:
1) VA Aid and Attendance and Housebound Allowances are not income. All or part of a VA pension may be subject to this rule.
2) VA payments resulting from unusual medical expenses are not income. All or part of a VA pension payment may be subject to this rule.
3) Pensions paid to veterans and their dependents on the basis of a Medal of Honor or special act of Congress, are not needs-based. These pensions are unearned income and the $50/$20 general exclusion does apply.
6. The Veterans and Survivors Pension Improvement Act (VA Improved Pension), signed into law October 1978 and effective January 1979, changed the method of determining the pension payable. The new rates of payment are not automatic; therefore, the veteran or survivor must file an application with VA to establish entitlement under the improved pension. Recipients who receive benefits under the old VA law must file for the improved pension as a factor of eligibility under the Utilization of Other Benefits provision.
Source: Social Security Act §1902 (r)(2); 42 CFR § 435.601(b) (Rev 1994).
Rule 7.13: VA Compensation Payments.
A. Compensation payments are based on service-connected disability or death and may be based on need.
B. The following are types of compensation payments and their treatment:
1. Death Compensation and Dependency and Indemnity Compensation (DIC) payments to a surviving parent of a veteran are counted an unearned income. Since these payments are determined by the parent’s income, they are income based on need and the general income exclusion does not apply.
2. Compensation payments resulting from unusual medical expenses, aid and attendance