VA Pension: Financial Requirement (Income and Assets)

VA Pension:  Financial Requirement (Income and Assets)

VA Pension:  Financial Requirement (Income and Assets)We have discussed the first two requirements for the VA Pension:  the military requirement of the veteran and the health or disability of veteran or surviving spouse.

Now we turn our attention to what can be the most confusing and challenging area — the area where families are often misled.

This is the financial requirement.

There’s probably more confusion over this than any other one.

We see a lot of scams that are out there.

We see a lot of bad advice being given to veterans and to their families about what they should do with assets or income.

There’s a whole host of problems that can result from that. Let’s look at this.

There are two aspects:

  • Assets (household)
  • Income (household but is “IVAP” – – see below)

The first is the asset test.

We look at the veteran and, if the veteran is married, we look at the veteran’s spouse.

We say, “What is the total amount of assets you have?”

The VA does not care about “Well, it’s in my name,” or “It’s in her name,” or “We have a prenuptial.”

None of that matters.

If there are dependent children of the veteran – that could be a young child or it could be maybe a disabled child that is still considered a dependent – then we would include the assets of that dependent.

We look at the entire household and ask, “What are the total assets?”

For assets, let me tell you what the assets do not include.

When we were looking at this requirement, it does not include – and there are some exceptions, but unless we’re talking about million dollar houses – it does not include your house.

If you have a $100,000 house paid for or a $500,000 house paid for, the VA does not count that as an asset.

It’s the same thing with the car.

If we’re just talking about a normal car, a normal van, or a normal truck, the VA does not count that as an asset.

What is counted or what does the VA include?

Here are the big three:

  • Property
  • Money
  • Investments

If you have a house that you have 100 acres with, the VA will give you a certain amount of the land to go with your house, a reasonable amount, that is not included.

But the VA considers the rest of the land to be a countable asset.

Maybe you have investment properties, maybe you have a condo at the beach, maybe you have a condo in the mountains.

Whatever it may be, the VA is going to consider that and look at the fair market value and then subtract out any debt that you owe.

In other words, if you have $200,000 cabin in Gatlinburg but you owe $190,000, that’s going to count as basically $10,000.

They also look at money.

That makes sense.

How much is in your checking account?

How much is in savings account?

Do you have CDs?

Investments could be investment property, stocks, mutual funds, bonds, retirement accounts (401(k), IRAs), etc.

The VA is looking for all of the household assets other than the home and other than the car.

Then there are a few other minor things.

But this will cover the vast majority of what is counted

What we’re looking at with assets is, for a married couple – not counting the house, not counting the car – we’re generally looking at keeping those assets to about $40,000 or under.

For a single veteran or a surviving spouse or widow, we’re looking at $20,000.

If we have more than that, there are some options. We’re going to get to those in a minute.

Second aspect is the income test.

What is the total income of the household?

“IVAP.” If you know anything about the VA, you know the VA loves acronyms.

They love to have all these initials.

This is one of those.

This stands for Income for VA Purposes.

Just like with your taxes, you don’t pay taxes on your gross income.

Instead, you get to take deductions.

You say, “I had this mortgage interest, this charitable contribution, these medical expenses.”

Then you get down to your taxable income.

It’s the same concept here.

Let’s drill down into both of these and get a little bit more into the details.

So now let’s look at the income.

I almost hesitate to do this because it starts to remind us of an equation and most of us who are teachers don’t particularly want to see equations after going through high school.

We’re looking at income for VA purposes (IVAP).

We take that gross household income – any kind of income.

It could be retirement, it could be rental income, Social Security, pension, whatever it is, income coming in for the household.

But then we subtract out for the household unreimbursed medical expenses.

It could be the veteran. It could be the veteran’s spouse or the dependent child.

Remember, it’s like taxes. We don’t pay taxes on the full amount of our income. It’s only the taxable amount of our income.

So:  IVAP = Gross Income – Unreimbursed Medical Expenses

Let me give you examples of this.

Almost everybody on Social Security is paying for Medicare.

That’s normally about $100 a month.

You take your gross Social Security check and subtract out the $100 for Medicare.

We may have other health insurance.

Subtract that out.

You may have something where you know every month we’re going to buy $100 worth of bandages because you have some wound care issues.

That would be unreimbursed.

If you have sitters that come and sit with your parents and you pay them $1,000 a month, if your parents need that, then that will normally be considered unreimbursed medical expenses.

What to do next

If you have questions about this benefit then we encourage you to investigate it.

You can do so through this website (see links below) or you can call us at 205-879-2447 to set up a scheduled call/meeting or to receive our free book entitled:

How to Avoid Being Forced into a Nursing Home: Discover 5 Simple Steps to Using a Little Known VA Benefit (VA Pension or Aid and Attendance) to Stay in Your Home and Stay Out of a Nursing Home


Additional Resources Related To VA Pension:

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