The Veterans’ Administration offers a “pension” for certain service men and women who pass a means test and medical qualification. The VA describes the program as follows:
“Pension is a benefit paid to wartime veterans who have limited or no income, and who are age 65 or older, or, if under 65, who are permanently and totally disabled. Veterans who are more seriously disabled may qualify for Aid and Attendance or Housebound benefits. These are benefits that are paid in addition to the basic pension rate.”
To qualify, the veteran does not have to have retired from the service and does not have to have a service-related disability. Instead, active service during designated times of war and a general or honorable discharge meets the service qualifications. Additionally, the VA will only approve a pension application if the veteran’s income and assets meet the eligibility requirements and the veteran meets certain disability requirements.
Many qualified veterans miss out on the pension benefits they have earned because they are never informed that income has a very different meaning for veteran pension purposes than it does in common usage. A veteran could have annual income of $100,000 or more, retain all of that income and still qualify for a tax free pension of over $2,000 per month as of 2012.
The pension benefit is a reimbursement for medical expenses and is, therefore, not taxable income to the veteran.