The hills are alive with Pension knowledge…
The Sound of Music reminds us that starting at the very beginning is a very good place to start.
VA Pension is designed to help low-income Veterans and their spouses who meet certain income and net worth criteria. It is not an entitlement program for the purpose of protecting an estate. There are five key terms that potential claimants and beginners to the Pension process need to be familiar with from the start.
1. MAPR – acronym for Maximum Annual Pension Rate, pronounced “may-per.” This is the number that your adjusted annual income cannot exceed in order to qualify for Pension benefits. This is a hard-capped, yes or no decision. There are several MAPRs depending on:
A. Status: Are you a Veteran, Spouse, or Child? B. Dependency: Is there a spouse and/or dependent/helpless children in the household? C. Condition: Eligibility for Special Monthly Pension based on medical need, whether the claimant is qualified for the Housebound or Aid & Attendance payment rates. There is also a carve-out for two Veterans married to each other.
Special Monthly Pension will get its own post, as it is an enhancement to regular Veterans or Death Pension.
The MAPR is considered a minimum standard of living. Pension benefits fill the gap between where you are and where you should be. Calling this benefit “Pension” is in and of itself somewhat misleading; it is more accurately a welfare-style program solely because it features a financial means test.
2. IVAP – acronym for Income for VA Purposes, pronounced “eye-vap.” Anyone that has filed a tax return knows about the ungodly amount of deductions and loopholes available to lower your countable income. The Pension program takes your actual annual income and subtracts medical expenses after a 5% of MAPR deduction. Don’t worry; here’s a chart. Whatever your applicable MAPR is, 5% of that number – not the medical expenses themselves – is subtracted from the total medical expenses claimed. If your expenses are larger than your income, your IVAP would be zero. There is no such thing as a negative IVAP.
3. Date of Claim – This is the date that the VA receives your claim, whether it is a new claim or an update to an existing award. Every action taken is considered a claim.
4. Effective Date – The following first of the month after your date of claim. If your paperwork is received May 15, your effective date is June 1. Pension benefits are monthly in nature. Effective dates can be changed in your favor before you file an application for benefits by submitting a VA Form 21-0966, called an Intent to File. This form will get its own post soon.
5. Payment Date – The next first of the month after the Effective Date. If the effective date is June 1, the payment date is July 1. VA benefits pay one month behind; the check on the first of any given month is really the payment for the prior month. This leads to (temporary) non-entitlement of the next check after a claimant’s death – we’ll get more into that in another post.
Hopefully this helps to address some commonly used terms that can sometimes be less than straightforward in practice.
Thanks for reading, and stay tuned for the next post – in which TPG tackles the simplification of VA Pension math. Ever wonder how the VA arrives at a payment amount? Wonder no more.
Until next time,
TPG
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