In This Section |
This section contains the following topics:
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1. Changes in Income and Time Limits
Introduction |
This topic contains information on adjustments based on changes in income, including
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Change Date |
April 28, 2023 |
IX.iii.1.H.1.a. Counting Income |
Income counting procedures, such as time limits to submit a claim for an increased rate, may vary based on the specific type of award adjustment such as
References: For more information on
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IX.iii.1.H.1.b. Time Limit to Furnish Amended Income Information to Increase Rate |
38 CFR 3.660(b)(1) provides the time limit for submitting new evidence to get a higher rate for a particular income year.
For an original award or a new award after a period of non-entitlement, the “income year” is the initial year. (Therefore, a claimant can have more than one “initial year.”) Otherwise, the income year is the applicable calendar year.
In situations where pension was paid at a lower rate based on anticipated income, pension may be increased in accordance with the facts found if satisfactory evidence of entitlement is received within the same or next calendar year. |
IX.iii.1.H.1.c. Definition: Same Calendar Year Under 38 CFR 3.660(b)(1) |
The same calendar year under 38 CFR 3.660(b)(1) is the year in which the applicable calendar year or initial period ends.
Therefore, a claimant has the entire calendar year that follows the applicable calendar year (or that follows the year that the initial year ends) to submit satisfactory evidence of entitlement for the calendar year in question.
The table below describes the time limit for the claimant to submit satisfactory evidence of entitlement for the same calendar year.
Note: Evidence adequate to support award action must be date stamped into VA by the critical date, or by the next workday, if the time limit expires on a Saturday, Sunday, or legal holiday.
References: For more information on
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IX.iii.1.H.1.d. Example 1: Time Limit to Furnish Amended Income Information to Increase Rate |
Situation: A Veteran’s initial year is July 12, 2021, through July 31, 2022. The “same calendar year” refers to 2022, the calendar year during which the initial year ends.
Result: The Veteran has up to and including December 31, 2023, to submit income information (such as unreimbursed medical expenses) to reduce income for the period July 12, 2021, through July 31, 2022.
Note: A Veteran under the age of 65 who was not rated permanently and totally (P&T) disabled because income for VA purposes (IVAP) exceeded the maximum annual pension rate (MAPR) may be rated P&T from the original date of claim (unless the medical evidence precludes such a rating), if the Veteran submits income information within the 38 CFR 3.660(b) time limits and IVAP (and net worth) permits payment. |
IX.iii.1.H.1.f. Time Limit to Submit Amended Income Information to Reduce an Overpayment |
Under 38 CFR 3.652(b), there is no time limit to submit evidence of continued entitlement, such as income evidence, for the purpose of reducing an overpayment.
However, the evidence submitted must relate to the period during which the overpayment was created, per 38 CFR 3.660(b).
Example:
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IX.iii.1.H.1.g. Time Limit to Submit Amended Income Information When a Pension Award Is Discontinued Because IVAP Exceeds the MAPR |
When a pension award is discontinued because IVAP exceeds the MAPR, 38 CFR 3.660(b) determines the time limit to submit new income information.
Note: The time limits provided by 38 CFR 3.660(b) cannot be extended because of a delay in notifying the beneficiary of the discontinuance. |
IX.iii.1.H.1.h. Continuing Entitlement Established |
A pensioner has up to and including the last day of the calendar year that follows the end of the initial year or calendar year period to establish continuing entitlement for the income counting period during which the discontinuance occurred.
Situation:
Result: The Veteran has through the end of 2023 to submit evidence of continuing entitlement (for example, deductible expenses) from September 1, 2022.
Reference: For more information on payment of pension after nonrecurring income terminates benefits, see M21-1, Part IX, Subpart iii, 1.E.6.d. |
IX.iii.1.H.1.i. Payment of Pension After a Break in the Entitlement |
The time limit to submit evidence establishing entitlement after a break in entitlement is determined by 38 CFR 3.660(b)(2). That is, the claimant has two years from the date of discontinuance to submit evidence establishing entitlement from 12 months after the date of discontinuance.
If the claimant re-establishes entitlement from a date that is 12 months from the date of discontinuance, 38 CFR 3.31 applies in determining the proper payment date. |
2. Recurring Income Increases and Running Awards
Introduction |
This topic contains general information on adjustments to running pension awards, including
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Change Date |
September 19, 2022 |
IX.iii.1.H.2.a. Actions to Take When Incomplete Recurring Income Information is Received From a Beneficiary That May Reduce VA Pension |
When a beneficiary submits income information that is incomplete or questionable, claims processors are encouraged to attempt to resolve the issue by contacting the beneficiary by telephone. If the missing information is received via telephone adjust the award, and send a decision notice. Follow the guidance in
Use the table below to determine the actions to take if the information could not be obtained via telephone and the new income may reduce VA benefits.
Reference: For information on
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IX.iii.1.H.2.b. Example: Unknown Date of Income Increase – No Response |
Situation:
Outcome:
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IX.iii.1.H.2.c. Example: Unknown Date or Amount of Income Increase – No Response |
Situation:
Outcome:
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3. COLAs
Introduction |
This topic contains information on COLAs, including
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Change Date |
June 1, 2023 |
IX.iii.1.H.3.c. Normal Impact of Social Security COLA on the Current-Law Pension Rate |
Normally, a Social Security COLA adjustment will not reduce the rate of current-law pension because the current-law pension MAPR always increases at the same time and by the same percentage as the rate of Social Security, per 38 CFR 3.27.
If the Social Security COLA does not reduce the rate of current-law pension, count the increased rate of Social Security from the effective date of the COLA (generally December 1). This is an exception to the general end-of-the-month rule that increased income is counted from the first day of the month after the month during which it is received.
Example: A Veteran is receiving current-law pension based on Social Security of $5,000 per year. Effective December 1, 2022, the rate of Social Security goes up to $5,435 as a result of the COLA. Pay benefits based on IVAP of $5,435 from December 1, 2022. |
IX.iii.1.H.3.d. Reduction in Rate of Current-Law Pension Due to Social Security’s COLA |
If deductible expenses are a factor, a beneficiary’s rate of current-law pension may decrease as the result of a Social Security COLA. This happens most often when a beneficiary’s annual rate of Social Security approaches or exceeds the applicable MAPR.
If a Social Security COLA adjustment results in a decrease in the rate of current-law pension, decrease the pension rate effective the first of the month after the effective date of the COLA/MAPR increase.
However, if deductible expenses for the calendar year associated with the COLA are projected to increase, then carry forward the previous year’s pension payment rate until February 1.
Notes:
Exception: Certain, limited circumstances require using the adjustment reason, Add to Gross Rate in VBMS-Awards, in order to pay the correct rate of pension and protect the COLA, such as when there is a child’s hardship exclusion included.
Reference: For more information on adjusting an award to reflect a COLA, see
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IX.iii.1.H.3.e. Report of Death and Due Process |
Use the table below to determine what actions to take when an EP 130 is established based on death of beneficiary, and an EP 600 (such as a COLA adjustment) is pending.
Reference: For more information on override commands in VBMS-Awards, see the VBMS Awards User Guide. |
IX.iii.1.H.3.f. Example: Adjusting the Rate of Current-Law Pension When Calendar-Year Medical Expenses Are Projected to Remain Constant |
Situation:
Result: Continue to pay at the rate of $432 per month through December 31, 2022, and furnish notice of a proposed reduction to $414 from January 1, 2023. |
IX.iii.1.H.3.g. Example: Adjusting the Rate of Current-Law Pension When Calendar-Year Medical Expenses Are Projected to Increase |
Situation:
Result: Adjust the award to pay at the rate of $432 per month through January 31, 2023, and $478 from February 1, 2023 (38 CFR 3.31). |
IX.iii.1.H.3.h. Reduction in Rate of Current-Law Pension Due to Other Benefit Program’s COLA |
If a VA beneficiary receives additional income because of a COLA in a benefit program other than Social Security, then the general rule for counting recurring income applies. Count the additional income from the first of the month after the month during which it is received.
Reference: For more information on counting recurring income, see M21-1, Part IX, Subpart iii, 1.E.6.e. |
IX.iii.1.H.3.i. Original, New, or Suspended Awards |
If the Social Security or other benefit program COLA occurs before an original or new award is processed or when an award is in suspense, no notice of proposed adverse action for a reduction is required. |
IX.iii.1.H.3.j. Example: Original, New, or Suspended Awards |
Situation:
Result: Adjust the award to pay at the rate of $432 per month through December 31, 2022, and $414 from January 1, 2023. |
IX.iii.1.H.3.k. Retroactive Increases |
Apply the principles in this topic even if the beneficiary subsequently establishes entitlement to a retroactive increase because of a reduction in countable income. |
IX.iii.1.H.3.l. Example 1: Retroactive Increases |
Situation:
Result: Adjust the award to pay at the rate of $442 per month from June 1, 2022 through December 31, 2022, and $424 from January 1, 2023. |
IX.iii.1.H.3.m. Example 2: Retroactive Increases |
Situation:
Result: Adjust the award to pay
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4. Adjustments for the Loss of Disability Social Security
Introduction |
This topic contains information on adjustments for the loss of disability Social Security, including
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Change Date |
July 7, 2022 |
IX.iii.1.H.4.a. Beneficiary’s Right to Social Security Benefits During Appeal |
If the Social Security Administration (SSA) determines that a beneficiary receiving disability benefits is no longer disabled, the beneficiary may appeal the determination and may elect to have Social Security benefits continue during the SSA appeal process.
This election is made on the condition that Social Security payments issued after the initial Social Security termination date will have to be repaid if the SSA’s decision is upheld on appeal. |
IX.iii.1.H.4.b. Social Security Rate During Appeal |
The beneficiary may not elect to receive a reduced rate of Social Security disability benefits during the appeal, but may elect to have the basic benefit continue while payments for eligible dependents in the household are stopped.
Alternatively, the beneficiary may elect to have the basic benefit terminated and have payments for one or more dependents in the household continue.
The beneficiary’s election does not control a dependent outside the household whose payments are contingent on the beneficiary’s entitlement. Such a dependent, however, is given the right to elect to have benefits continue during the appeal by accepting responsibility for the overpayment if the appeal is unsuccessful.
A Social Security beneficiary who is 62 years old or older may elect to receive Social Security retirement benefits in lieu of disability benefits while the appeal of the disability determination is pending. |
IX.iii.1.H.4.c. Report of Terminated Disability Social Security Received |
If a pension (or Parents’ DIC) beneficiary reports that disability Social Security benefits have been terminated, do not increase VA pension benefits unless there is a statement from the beneficiary on file to the effect that the beneficiary and any dependents
Note: If the beneficiary has elected to receive benefits for certain dependents, the statement must specify the dependents for which payments will continue. |
IX.iii.1.H.4.d. Determining Whether Development for P&T Is Needed |
If SSA determines that a Veteran is no longer eligible for Social Security disability benefits, and the Veteran is under age 65, determine if additional development is necessary to ascertain whether the Veteran continues to have a P&T disability for pension purposes. If development for P&T disability is necessary, control the issue under EP 310.
Note: Request medical records from SSA while developing for records from other sources.
Reference: For more information on determining if development for P&T is necessary, see M21-1, Part IX, Subpart ii, 2.A.1. |
IX.iii.1.H.4.e. EP Control for Income Development |
If development for income information is required, control the issue under EP 150 until such time as
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5. Effect of Discontinued Survivors Pension Award on Other Beneficiaries
Introduction |
This topic contains information on the effect of a discontinued Survivors Pension award on other beneficiaries, including
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Change Date |
July 7, 2022 |
IX.iii.1.H.5.a. Entitlement of In-Custody Children |
If the surviving spouse’s entitlement to pension ceases because IVAP exceeds the MAPR, or net worth is shown to bar pension entitlement, the entitlement of all children in the surviving spouse’s legal custody for current-law pension purposes also ceases. The children can become entitled in their own right only if
Reference: For more information on determining the legal custody of a child for current-law pension purposes, see
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IX.iii.1.H.5.b. Entitlement of Out-of-Custody Children |
The discontinuance of an award to a surviving spouse has no impact on any award being made to children who are not in the surviving spouse’s legal custody for current-law pension purposes. |
IX.iii.1.H.5.c. Remarriage of the Surviving Spouse |
If a surviving spouse remarries, current-law pension eligibility is lost as described in 38 CFR 3.500(n)(1). A remarried surviving spouse whose subsequent marriage is annulled or declared void can reestablish eligibility as a surviving spouse.
If it appears that a child may be entitled to pension in their own right, initiate development to determine the income of the child, parent and stepparent or other custodian of the child with whom the child resides.
Reference: For more information on reestablishing eligibility to benefits, see 38 CFR 3.55.
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IX.iii.1.H.5.d. Discontinuance of a Child’s Award |
If there is no surviving spouse, or if a child is out of the surviving spouse’s legal custody for current-law pension purposes, the child’s entitlement is completely independent of any benefits paid to any other beneficiary.
The adjustment or discontinuance of such an award has no impact on any other beneficiaries, unless the other beneficiaries are receiving Section 306 Pension or Old-Law Pension.
Reference: For more information on handling another beneficiary’s Section 306 Pension or Old-Law Pension award when a surviving spouse’s or child’s Section 306 Pension or Old-Law Pension award is discontinued, see M21-1, Part IX, Subpart iii, 1.C.6.
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