Order Code RS22804
February 6, 2008
Veterans’ Benefits: Pension Benefit Programs
Carol D. Davis
Knowledge Services Group
Christine Scott
Domestic Social Policy Division
Summary
The Department of Veterans Affairs (VA) administers several pension benefit
programs for veterans as well as their surviving spouses and dependent children. The
most current pension programs available (for those meeting the eligibility criteria on or
after January 1, 1979) are the Improved Disability Pension for certain low-income
veterans and the Improved Death Pension for certain low-income surviving spouses or
children of veterans. There is also a special pension for Medal of Honor recipients.
This report describes these programs, including the eligibility criteria and current benefit
levels. This report will be updated as needed to reflect legislative activity and changes
to benefits or eligibility requirements.
Overview
The Department of Veterans Affairs (VA) administers several pension programs for
veterans and their surviving spouses and dependent children. There are two types of
pension programs administered by the VA: (1) pension programs for veterans of specific
periods of war; and (2) pension programs for certain low-income veterans. The pension
programs for specific periods of war are for periods before World War I. They include
pension programs for veterans, as well as their surviving spouses and dependent children,
of certain periods of war such as the Civil War, the Indian Wars, and the Spanish-
American War. The pension programs for certain low-income veterans include the Old
Law Disability Pension, the Section 306 Disability Pension, and the Improved Disability
Pension. The VA pension programs for certain low-income surviving spouses and
dependent children of veterans include the Old Law Death Pension, the Section 306 Death
Pension, and the Improved Death Pension.
In addition to the pension programs related to periods of service for certain low-
income veterans and surviving spouses and dependent children, the VA administers a
special pension program for Medal of Honor recipients.

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This report will provide information on the most current pension programs — those
programs for which a veteran, a surviving spouse, or a dependent child becomes eligible
on or after January 1, 1979 — and on the special pension program for Medal of Honor
recipients. The current pension program for veterans is the Improved Disability Pension,
which is for certain low-income veterans. The current pension program for certain low-
income surviving spouses and dependent children of veterans is the Improved Death
Pension. Both pension programs were created by P.L. 95-588, the Veterans and Survivors
Pension Improvement Act of 1978.
The Improved Disability Pension Benefit
The Improved Disability Pension provides a monthly benefit to certain low-income
veterans. The monthly benefit is based on a maximum annual benefit, and the actual
benefit received by the veteran reflects a reduction (from the maximum amount) of the
veteran’s “countable” income. This means that a veteran with countable income above
the maximum benefit amount is not eligible for the pension.
Maximum Annual Benefit Amount. The maximum annual benefit amounts for
the veterans’ pension benefit are set in statute1 and are based on the presence of a spouse
or dependent child (or children) and the need for aid and attendance.2 The annual benefit
amounts are adjusted automatically by law3 each year to reflect a cost-of-living adjustment
(COLA) equal to the COLA for Social Security benefits. For example, beginning
December 1, 2007, the maximum annual amount for the pension benefit is $11,181 for
a veteran and $14,643 for a veteran with one dependent.4 If two veterans are married to
each other, the maximum annual amount is $14,643, the same as for a veteran with one
dependent. The maximum annual benefit amount will be higher if the veteran is
housebound or requires aid and attendance.5
Eligibility Criteria. To be eligible for the pension benefit, a veteran must meet
eligibility criteria related to combat/period of service; income/net worth; and age or
disability.
Combat/Period of Service. A veteran must meet military service requirements
related to combat, or service during a period of war.6 Specifically, a veteran must have
been discharged from military service under conditions other than dishonorable and must
have served in the active military:
1 38 U.S.C. §1521(b)-§1521(g).
2 Aid and attendance is provided when a veteran needs another person’s help to perform activities
of daily living, such as eating, dressing, or taking a shower.
3 38 U.S.C. §5312.
4 These figures reflect the cost-of-living adjustment (COLA) for Social Security benefits
beginning January 2008. For more information on the Social Security COLA, see CRS Report
94-803, Social Security: The Cost-of-Living Adjustment in January 2008, by Gary Sidor.
5 For more information on current rates, please see the Department of Veterans Affairs Website
at [http://www.vba.va.gov/bln/21/Rates/pen01.htm].
6 38 U.S.C. §1521(j).

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! for at least 90 days during a period of war;7
! during a period of war and was released from service for a service-
connected disability;
! for 90 or more consecutive days which began or ended during a period
of war; or
! for a total of 90 days or more in two or more separate periods of service
during one or more periods of war.
Income/Net Worth. As noted previously, the pension benefit for a veteran who
meets the other eligibility requirements (combat/period of service and disability/age) is
calculated by subtracting the veteran’s annual countable income from the statutory annual
maximum benefit. This means that a veteran with annual countable income above the
annual maximum benefit amount will receive no pension benefit. A veteran with annual
countable income below the annual maximum benefit amount will have his or her benefit
reduced dollar for dollar by the amount of annual countable income. In addition, a
veteran may not have a net worth, or estate, large enough that it would be reasonable for
part of the estate to be used for the veteran’s maintenance.8
Annual countable income includes income from nearly all sources. However, there
are several specific sources of income that are not included in determining annual
countable income:9
! donations from public welfare or private relief organizations;
! pension benefits administered by the VA;
! expenses paid by a veteran’s spouse (or the veteran’s surviving
spouse or child) for the veteran’s last illness, burial, or debts;
! amounts paid by the veteran for the last illness and burial of the
veteran’s spouse or child;
! amounts paid by a veteran’s spouse for the last illness and burial
of the veteran’s child;
! insurance reimbursement for property casualty loss (up to the
greater of fair market value or replacement value);
! profit from disposing of personal or real property (other than in the
course of business);
! amounts in joint accounts the veteran acquires by the death of the
other owner(s);
! amounts paid by the veteran, spouse, or child for unreimbursed
medical expenses (limited to a maximum of 5% of the pension
benefit); and
! amounts paid by a veteran or surviving spouse to pursue education,
vocational rehabilitation, or training, including tuition, fees, books,
and, if the veteran or surviving spouse needs aid and attendance,
7 For information on periods of war, see CRS Report RS21405, Periods of War, by Barbara
Salazar Torreon.
8 38 U.S.C. §1522.
9 38 U.S.C. §1503.

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travel expenses above reasonable expenses for a nondisabled
person.
Disability/Age. To be eligible for the pension benefit, the veteran must be totally
disabled10 due to non-service connected injuries or illnesses that are not a result of the
veteran’s willful misconduct.11 However, to determine if a veteran is totally disabled, the
Secretary of Veterans Affairs may combine the disability ratings for service-connected
disabilities with the disability ratings for non-service connected disabilities. The
restriction is that if the veteran’s service-connected disabilities have contributed to
making the veteran eligible for the pension benefit, the veteran will receive the greater of
the pension benefit or the disability compensation benefit (for the service-connected
disabilities). A veteran cannot receive both disability compensation and the pension
benefit.
P.L. 107-103, the Veterans Education and Benefit Expansion Act of 2001, extended
the pension benefit to veterans aged 65 or over, regardless of disability status (or disability
rating), who meet the other pension requirements (combat/period and income/net worth).
Other. The pension benefit for a veteran convicted of a felony or misdemeanor will
be stopped beginning 61 days after the veteran is imprisoned, and it will resume when the
imprisonment ends. The veteran’s pension benefit may be paid to the veteran’s spouse
or dependent children during the veteran’s imprisonment.
To apply for the pension benefit, a veteran must complete and submit VA Form 21-
526, which is the application form for both disability compensation and the pension
benefit. As part of the claims processing, the veteran will receive a disability rating,
which may require a physical examination.
Interaction with Social Security and Supplemental Security Income
(SSI). Countable income for the veterans’ pension benefit includes any Social Security
benefits received. Therefore, the receipt of Social Security benefits can reduce or
eliminate a veteran’s pension benefit. Countable income does not include any
Supplemental Security Income (SSI) payments received. However, because the SSI
program includes veterans’ benefits as unearned income in calculating the income
limitations for SSI, a veteran’s pension benefit could reduce the veteran’s SSI benefit.12
10 The VA rates disability on a scale of 0-100 in 10% increments, with 100% being totally
disabled. The rating is used for pensions and for disability compensation. For more information
on disability evaluation by the VA, see the “VA Disability Evaluation” section of CRS Report
RL33991, Disability Evaluation of Military Servicemembers, by Christine Scott, Sidath Viranga
Panangala, Sarah A. Lister, and Charles A. Henning.
11 38 U.S.C. §1513 and 38 U.S.C. §1521.
12 For more information on the SSI program, see CRS Report 94-486, Supplemental Security
Income (SSI): A Fact Sheet, by Scott Szymendera, and CRS Report RS20294, SSI Income and
Resource Limits: A Fact Sheet, by Scott Szymendera.

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The Improved Death Pension Benefit
The surviving spouse or dependent child of a veteran may be eligible for the
Improved Death Pension Benefit if eligibility requirements with respect to the deceased
veteran and surviving spouse or dependent child are met, along with an income
requirement.
Deceased Veteran. The deceased veteran must have met the military service
requirements for the Improved Disability Pension with respect to the veteran’s discharge
and period of service.13 However, for the Improved Death Pension, an individual who has
at least two years of honorable military service and who dies in military service but not
in the line of duty is also considered a veteran.14
Surviving Spouse. The surviving spouse cannot be remarried and must have been
married to the deceased veteran:15
! for at least one year (there is no minimum if the surviving spouse and
veteran had a child), and
! must have been wed before December 14, 1944 for deceased veterans of
the Mexican border period and World War I; before January 1, 1957 for
deceased veterans of World War II; before February 1, 1965 for deceased
veterans of the Korean conflict; before May 8, 1985 for deceased
veterans of the Vietnam era; or before January 1, 2001 for deceased
veterans of the Persian Gulf War.
Surviving Children. Surviving children must be under age 18 (or under age 23
if in school) or must have become incapable of self-care before age 18.
Income. The countable income for a surviving spouse or child is calculated like
that of a veteran for the Improved Disability Pension. However, for a surviving spouse
with custody of a deceased veteran’s child, part of the child’s income that is available to
the surviving spouse may be included in countable income.16 For a veteran’s surviving
child, his or her current work income is excluded from countable income, if the income
is not more than the income level at which a federal income tax return must be filed17 plus
postsecondary education or vocational rehabilitation or training expenses paid by the
13 38 U.S.C. §1541(a) and §1542(a).
14 38 U.S.C. §1541(h).
15 38 U.S.C. §1541(f).
16 38 U.S.C. §1541(g).
17 The income level at which a tax return must be filed (the filing requirement) is equal to the sum
of the standard deduction and personal exemption amounts. For tax year 2008, the filing
requirement for a single taxpayer is $8,950 for a taxpayer under age 65.

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child.18 In addition, for a surviving spouse or child, the proceeds from a life insurance
policy on the veteran is excluded from countable income.19
Maximum Benefit Amount. The maximum annual benefit amounts for surviving
spouses and dependent children, like those for veterans, are set in statute and are
automatically increased to reflect the COLA for Social Security benefits. For example,
effective December 1, 2007,20 the maximum annual benefit amount for a surviving spouse
without a dependent child is $7,498, and $9,815 for a surviving spouse with a dependent
child (there is an incremental amount for each dependent child). Maximum annual
benefit amounts are higher if the surviving spouse is housebound or requires aid and
attendance.21 For a surviving child, the maximum annual benefit amount is $1,909.
Medal of Honor Pension
A veteran who has been awarded a Medal of Honor is eligible for a monthly pension
($1,129 as of December 1, 2007).22 Eligibility for the pension is based solely on receipt
of the Medal of Honor, and receipt of the special pension (the Medal of Honor recipient
must elect to receive the special pension) does not reduce any other benefits under U.S.
law. A veteran who has received more than one Medal of Honor is, however, limited to
receiving only one Medal of Honor pension benefit.23
18 38 U.S.C. §1503(a)(10).
19 38 U.S.C. §1503(a)(11).
20 These figures reflect the cost-of-living adjustment (COLA) for Social Security benefits
beginning January 2008. For more information on the Social Security COLA, see CRS Report
94-803, Social Security: The Cost-of-Living Adjustment in January 2008, by Gary Sidor.
21 For more information on current rates, please see the Department of Veterans Affairs Website
at [http://www.vba.va.gov/bln/21/Rates/pen02.htm].
22 The pension benefit was increased to $1,000 and a COLA was provided by P.L. 107-330, the
Veterans Benefits Act of 2002.
23 38 U.S.C. §1562.

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