Veterans' Pensions: Fact Sheet

Veterans' Pensions: Fact Sheet

Order Code 98-879
Updated February 26, 2001
CRS Report for Congress
Received through the CRS Web
Veterans’ Pensions: Fact Sheet
Dennis W. Snook and Alice D. Butler
Domestic Social Policy Division
Wartime veterans and their survivors are assured of income support if disabilities render
them unemployable, and if they do not have sufficient assets to provide for their own
maintenance. Called veterans’ pensions and administered by the Department of Veterans
Affairs (VA), monthly cash payments are made to qualified veterans or survivors so that their
total income from all countable sources reach specified annual levels. Separate support levels
are established for veterans and survivors. These levels are higher for permanently housebound
recipients, for those needing a paid attendant, and for those with qualified dependents. Support
levels for these veterans and survivors are annually adjusted to reflect changes in the cost-of-
living as measured by the Consumer Price Index (CPI). This fact sheet will be updated annually
for changes in data.
In FY2000, total veterans’ pension outlays were estimated to be $3.1 billion. Payments
were made to an estimated 373,000 veterans and 266,000 survivors, a caseload decline from
the previous year of 3% and 5%, respectively. For FY2000, it is estimated that benefits
averaged $6,286 for veterans and $2,657 for survivors, annually. In 46% of the total pension
caseload, the pension is based on wartime service in World War II or earlier.
Program Description. The need-tested veterans’ pension is one of several systems
of cash benefits granted to veterans of military service; others being VA compensation (granted
for disabilities incurred during military service), and Department of Defense disability pay
(granted when a disability stops military service after the service-person has completed at least
8 years active duty), and retired pay (granted at completion of a military career). Veterans’
compensation and military disability or retired pay are recompense for sacrifices and longevity
attributed to a period of military service. Veterans’ pensions are income guarantees earned by
virtue of service during wartime and paid to totally and permanently disabled individuals who
meet income eligibility.
Eligibility for a veterans’ pension requires a discharge (other than dishonorable) from active
service of 90 days or more, at least one of which must have been served during a period
defined in law as a period of war. The veteran must be disabled for reasons neither traceable
to military service nor to willful misconduct. There is no disability requirement for eligible
survivors.
Benefits. The VA pays monthly amounts to qualified veterans after considering other
sources of income, including Social Security, retirement, annuity payments, and income of a
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dependent spouse or child, to bring their incomes to the above support levels. Levels are
increased by $2,109 annually for veterans with service in World War I or earlier, in recognition
of the absence for those veterans of education and home loan benefits available to veterans of
later wars. Countable income can be reduced for unreimbursed medical expenses, as well as
some educational expenses incurred by veterans or their dependents. Pensions are not payable
to veterans with substantial assets.
Pensions awarded before 1979 were paid under one of two programs, referred to as Old
Law and Prior Law, both of which were governed by complex rules regarding countable
income and exclusions. Applications beginning January 1, 1979 were processed under the
Improved Law program, which provided higher benefits but eliminated most exclusions,
offsetting countable income dollar-for-dollar. In FY2000, about 92% of veterans and 70% of
survivors drew their benefits under improved law.
Table 1. Maximum Annual Benefits: December 2000
($ in thousands)
Veteran
Survivor
Beneficiary without dependent
$9,304
$6,237
With one dependent
12,186
8,168
Permanently housebound w/o dependent
11,372
7,625
With one dependent
14,253
9,551
Needing regular aid and attendance w/o dependent
15,524
9,973
With one dependent
18,405
11,900
Each additional dependent
1,586
1,586
Source: Table prepared by the Congressional Research Service (CRS) using data provided by the Veterans Benefits
Administration.
In comparison, 1999 poverty thresholds for persons aged 65 and over were $7,990 per
year for single persons and $10,869 for two persons, according to Census Bureau estimates
published in the September 2000 Current Population Survey.
Veterans drawing VA pensions are automatically eligible for VA medical benefits for the
treatment of nonservice-connected conditions. In FY1997 (the last year for which data are
available), 72,000 pension recipients were discharged from VA medical centers (including
transfers to other VA facilities) after receiving in-patient treatment for nonservice-connected
conditions, with about 2,800 patients remaining in the facilities.
Processing times. Processing times for claims averaged 112 days for veterans and
68 days for survivors during 1999, compared to Office of Management and Budget goals of
77 and 44 days, for these claims.

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2001 COLA. In January, 2001, the target income levels upon which individual VA
pension benefits are based increased by 3.5%, the same Cost of Living Adjustment (COLA)
applied to Social Security and most other federal benefits.