Overview
In This Section |
This section contains the following topics:
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1. Establishing Dependents for Current-Law Pension Purposes
Introduction |
This topic contains information and the special requirements for establishing dependents for current-law pension purposes, including
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Change Date |
December 6, 2016
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V.iii.1.F.1.a. Establishing Dependents for Current-Law Pension Purposes |
M21-1, Part III, Subpart iii, 5.A.1, explains the requirements for establishing a person as a spouse or child of a Veteran. However, even if the child or spouse relationship is established, it does not necessarily mean that the person can be established as a dependent for current-law pension purposes.
Reference: For more information about how a dependent’s income is counted on a current-law pension award, see M21-1, Part V, Subpart iii, 1.F.2.
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V.iii.1.F.1.b. Establishing a Spouse for Current-Law Pension Purposes |
Use the table below to determine if a spouse can be established for current-law pension purposes, once the marriage between the Veteran and spouse has been established.
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V.iii.1.F.1.c. Establishing a Child for Current-Law Pension Purposes |
Use the table below to determine if a child, including an adopted child or stepchild, can be established as a dependent for current-law pension purposes once the child relationship has been established.
Reference: For information on establishing a child’s relationship to a Veteran or surviving spouse, see M21-1, Part III, Subpart iii, 5.G.
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V.iii.1.F.1.d. Establishing Custody of a Child for Current-Law Pension Purposes |
Presume that the Veteran or surviving spouse has custody of a child regardless of where the child lives, unless there is evidence that the Veteran or surviving spouse has been divested of the legal obligation to support the child or unless there is evidence that the surviving spouse is not the child’s parent or legal custodian.
Resolve unusual questions concerning child custody by securing a legal opinion from the Regional Counsel, per M21-1, Part III, Subpart iii, 5.A.3.
Notes:
References: For more information on
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2. Counting the Income of Dependents
Introduction |
This topic contains information on counting the income of dependents, including
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Change Date |
June 18, 2015
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V.iii.1.F.2.a. General Information on Counting the Income of Dependents |
The income-counting procedures apply equally to counting the income of dependents.
Exception: There is one major exception to the general rule that all income must be counted for 12 months. A dependent’s income does not
have to be counted for a full 12 months if the dependent is removed from the award. The dependent’s income is removed with the dependent, even if this results in the income being counted for less than 12 months. Reference: For more information on counting income for current-law pension, seeM21-1, Part V, Subpart iii, 1.E.6.
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V.iii.1.F.2.c. Examples: Counting the Income of a Spouse |
Example 1:
Situation:
Result: Discontinue the Veteran’s award effective November 1, 2013, because income exceeds the maximum annual pension rate (MAPR). The Veteran’s contributions to the spouse who physically lives apart for reasons related to marital discord make the spouse a dependent for current-law pension purposes from the date of the first contribution (October 28, 2013). Consequently, the spouse’s income is countable from the same date. Apply the end-of-the-month rule for income-counting to arrive at a November 1, 2013, stop date.
Example 2:
Situation: Apply the same facts as the example above. However, after having benefits discontinued because income exceeds the MAPR, the Veteran reports that contributions to the spouse ceased on January 22, 2015.
Result: Removed the spouse and resume the award with a payment date of February 1, 2015 (because of 38 CFR 3.31), to pay at the single Veteran MAPR based on the Veteran’s income only.
Reference: For information on the time limits for claiming an increased rate of pension due to the loss of a dependent, see M21-1, Part V, Subpart iii.1.F.3.i.
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V.iii.1.F.2.d. Counting the Income of a Dependent Child |
A dependent child’s income is countable in computing a Veteran’s or surviving spouse’s IVAP if the income is reasonably available to the Veteran or surviving spouse.
A dependent child’s income is reasonably available if it can readily be applied to meet the Veteran’s or surviving spouse’s expenses necessary for reasonable family maintenance, per 38 CFR 3.23(d)(6).
Use the table below to determine if the dependent child’s income is countable.
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V.iii.1.F.2.g. Developing Availability of Dependent Children’s Income |
Use VA Form 21-0571, Application for Exclusion of Children’s Income, for developing availability of dependent children’s income.
If it is determined that a child’s income is available to a Veteran or surviving spouse, consider whether all or part of the income can be excluded on the basis of the
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V.iii.1.F.2.h. Counting the Income of an Unestablished Dependent |
Benefits may be awarded without resolving the status of a claimed dependent; however, it may be necessary to count a dependent’s income even if the dependent cannot be established.
When evidence necessary to establish the dependent has not been submitted within the control period, determine the claimant’s MAPR without consideration of the claimed dependent, and count the claimed but unestablished dependent’s income.
Notes:
Reference: For more information on processing awards in VETSNET Awards, see the VETSNET Awards User Guide.
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V.iii.1.F.2.j. Resolving the Status of a Dependent |
When an award is made that includes the income of an unestablished dependent, send a locally-generated letter
If such evidence is received, add the dependent or remove the income, as appropriate.
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V.iii.1.F.2.k. Failure to Resolve the Income of Dependents |
Do not award benefits in any current-law pension case unless the income of the claimant, and all actual or potential dependents, is of record. If the claimant fails to furnish this information, deny the claim for failure to furnish requested evidence.
If a beneficiary with a running award reports a new dependent whose income is questionable, send the beneficiary a notice of proposed adverse action, and advise the beneficiary that failure to furnish complete income information for the dependent will result in termination of the pension award.
Use the table below to determine how to proceed if the required information is not received.
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V.iii.1.F.2.l. Reallocation of Social Security When a Family Member Is Removed |
If Social Security beneficiaries are receiving the maximum family benefit, there is generally a reallocation of benefits when a member of the family loses entitlement. The total benefit is usually reallocated equally to the remaining family members.
Assume Reallocation for Pension
If Social Security is received by three or more family members, at least one of whom is a child under age 18 at the time of award preparation, retain the Social Security income on future award lines when a dependent entitled to Social Security benefits is removed. This assumes reallocation of Social Security benefits among the remaining entitled dependents, including the spouse. Informing the Beneficiary
No controls are necessary to verify the future IVAP. However, when the initial award is made reallocating dependents’ income, inform the beneficiary using the following statements: “Your records show that you have dependents in receipt of Social Security benefits. In an effort to avoid an overpayment of VA benefits, we are projecting that your Social Security family benefit will not decrease as each child is removed from your award. You must notify us of any and all changes in the Social Security rates for members of your family by furnishing a statement from the Social Security Administration showing the change in your Social Security benefit when a child is no longer on their record. We will then adjust your VA benefit accordingly and award any retroactive amount due.”
Note: If evidence is received that the assumed Social Security income is not correct, adjust IVAP as of the first of the month after the month during which the dependent is removed.
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V.iii.1.F.2.m. Examples: Reallocation of Social Security When Family Member Removed |
Example 1:
Situation: A Veteran has a spouse and three dependent children in his custody below the age of 18 years. The spouse and three children each receive $75 monthly from Social Security, totaling $300 for the dependents, and the Veteran receives $300, for a total of $600 a month (an IVAP of $7,200).
Result: When preparing the initial award, the IVAP effective on the 18th birthday of the oldest child reflects that the $300 is assumed to be reallocated to the three remaining dependents. In other words, continue the $7,200 IVAP when the child is removed. For the IVAP as of the next oldest child’s birthday, apply the same procedure. Continue to pay based on IVAP of $7,200 and attribute Social Security of $150 to each dependent.
Example 2:
Situation: Apply the same facts as the example above. However, evidence is received from the Veteran that the reallocation of benefits when the oldest child reached age 18 resulted in each remaining dependents receiving $95 monthly. Therefore, the Veteran’s IVAP will be $7,020 as of the first of the month after the oldest child is removed, when 38 CFR 3.31 is applied.
Result: If the new rate of Social Security is such that the new VA rate, without the dependent and with the corrected reallocated rate of Social Security, is higher than the rate of pension prior to the removal of the dependent, defer the removal of the child, as well as the corrected income, to the first day of the month following the child’s 18th birthday.
Future award lines removing the remaining dependents will again assume the reallocation of the total benefits, and the IVAP will remain $7,020 unless evidence is received to the contrary.
Reference: For more information on removing dependents from current-law pension awards, see M21-1, Part V, Subpart iii,1.F.3.
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V.iii.1.F.2.n. Apportionments to a Spouse Who Physically Lives Apart for Reasons Related to Marital Discord |
The same considerations apply to making apportionment decisions in current -law pension cases as in other types of claims. However, before making an apportionment to a spouse, consider the possible effect on the Veteran’s overall pension entitlement.
Under 38 CFR 3.23(d), an apportionment should not be granted to the spouse of a competent Veteran unless the Veteran and spouse are either physically living apart for reasons related to marital discord or reside together, but do not cohabit. VA does not make apportionments for a beneficiary’s convenience. A spouse who is either physically living apart from the Veteran or residing with the Veteran, but not cohabitating is not considered to be a dependent (and therefore the spouse’s income is not countable) unless the Veteran is making contributions to the spouse’s support.
Under 38 CFR 3.451, do not make an apportionment to the spouse of a Veteran in receipt of current-law pension if the effect of the apportionment would be to create dependency and cause an overall reduction in the Veteran’s rate of pension. Deny the apportionment on the grounds that it would cause the Veteran undue hardship.
Reference: For more information on apportionment to a spouse who physically lives apart for reasons related to marital discord, see M21-1, Part III, Subpart v, 3.A.1.
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V.iii.1.F.2.o. Example
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Situation: A married Veteran is receiving current-law pension at the rate of $464 per month based on IVAP of $5,000. The Veteran is being paid at the single Veteran MAPR because
VA receives an apportionment claim from a spouse who physically lives apart for reasons related to marital discord. Development reveals that the spouse has earned income of $4,800 per year. The spouse is supporting four children from a prior marriage (who were never established as the Veteran’s stepchildren) and the Veteran lives free with a wealthy relative.
Result: Although the spouse could, under the circumstances, establish need, the effect of awarding the apportionment is to establish the spouse as a dependent that will in turn require that the spouse’s $4,800 in earned income be included in the Veteran’s IVAP. This will reduce the Veteran’s monthly rate of Pension from $464 per month to $337 per month. Because this will cause undue hardship on the Veteran, deny the apportionment claim.
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3. Removing Dependents from Improved Pension Awards
Introduction |
This topic contains information on removing dependents from current-law pension awards, including
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Change Date |
June 18, 2015
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V.iii.1.F.3.a. Removing a Veteran’s Spouse Due to Death, Divorce, or Annulment |
If a Veteran’s spouse dies or the Veteran’s marriage ends in divorce, or annulment, and a decreased rate of pension or loss of entitlement would result, reduce or discontinue the award as of the first day of the month following the month during which the death, divorce, or annulment occurs under 38 CFR 3.500(g)(2) and 38 CFR 3.501(d).
Note: When reducing or discontinuing benefits, pay through the effective date shown in 38 CFR Part 3, and reduce or discontinue benefits as of the next day.
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V.iii.1.F.3.b. Removing a Veteran’s Spouse Due to Physically Living Apart for Reasons Related to Marital Discord |
If the spouse ceases to be a dependent because the Veteran and spouse physically live apart for reasons related to marital discord and the Veteran is not making reasonable contributions to the spouse’s support, remove the spouse from the award effective the date of separation, if removing the spouse would result in a decreased rate of pension or loss of entitlement. Do not apply the end-of-the-month rule.
Example 1: A married Veteran’s spouse has no income. The Veteran reports separating from the spouse on May 6, 2014. The Veteran does not contribute to the spouse’s support. Remove the spouse from the award effective May 6, 2014.
Example 2: A married Veteran’s IVAP is $14,000 per year, and his monthly pension entitlement in 2014 is $214 per month. The Veteran reports separating from the spouse on May 6, 2014. The spouse has no countable income and the Veteran does not contribute to the spouse’s support. Discontinue the Veteran’s award effective May 6, 2014.
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V.iii.1.F.3.c. Removing a Veteran’s Spouse Due to Cessation of Contributions |
If a spouse who physically lives apart for reasons related to marital discord ceases to be a dependent because the Veteran stops making reasonable contributions to the spouse’s support, remove the spouse (reduce or discontinue the award) as of the day after the date the Veteran made the last contribution to the support of the spouse who physically lives apart for reasons related to marital discord. Do not apply the end-of-the-month rule.
Reference: For more information on counting the income of dependents, seeM21-1, Part V, Subpart iii,1.F.2.
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V.iii.1.F.3.d. Removing a Child Due to Death or Marriage |
If a child dies or marries, reduce or discontinue the parent’s running or suspended award effective the first day of the month following the month of death or marriage. However, if the child was scheduled to go off the award from an earlier date, use the previously scheduled removal date, under 38 CFR 3.500(g)(2) and 38 CFR 3.500(n)(2).
Example 1: A 16-year-old child marries on September 29, 2014. Remove the child October 1, 2014.
Example 2: A child turns 18 on October 14, 2014. The child marries on October 29, 2014. Remove the child October 14, 2014. (The child was previously scheduled to be removed as of the child’s 18th birthday under 38 CFR 3.503(a)(1).
Note: When reducing or discontinuing benefits, pay through the effective date shown in 38 CFR Part 3, and reduce or discontinue benefits as of the next day.
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V.iii.1.F.3.e. Removing a Child Due to Cessation of Contributions |
If a child who is out of the custody of a Veteran ceases to be a dependent because the Veteran stops making reasonable contributions to the child’s support, remove the child from the award as of the day after the date the Veteran made the last contribution to the support of the child.
Do not apply the end-of-the-month rule.
Reference: For more information on the definition of custody, see 38 CFR 3.57(d).
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V.iii.1.F.3.f. Marriage of Schoolchild |
If a schoolchild marries and stays in school, continue to pay benefits until the first of the month after the month of marriage.
However, if the child discontinues school attendance before marrying, reduce the award effective the first day of the month following the date the child last attended school.
Example: A 21 year old schoolchild marries on May 24, 2014, but remains in school. Remove the child on June 1, 2014.
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V.iii.1.F.3.g. Scheduling Future Dependency Losses |
When processing an award that adds a child, prepare award lines to show future changes due to the child’s reaching age 18 or discontinuing approved school attendance.
If a child has countable income, recalculate IVAP on the future award lines to exclude each child’s income as he or she goes off the award.
If the loss of the child and the child’s income warrants an increase in the pension rate, do not pay the increase until the first of the following month, per 38 CFR 3.31.
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V.iii.1.F.3.h. Loss of a Dependent Before the Dependent Is Added to the Award |
If a dependent is lost after the date of entitlement to additional benefits for the new dependent, but prior to award action to add the dependent, remove the dependent from the award effective the actual date of loss.
Notes:
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V.iii.1.F.3.i. Loss of a Dependent Causes an Increased Rate of Pension |
Use the table below to determine when to increase the rate of pension after the loss of a dependent.
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4. Removing the Income of Dependents
Introduction |
This topic contains information on removing the income of dependents, including
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Change Date |
December 6, 2016
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V.iii.1.F.4.a. When to Remove a Dependent’s Income |
The general rule for current -law pension is that all income must be counted for 12 months.
Do not count an established dependent’s income after the dependent has been removed from the award, even if this results in the income of the dependent being counted for less than 12 months.
When an established dependent with income is removed from a Veteran’s or surviving spouse’s award, remove the dependent’s income as well.
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V.iii.1.F.4.b. How to Remove a Dependent’s Income |
Use the table below to determine how to remove a dependent’s income.
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V.iii.1.F.4.c. Date of Income Removal in Accordance With 38 CFR 3.31 |
Use the table below to determine the date to remove the dependent’s income in accordance with 38 CFR 3.31.
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V.iii.1.F.4.d. Date of Income Removal When a Child’s Income Is No Longer Available |
Use the table below to determine the date to remove the dependent’s income when the child’s income is no longer available.
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V.iii.1.F.4.e. Example 1: Removing the Income of Dependents |
Situation: The award for a surviving spouse with a child is payable from August 1, 2014. The child turns 18 on October 28, 2014. The only family income is the child’s Social Security of $521 per month. The family unit received three $521 Social Security checks totaling $1,563 between the date of entitlement and the date the child went off the award (short-term recurring income).
Result: Count IVAP of $1,563 effective August 1, 2014. Reduce IVAP to $0 on November 1, 2014, under 38 CFR 3.31.
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V.iii.1.F.4.f. Example 2: Removing the Income of Dependents |
Situation: A married Veteran receives pension based on IVAP of $1,200. The $1,200 represents the earned income of the Veteran’s spouse. Therefore, removing the spouse will decrease the Veteran’s rate of pension. The spouse’s earned income of $100 per month has been counted on the award for more than 12 months. The spouse dies on March 3, 2014. The Veteran receives $2,000 life insurance on June 8, 2014. The Veteran claims no unreimbursed final expenses.
Result: The end-of-the-month rule applies. Adjust the award as shown in the table below:
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V.iii.1.F.4.g. Example 3: Removing the Income of Dependents |
Situation: A married Veteran’s award is effective August 7, 2014. The Veteran is paid based on IVAP of $3,600. The $3,600 represents the spouse’s wages of $300 per month. The spouse dies on November 13, 2014. The total earned income received by the spouse between August 7, 2014, and November 13, 2014, was $1,200.
Result: Charge IVAP of $1,200 from September 1, 2014. Pay the Veteran at the single Veteran rate based on IVAP of $0 from December 1, 2014.
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V.iii.1.F.4.h. Example 4: Removing the Income of Dependents |
Situation: A married Veteran with a child receives pension based on IVAP of $3,000. The Veteran receives interest income of $1,000 per year. The child receives interest income of $2,000 per year. The spouse has no income.
The Veteran reports a separation from the spouse on September 27, 2014. The child moves out with the spouse. The Veteran does not contribute to the support of the spouse or child. The child’s bank account is in the name of the spouse as guardian of the child. The child’s interest is not available to the Veteran.
Result: Remove the spouse from the award as of September 27, 2014. Remove the child’s $2,000 as of October 1, 2014, the first of the month after it ceased to be available, because 38 CFR 3.31 applies. The child’s income is no longer available to the Veteran, but the Veteran is still entitled to additional benefits for the child because the child has not been removed from the Veteran’s legal custody.
References: For more information on
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V.iii.1.F.4.i. Example 5: Removing the Income of Dependents |
Situation: The Veteran’s only income is VA pension and Social Security of $900 per month.
On October 28, 2014, the Veteran starts sending $50 a month to a spouse who physically lives apart for reasons related to marital discord and is not currently a dependent on the Veteran’s benefits. The spouse earns $8,000 per year.
The Veteran’s award is discontinued effective November 1, 2014 because income exceeds the MAPR.
After having benefits discontinued, the Veteran reports that contributions to the spouse ceased on March 14, 2015.
Result: Remove the spouse and resume the award with a payment date of April 1, 2015 (because of 38 CFR 3.31), to pay at the single Veteran MAPR based on the Veteran’s income only. In addition, because the spouse’s income was not counted on the Veteran’s award for at least one year, develop to the Veteran to obtain the amount of wages received by his spouse from October 28, 2014 until March 14, 2015 to see if the Veteran’s award is able to be resumed from an earlier effective date.
Reference: For more information on counting short-term recurring income, seeM21-1, Part V, Subpart iii, 1.E.6.m.
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12-6-16_Key-Changes_M21-1V_iii_1_SecF.docx | May 20, 2019 | 74 KB |
transmittal-05_07_09.doc | May 20, 2019 | 59 KB |
Change-June-18-2015-Transmittal-Sheet-M21-1MRV_iii_1_SecF_TS.docx | May 20, 2019 | 39 KB |
Transmittal-02_13_07.doc | May 20, 2019 | 55 KB |
Transmittal-M21-1MRV_iii_1_TS.doc | May 20, 2019 | 74 KB |
in Chapter 1 The Effect of Income and Net Worth on Pension and Parents Dependency and Indemnity Compensation (DIC), Part V Pension and Parents Dependency and Indemnity Compensation (DIC), Subpart iii Authorization issues
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