Panel votes to ease income rules on VA pensions

A House subcommittee has expanded the types of income that would not be counted in determining eligibility for pensions aimed at veterans with low incomes, and has found a way to pay for the change that improves its chances of becoming law.

The bill, HR 4541, addresses two circumstances in which low-income veterans have complained about losing a Veterans Affairs Department pension. One is when they receive a state or local veterans’ pension, something available in about five states. The second is when a veteran receives a payment for an accident, theft or loss.

Under current law, an insurance or court settlement, even it if is just reimbursement of lost or damage items, could result in a low-income veteran losing a VA pension for up to a year. Receiving a state or local pension also counts as income that would prevent qualifying for the federal VA pensions paid to veterans who do not have service-connected disabilities but whose income falls below $11,380 for an individual.

The Veterans’ Pensions Protection Act of 2010, which passed the House Veterans’ Affairs Committee’s disability assistance panel by voice vote, would create a new and somewhat complicated rule on payments related to accidents and thefts: Reimbursements for replacement or repair would not count as income as long as the money is not excessive. Veterans may also receive awards for pain and suffering, although the VA would have to determine how much would be acceptable.

For veterans receiving state and local pensions — up to $5,000 paid due to injury or disease — would not count as income.

Both changes would take effect Oct. 1, 2011.

To pay for the legislation, the bill would extend until Sept. 30, 2015, a program in which VA uses Internal Revenue Service records to verify how much income a veteran is receiving, which reduces fraud in income-based benefits like the pension for nondisabled veterans. IRS income verification is used now by VA, but authority to do such checks expires under current law on Sept. 30, 2011.

The bill will not be considered by the full House Veterans’ Affairs Committee until September and is unlikely to become law on its own. But the measure is considered a prime candidate to become part of a larger package of veterans-related legislation that lawmakers hope to compile this fall that could become law before the November elections, according to House and Senate aides.