What is Considered Income for VA Benefits?

What do VA medical benefits cover?

VA medical benefits cover preventative care, such as annual physical exams and immunizations. Inpatient treatments including surgeries, acute care, and kidney dialysis are also covered, along with emergency and walk-in services at some VA health facilities and VA-approved health clinics. Some veterans may additionally qualify for vision care, dental care, caregiver support, prescription drugs, some mental health services, help with transportation to and from medical appointments, and assisted living and home health care. 

VA long-term care benefits 

In certain situations, the VA may also provide long-term care services for eligible veterans who need them. Those care services range from full-time medical supervision to physical therapy to help with daily tasks like dressing and grooming. You might receive these services in your own home or in a nursing home, assisted-living center, or adult day health center that’s either run by the VA or approved by the VA. Eligibility for VA-supported long-term care is based on several factors, including what your VA physician recommends and your service record, income, and proximity to available services. 

What qualifies you for VA medical benefits 

Active military, naval, or air service duty without a dishonorable discharge is a prerequisite for receiving basic VA medical benefits. If you served after September 7, 1980, you must have also fulfilled the VA’s minimum duty requirement. That means you completed 24 continuous months of active duty or you completed the full period for which you were called. If you are a member of the Reserves or National Guard, active duty for training purposes doesn’t meet the minimum duty requirement; you need to have been called to active duty by federal order. The minimum duty requirement is waived if you were disabled while serving or discharged for a hardship.

VA Priority Groups

Beyond the minimum duty requirement, the VA also has a priority group system that influences what benefits you can receive and what your copayments will be. There are eight priority groups, and you’ll be assigned to one of them based on the following factors:

• Your military service history
• Your disability rating
• Your income level
• Whether or not you qualify for Medicaid
• Any other benefits you’re receiving

Veterans with service-related disabilities are placed in the highest priority group, while veterans with a high income and no service-connected disabilities are placed in the lowest priority group. If you qualify for multiple priority groups, you’ll be assigned to the highest group.

Here’s an overview of the VA priority groups and who’s assigned to each:

• Priority Group 1: You may be assigned to priority group 1 if you have a service-connected disability that the VA has rated as 50% or more disabling, or if you have a service connected disability that makes you unable to work. Medal of Honor recipients may also be assigned to priority group 1.
• Priority Group 2: You may be assigned to priority group 2 if you have a service-connected disability that the VA has rated as 30% or 40% disabling.
• Priority Group 3: You may be assigned to priority group 3 if you’re a former prisoner of war, have received the Purple Heart medal, if you were discharged for a disability caused or worsened by your active service, have a service-connected disability rated 10% or 20% disabling by the VA, or if you were awarded special eligibility classification under Title 38, U.S.C § 1151, “benefits for individuals disabled by treatment or vocational rehabilitation”.
• Priority Group 4: You may be assigned to priority group 4 if you’re receiving VA aid and attendance or household benefits, or if you’ve received a VA determination of being catastrophically disabled.
• Priority Group 5: You may be assigned to priority group 5 if you don’t have a service-connected disability or have a non-compensable service-connected disability rates as 0% and have an annual income level below the VA’s adjusted income limits. You may also be assigned to this priority group if you’re receiving VA pension benefits or are eligible for Medicaid.
• Priority Group 6: You may be assigned to priority group 6 if you’re currently or recently enrolled in VA health care, if you served in a theater of combat operation after November 11, 1998, if you were discharged less than 10 years ago, and if you agree to pay some copays. Other criteria includes a compensable service-connected disability rated as 0% disabling, exposure to ionizing radiation during the occupation of Hiroshima and Nagasaki, participation in Project 112/SHAD, and service during select periods from 1941-1998 listed by the VA.
• Priority Group 7: You may be assigned to priority group 7 if your gross household income is below the adjusted income limits for where you live, and if you agree to pay copays.
• Priority Group 8: You may be assigned to priority group 8 if your gross household income is above the VA income limits for where you live, and you agree to pay copays.

What are VA income limits?

VA income limits, also known as income thresholds, refer to the maximum gross household income you can earn and still be eligible for different levels of VA income benefits. VA income limits change each year, and are based on where you live to account for different costs of living from one geographic area to another. They also factor in your dependents, increasing with the more dependents you have.

In the past, the VA published National Income Limits, but this information has not been updated since 2021. To find the VA income limits for 2022-2024, you can use the VA’s income limit calculator. You can check the income thresholds that apply to you by using the VA’s calculator here. You will provide your zip code and number of dependents; the calculator then returns different income thresholds that qualify you for various levels of benefits. If your income is under the lowest threshold, you qualify for free medications, beneficiary travel benefits, and free medical care. If your income is under the highest threshold, you can receive medical benefits, but you will be responsible for full inpatient and outpatient copayments. For context, we’ve provided historical national income limits below, though you should check with the VA for the latest figures applicable to your area in 2024.

VA Income Limits 2020

In 2020, the VA National Income Thresholds were as follows: 

• $34,171 or less if you have no dependents
• $41,005 or less if you have one dependent 
• $43,356 or less if you have two dependents 
• $45,707 or less if you have three dependents 
• $48,058 or less if you have four dependents

VA Income Limits 2021

In 2021, the VA National Income Thresholds were as follows: 

• $34,616 or less if you have no dependents
• $41,539 or less if you have one dependent 
• $43,921 or less if you have two dependents 
• $46,303 or less if you have three dependents 
• $48,685 or less if you have four dependents

If your income is higher than the income limits for where you live, you still may qualify for benefits under the Priority Group 8 threshold. At Priority Group 7, you’d have access to VA healthcare with reduced copayments. At Priority Group 8, you’d be responsible for full copayments.

What is considered income for VA benefits?

The VA income limits only tell half the story, however. The VA compares that it calls your countable income to those stated thresholds. As you might expect, countable income as calculated by the VA may not be the same income number that’s on your tax return.    

So, what does the VA consider countable income? Generally, any payments you receive that aren’t specifically excluded will count towards your income. Wages obviously count as income, as do alimony payments, unemployment compensation, workers compensation, pensions, Social Security benefits, interest, dividends, IRA distributions, business income, and even life insurance proceeds. Less common sources like gambling winnings, timber sales, royalties, and revocable trust payments are also included in your countable income.

Some of the specific exclusions to countable income are caregiver payments, FEMA payments, casualty insurance proceeds, scholarships, relocation expenses, VA pension payments, welfare, Supplemental Security Income, and withheld Social Security overpayments. Payments generated from these sources do not count as income with respect to VA benefits eligibility. 

Does veterans disability count as income?

Veterans disability compensation is counted as income in certain scenarios. If you are applying for VA benefits and your spouse receives VA disability, for example, that disability compensation is considered countable income for your household. 

Does Social Security count as income for VA health benefits? 

Social Security benefits do count as income with respect to eligibility for VA health benefits. Survivor benefits and lump sum death benefits from Social Security also count.

Deducting medical expenses from countable income

There’s one more thing to know about how the VA evaluates your income. You may be able to reduce your countable income by deducting certain medical expenses, including your Medicare premiums and the cost of doctor visits, wheelchairs, chiropractic treatments, dental work, prescription drugs, home health services, hospital expenses, and therapy sessions. See a list of eligible medical expenses here.

You can deduct medical expenses from countable income when your out-of-pocket, unreimbursed healthcare expenses exceed 5% of the VA Maximum Annual Pension Rate (MAPR) for the previous year. In 2024, MAPR for veterans with no dependents ranged from $16,551 to $27,609.

How to apply for VA benefits

The only way to determine your VA benefits precisely is to apply and submit a financial assessment. The VA recommends you apply for benefits online, but you can also do it over the phone at 877-222-VETS, or by visiting a VA medical center in person. To complete the application, you’ll need your Social Security number, your military discharge papers, your latest tax return, basic financial information for you and others in your household, plus account numbers for your current health insurance. 

If you need assistance completing the VA benefits application, you can work with a Veterans Service Officer (VSO) or work with a third-party company like Patriot Angels to help streamline the application process and cut through the red tape. A lot of veterans are unaware these benefits are out there, and even if you do know about them, the process to obtain VA benefits can be confusing and difficult. If you’re struggling to get benefits, let Patriot Angels guide you through the process and get up to $3,253 per month (tax-free) to help pay for senior livi