Pension Income Development

Overview

In This Section

This section contains the following topics:

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1. Developing for Recurring Income

Introduction

This topic contains information on developing for recurring monthly income, including

• general information on developing for recurring monthly income, and
• information about
• Social Security benefits
• retirement or annuity income, and
• severance pay, accrued wages, or vacation pay.

Change Date

June 16, 2026

IX.i.3.C.1.a. General Information on Developing for Recurring Monthly Income

When information about recurring income is needed, some or all of the following information is required depending on the situation:

• gross amount of the recurring income
• date the first check was received
• date and amount of any retroactive payment received, and
• dates of any changes in the monthly rate of income.

References: For more information on

• generating letters with automated tools, see M21-1, Part III, Subpart i, 2.D.1.a
• developing for
• Railroad Retirement income, see M21-1, Part IX, Subpart i, 3.C.4, and
• income tax returns, see M21-1, Part III, Subpart ii, 1.C.3.b
• forms for developing specific types of income, see M21-1, Part IX, Subpart i, 3.B.3, and
• action to take when income for Department of Veterans Affairs (VA) purposes is uncertain, see M21-1, Part IX, Subpart iii, 1.A.2.

IX.i.3.C.1.b. Information About Social Security Benefits

Information about Social Security benefits may be obtained directly from the Social Security Administration (SSA) by using the Federal On-Line Query (FOLQ) through the SSA INQUIRY function in the Veterans Benefits Management System (VBMS).

If information is not available by accessing FOLQ, ask the claimant to furnish a copy of their latest Social Security award or disallowance letter or a statement from SSA, if an award or disallowance letter is not available.

Note: Social Security income for pension and Parents’ Dependency and Indemnity Compensation beneficiaries is verified via the annual match with SSA, once either type of benefit has been awarded.

References: For more information on

• the computer match with SSA, see M21-1, Part XIV, 2.A
• how to access FOLQ, see M21-1, Part III, Subpart ii, 1.B.3.c, and
• the SSA INQUIRY function in VBMS, see the VBMS User Guide.

IX.i.3.C.1.c. Information About Retirement or Annuity Income

For information about retirement or annuity income, ask the claimant to furnish a copy of their latest retirement or annuity award letter.

If an award letter is not available, ask the claimant to have the source of the retirement or annuity income send a statement showing the benefit rate and effective date.

IX.i.3.C.1.d. Information About Severance Pay, Accrued Wages, or Vacation Pay

Send VA Form 21-4192, Request for Employment Information in Connection with Claim for Disability Benefits, to a Veteran’s former employer to request information as to the amount and date of any payment of

• severance pay
• accrued wages, or
• vacation pay.

Note: If the former employer does not respond

• send VA Form 21-4192 to the Veteran, and
• ask that the Veteran have the employer complete the form.

2. Developing for Child Hardship Exclusion

Introduction

This topic contains information on developing for a child hardship exclusion, including

• hardship and the child hardship exclusion, and
• developing for the child hardship exclusion.

Change Date

April 29, 2021

IX.i.3.C.2. a. Hardship and the Child Hardship Exclusion

Per 38 CFR 3.23(d)(6), hardship exists when expenses necessary for reasonable family maintenance exceed the sum of countable annual income plus VA pension entitlement.

Per 38 CFR 3.272(m), the child hardship exclusion applies only in pension cases in which a Veteran or surviving spouse has a dependent child with countable income that is available to the Veteran or surviving spouse.

If the authorization activity determines that counting the child’s income would cause hardship, it is possible to exclude some or all of the child’s income.

Note: This exclusion does not apply if the child is the beneficiary.

Reference: For more information on the child hardship exclusion, see 38 CFR 3.23(d)(6).

IX.i.3.C.2.b. Developing for the Child Hardship Exclusion

If a Veteran or surviving spouse requests an exclusion of a child’s income, provide VA Form 21P-0571, Application for Exclusion of Children’s Income.

Do not develop for hardship if the child’s income is

• not available to the Veteran or surviving spouse, or
• otherwise excludable under 38 CFR 3.272(j).

Note: VA Form 21P-0571 can be used to develop for both availability of child income and hardship exclusion.

3. Developing for Interest Income From Net Worth

Change Date

April 27, 2023

IX.i.3.C.3.a. Developing for Interest Income From Net Worth

Initiate development for interest income from net worth if a claimant reports or Federal tax information (FTI) match information shows

• assets which may be earning interest, but it is not clear whether or not they are
• when FTI is not available and interest bearing assets are over the threshold provided on the application form with no interest income reported
• interest or dividend income of over $250, but does not report the source of the dividends or interest as net worth, or
• the same amount of interest and net worth, as the claimant most likely confused the two fields.

Important: Advise the claimant that failure to respond to the request for information will result in a denial of benefits.

Note: When the claimant has already provided the required VA Form 21P-0969, Income and Asset Statement in Support of Claim for Pension or Parents’ Dependency and Indemnity Compensation (DIC) because assets are over the asset threshold, additional development is only necessary if the interest portion was left blank or there is contradictory evidence.

Reference: For more information on when interest income development is required in connection with upfront verification using FTI, see M21-1, Part IX, Subpart iii, 1.A.2.f.

4. Developing for RRB Benefits

Introduction

This topic contains information on requests for information to and from the RRB concerning monthly benefits payable, tax contributions, unemployment, and sickness insurance, including

• considering railroad retirement benefits when determining entitlement to pension
• verifying railroad retirement benefits
• considering unemployment and sickness insurance from the RRB when determining entitlement to pension
• requesting information from the RRB, and
• RRB replies to information requests.

Change Date

June 16, 2026

IX.i.3.C.4.a. Considering Railroad Retirement Benefits When Determining Entitlement to Pension

Railroad retirement benefits are considered countable income.

Exception: Railroad retirement benefits to Veterans are excluded from countable income for Old-Law Pension purposes under 38 CFR 3.262(g)(2).

IX.i.3.C.4.b. Verifying Railroad Retirement Benefits

Access FOLQ through the SSA INQUIRY function in VBMS to verify monthly benefits payable by the Railroad Retirement Board (RRB).

Ask the claimant to furnish the original or a certified copy or photocopy of their award letter from the RRB in every case in which

• the monthly benefits payable by the RRB are in question, or
• there is a probability that recoupment of railroad retirement tax contributions will be an issue.

References: For more information on

• FOLQ, see
• M21-1, Part III, Subpart ii, 1.B.3, and
• the FOLQ User Guide, and
• the SSA INQUIRY function in VBMS, see the VBMS User Guide.

IX.i.3.C.4.c. Considering Unemployment and Sickness Insurance From the RRB When Determining Entitlement to Pension

Unemployment and sickness insurance are based on earnings, but no contribution is made by the employee. The entire amount is considered income for the purpose of determining entitlement to pension.

IX.i.3.C.4.d. Requesting Information From the RRB

If the claimant is unable to furnish the information, or if verification is required and cannot be obtained through FOLQ, send a letter, in duplicate, to the RRB. Use the table below to determine the appropriate address and required information for this letter.

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Important:

• In the absence of contradictory information concerning unemployment and sickness insurance, accept the claimant’s statement showing the amount received or expected.
• Allow 30 days for a response to the initial request and 15 days for a response to a follow-up request, if necessary, being sure to annotate the follow-up request with Second Request.

Reference: For information on handling claims when Federal records are not available, see M21-1, Part III, Subpart i, 2.C.1.

IX.i.3.C.4.e. RRB Replies to Information Requests

The RRB will supply the requested information on the original letter or courtesy copy, or both, if two of their regional offices are involved.