Submissions made to the Koshyari Committee - Fact Check

Submissions to the Koshyari Committee on  One Rank One Pension

Final Part of Fact Check

The truth is incontrovertible. Malice may attack it. Ignorance may deride it.

But in the end, there it is. - Winston Churchill

List of References: -

A -       The 142^nd Report of the Committee on Petitions on One Rank One Pension (hereinafter Koshyari Committee Report) from the Rajya Sabha website (http://164.100.47.5/newcommittee/reports/EnglishCommittees/Committee%20on%20Petitions/141.pdf)

B-        Volume III of the Third Central Pay Commission (3^rd CPC) Report on Pay, Allowances and Non-Effective Benefits for Armed Forces Personnel

C -       Part II of the Fourth Central Pay Commission (4^th CPC) Report on with Pay, Allowances and Non-Effective Benefits for Civilian employees of the Government of India and Armed Forces Personnel  

D -       Chapter 5 of 6^th CPC Report with particular attention to Pensions and Retirement benefits of Armed Forces personnel (https://www.india.gov.in/people-groups/community/.../sixth-central-pay-commission

E -       High Court Judges Salaries and Conditions of Service Act, 1954  and the Supreme Court Judges Salaries and Conditions of Service Act, 1958 as amended in 1986 from the Ministry of Law website lawmin.nic.in/ld/P-ACT/1954/A1954-28.pdf

F -       MoD ID No. 12 (01)/2014-D(Pen/Pol dated 26^th February 2014 for a methodology to implement of OROP

G -       One Rank One Pension scheme: A brief for members of the Lok Sabha by the Lok Sabha Secretariat available at 164.100.47.193/intranet/pension_scheme.pdf

from www.parliamentofindia.nic.in/ls/intro/p13.htm

H -       Decisions of the honourable Supreme Court in

 (i)       Deokinandan Prasad Vs State of Bihar (1971, 1983 and 1984) from https://indiankanoon.org/doc

(ii)       D S Nakara & Others Vs Union of India and Others (Writ Petitions Nos. 5939-41 of 1980) judgment delivered on 17^th December 1982 from https://indiankanoon.org/doc

(iii)      UoI & Others Vs Maj Gen SPS Vains & Others in Civil Appeal No. 2566 of 2008 in SLP No. 12357 of 2006 in OA 100/2010 and MoD  No. 4 (140)/2010/D (Pen/Legal) dated 10^th August 2015 and Annexure I wherein only the 53 petitioners of OA No. 100/2010 in AFT, Chandigarh are mentioned for refixation and payment of arrears through RTI online No. DEXSW/R/2015/50734

J -        Judgment of a Division Bench of 3 Judges dated 27^th January 2005 in Principal Accountant General and Others Vs. C Subba Rao & Others in the Andhra High Court (Writ Petition Nos. 22042, 24191, 24308, 24324 & 24325 of 2003) whether a retired Govt employee is entitled to an increment after retirement (Source: https://indiankanoon.org/doc/1005408/ )

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The Preamble

1          Much has been written, argued, and discussed about the 142^nd Report of the Committee on Petitions of the Rajya Sabha on One Rank One Pension was submitted on 19^th December 2011. The Koshyari Committee Report, as it is more popularly known as, is based on submissions made by Armed Forces representatives, MoD and MoF officers, Ex-Servicemen organisations, NGOs and individuals.

2.        Much water, blood, sweat, tears, excitement and days have passed since 19^th December 2011. This is an attempt to analyse submissions vis-à-vis the facts as they exist, with links provided to the sources of information for independent checks.  

Definition of OROP & Budget Speeches in Parliament

3.        The definition OROP in the Koshyari Committee Report, and  MoD Files, are as follows: -

 

Definition of OROP by Koshyari Committee (Para 3 of the report) 16th December 2011	Definition of OROP from Minutes of the MoD meeting on 26th February 2014	Definition of OROP in the Implementation Order of 7th November 2015 (Para 2)
One Rank One Pension (OROP) implies that uniform pension be paid to the Armed Forces Personnel retiring in the same rank with the same length of service irrespective of their date of retirement and any future enhancement in the rates of pension to be automatically passed on to past pensioners. This implies bridging the gap between the rate of pension of the current pensioners and the past pensioners and also future enhancements in the rate of pension to be automatically passed on to the past pensioners.	One Rank One Pension’ (OROP): - It is noted that “One Rank One Pension’ (OROP) implies that uniform pension be paid to the Armed Forces personnel retiring in the same rank with the same length of service irrespective of the date of retirement and any future enhancement be automatically passed on to the past pensioners. This implies bridging the gap between the rate of pension of the current pensioners and the past pensioners and also future enhancements in the rate of pensions to be automatically passed on to past pensioners.  (Source: - Para 3 of MoD ID No. 12 (01)/2014-D(Pen/Pol dated 26th February 2014)	OROP implies that uniform pension be paid to the Defence Forces Personnel retiring in the same rank with the same length of service regardless of their date of retirement which implies bridging the gap between the rates of pension of current and past pensioners at periodic intervals.

SUBMISSION TO KOSHYARI COMMITTEE – PART I

4.        This part deals with the following submissions: -

(a)       Para 2.1, 6.2, 10.2 of the Report & Point No. 1 in Army presentation slide titled Maj Recommendations of Shri K P Singh Deo Committee (in Annexure II of the Koshyari Committee Report): - One Rank One Pension existed before the 3^rd CPC abolished it.

(b)       (Para 9 (i):    3^rd CPC reduced the pension for Armed Forces personnel from 70 per cent to 50 percent and increased pension of civilians from 33 percent to 50 percent.

(Paraphrased for brevity)

Pension from Independence till 4^th Central Pay Commission, 1986

5.        The factual position is contained in Chapter 53, Volume III of the 3^rd CPC Report dealing with Non-effective Benefits for Armed Forces personnel.

6.        Pay and Allowances of the Armed Forces was recommended by the Post War Pay Committee and implemented as the New Pay Code on 1^st July 1947. The pensionary benefits for Armed Forces were looked into by the Armed Forces Pension Revision Committee (AFPRC) - 1949-50 and implemented as the Post War Pension Code in 1953.

7.        The Standard Rate of Pension was implemented in the Post War Pension Code (1953 based on the recommendations of the AFPRC. Standard Rate of Pension did not increase with any increase in service as the following extract for Chapter 53, Volume III of 3^rd CPC Report shows: -

Para 7.          Although the Services favour the continuance of the existing standard rate system, they have pointed out that the pension earned by a Service officer is related to the minimum prescribed for the rank and is not increased if the actual period of qualifying service rendered by him is more…..(emphasis supplied). 

Rank	Minimum length of qualifying service
Subaltern	20 years
Captain	20 years
Major	22 years
Lt Colonel	24 years
Colonel	26 years
Brigadier	28 years
Maj General	30 years
Lt General	30 years
General	30 years

8.        Standard Rate of Pension continued from 1953 till the 4^th CPC recommendations of 1986. In between were the Post War Pay Committee of 1953, the Raghuramiah Committee of 1960 and then the 3^rd CPC of 1973. 

In 1970, there was just one change i.e. Armed Forces pensioners were also given Death-cum-Retirement Gratuity (DCRG) (Para 2, Chapter 53). 

Officers of the Flying Branch of the Air Force, Naval Aviators, Submariners up to the rank of Wg Cdr/Cdr  and officers of AMC, ADC and RVC had higher pay (Please refer to Para 27 to 47 of Chapter 50 titled ‘Service Officers’ Pay’ of the Vol III of the 3^rd CPC Report). 

The table below shows the Pay and Pension (after adjustment for DCRG) for all branches except Flying, Naval Aviators, Submariners, AMC, ADC and RVC: -

Rank	Before 3rd CPC		Recommended By 3rd CPC
From Volume III of the 3rd CPC Report	Maximum Pay	Standard Rate of Pension	Maximum Pay	Standard Rate of Pension
	Chapter 50 Para 19 Table V	Chapter 53 Para 6 Table IV	Chapter 50 Para 21 Table VI	Chapter 53 Para 14 Table V
2nd Lieutenant	400	272	790	325
Lieutenant	540	272	950	325
Captain	990	377	1450	500
Major	1300	482	1750	625
Lt Col Actg	1500	587	1900	700
Lt Col Substantive	1500	587	1900	850
Colonel	1930	638	2175	1000
Brigadier	2150	696	2400	1050
Maj General	2750	735	2750	1100
Lt General	3000	819	3000	1100
General	3500	840	3500	1150

9.        The 3^rd CPC declined to apply Civil Pension Rules for Armed Forces but recommended the benefit of weightage for truncated careers as follows (from Chapter 53, Volume III of 3^rd CPC Report) :-

Para 4.          By and large, the principles followed by the AFPRC continue to be valid. Our examination shows that it would not be proper to adopt the civil pension rules in the case of Service personnel because it would fail to take into account the peculiar hierarchical structure of the Services and the operational requirement of ensuring that the vast majority of the personnel in the armed forces be young and in sufficient good condition to cope with the rigours of Service life. We think that the grant of pension should be regulated as to enable Servicemen to earn full pensions at a relatively younger age compared to civilians. Further, the length of service beyond a point should not be allowed to influence pension rates, as that would induce these personnel to stay on in service in order to earn higher pensions even after they have ceased to be useful. We accept the need for providing an element of compensation in the pension rates for early retirement in the Service interest and we feel that this should be done in as explicit a manner possible. In formulating our recommendations with regard to the non-effective benefits, we have not considered it necessary to suggest changes in such matters as the age of retirement, the period of tenure prescribed for senior ranks, the periods of qualifying service for pension, and certain other conditions attaching to the grant of these benefits (emphasis supplied)…….

Para 13.        After much deliberation, we have reached the conclusion that the most appropriate method of providing a compensatory element in pension rates would be to add a certain number of years of service to the period of qualifying service prescribed for earning full pension for the various ranks and applying for each year of service the rate of 1/80 of the maximum pay fixed for that rank. In the context of our conclusion that the standard rate system for the pension of Service officers should be continues, the weightage of additional years cannot be added to the length of service actually rendered but it has to be added to the minimum period prescribed for earning pension of the rank. Our calculations show that the two benefits in combination, viz., (a) taking the maximum of pay of the rank and (b) adding a period of 5 years, subject to the total not exceeding 33 years, would provide a reasonable degree of compensation. This approach can be adopted only for officers retiring in the rank of Brigadier or below. Further, in the case of Lt Colonel, we have found it necessary to give additional weightage in order to maintain comparability in the order of increase proposed over the existing pension rates in the Armed Forces and on the civil side. Thus, we have added an extra year for officers in the rank of Major and two years for officers in the rank of Captain or below. It is to be noted, however, that the chances of a Service officer retiring below the rank of major on a normal pension are remote and these rates have relevance mainly for determining the amounts of disability and invalid pensions. For senior officers, the pension will have to be determined on the basis of reasonable differential because in their case the pay of the rank exceeds the maximum of the emoluments reckoned for pensions on the civil side (emphasis supplied).   

           

Para 14.        In accordance with the above principles, we recommend the following standard rates of pension for Service officers after provision of the DCR Gratuity……. (emphasis supplied).

10.      The 4^th CPC recommended that pension should be 50% of the salary (last drawn) for Civilian and Armed Forces pensioners in consonance with an Act of Parliament for  salary and pension of Judges of the Supreme Court and High Courts when it amended the High Court Judges Salaries and Conditions of Service Act, 1954 and the Supreme Court Judges Salaries and Conditions of Service Act, 1958 in 1986. The following are extracts from Part II of the 4^th CPC Report: -

Chapter 5, Para 5.19: - The existing pay slabs in the pension formula are related to the pre-revised pay structure. These would need modification in the light of the revised pay structure recommended by us in Part I of the report. The Parliament has in a recent enactment, namely the High Court and Supreme Court Judges (Conditions of Service) Amendment Act, 1986 fixed a pension of Rs 4500/- per mensem for Judges of the Supreme Court on salary of Rs 9000/- per mensem and a pension of Rs 4000/- for judges of the High Court on salary of Rs 8000/- per mensem. The pension thus payable works out to 50 per cent of the salary. Keeping this in view and to simplify and rationalise matters, we recommend that pension may be calculated at 50 per cent of pay for all categories of Central Government employees.  

Chapter 13.10. The Services Headquarters have suggested that the quantum of pension for each rank should be calculated at a flat rate of 50 per cent of the maximum pay (including rank pay). We have recommended improved pay scales for armed forces personnel in Part I of our report. The time span of many of the scales for personnel below officer rank has been further improved by government at the time of implementation of our recommendations. We have recommended in chapter 5 that pension which confers a long term benefit should be related to basic pay only and that instead of the slab system, it should be calculated at 50 per cent of pay drawn during the last ten months of service. We recommend that for armed forces personnel also pension should be worked out on a similar basis with rank pay added to basic pay.  

            We have recommended ceiling of Rs 4500/- per mensem on basic pension in Chapter 5. This will apply to armed forces personnel also (emphasis supplied).

11.      The K P Singh Deo chaired Expert Committee on problems of Ex-Servicemen was constituted on 10^th March 1984 (source: pib.nic.in/newsite/PrintRelease.aspx?relid=133747). The Action Taken Report is in Chapter 14 of Part II of the 4^th CPC Report. It referred the following recommendations to the 4^th CPC: -

VI (A)	RECOMMENDATIONS UNDER CONSIDERATION; DECISION ON WHICH WILL BE TAKEN AFTER RECEIPT OF THE REPORT OF THE FOURTH PAY COMMISSION
1	15.37	Rank-for-rank pension and grant of increased pension whenever pensions are revised
2	15.38	Appointing a permanent standing committee for inter-relating the cost of living index to the pension
3	15.39	Restoration of commuted value of pension

 Please read Part II, Chapter 13, Para 13.6 onwards for more details.

SUBMISSION TO KOSHYARI COMMITTEE – Part II

12.      The Army Representative continued his submission (Para 6.2.): -

With the conversion of running pay band under Sixth Central Pay Commission, a large number of ranks were grouped and one running pay band was made and the pensioners were given the benefits of the lowest of a pay band, which means the pension of a retired Lieutenant Colonel and the pension of a retired Major General was fixed at Rs 37400 in PB-4. He further added that if the previous regime was continuing, then pensions would have been fixed at the lowest of the pay scales on which they were retiring. Thus, the disparity has aggravated after the implementation of the Sixth Central Pay Commission.

The Factual Position

13.      Vide SAI 2/S/2008, Annexure C, the starting Pay In Pay Band for ranks of Lt Col  was fixed as Rs 37400, Rs 40890 for Col, Rs 43390 for Brig and Rs 44700 for Maj Gen (who would get a notional MSP on promotion from Brig). Therefore, their starting PIPB and pension would not be the same. 

14.      Subsequently it was modified by SAI 3/S/2008, Annexure I as Rs 38530 for Lt Col, Rs 40890 for Col, Rs 43390 for Brig and Rs 44700 for Maj Gen. Portions of the 6^th CPC, Chapter 5 are reproduced below for ready reference.

(a)       Para 5.1.32 of 6^th CPC Report……. Consequently, the Commission does not recommend any change in the present rates of pension which is payable at 50% of emoluments ……….

(b)       Para 5.1.56 of 6^th CPC Report: - Retiring Pension for Commissioned Officers. Pension of Commissioned Officers is fixed on the basis of average emoluments drawn during last 10 months. Pension is paid at the rate of 50% of the average emoluments. …... The Commission has recommended payment of pension at the rate of 50% of the last pay drawn or the average emoluments, whichever is higher, irrespective of the number of qualifying years of service completed (subject to completion of 20 years of qualifying service). All reference to full pension being payable only on completion of 33 years of qualifying service are proposed to be removed. No justification, therefore, remains for allowing any weightage. Further, in the scheme of running pay bands and grade pay, the pension cannot be paid at the maximum pay attached to the post. The Commission recommends accordingly (emphasis supplied).

15.      MoD letter No. 17(4)/2008(2)/D(Pen/Pol) dated 12^th November 2008 wherein in Para 3 it defines Reckonable emoluments as Pay in the Pay Band plus Grade Pay plus Military Service Pay (and Non-Practicing allowance, if any) last drawn for calculating pension (emphasis supplied). The final PIPB of Lt Col to Maj Gen would be Rs 67000 but adding Grade Pay to Lt Col/Col/Brigh of Rs 8000/8700/8900 and MSP, officers of the ranks of Col and Brig would attain total emoluments of Rs 81700 and Rs 81900 respectively (as has actually happened in about 200 cases) whereas the Maj Gen would peak at Rs 77000! 

SUBMISSION TO KOSHYARI COMMITTEE – PART III

16.      At Para 6.4 the Army representative further submitted that there is administrative difficulty on the part of the Ministry that pensioners cannot be given increment every year. So, perpetually they will never be at par with current retirees. As a way out, he suggested fixing a period of five years or every Pay Commission to Pay Commission, for bringing all pensioners at par. He suggested a similar exercise for the family pensioners also and

17.      At Para 6.5 the representative of the Air Force submitted that to bridge this gap the suggestion regarding fixation of pay in five-year period or Pay Commission to Pay Commission was a good one and informed the Committee that the long pending issue may be sorted out this way.

18.      Wouldn't implementing recommendations of every Pay Commission to Commission, when the pension amount is enhanced, meet the definition of “…any future enhancement be automatically passed on to the past pensioners. This implies bridging the gap between the rate of pension of the current pensioners and the past pensioners and also future enhancements in the rate of pensions to be automatically passed on to past pensioners”? Isn't an annual equalisation (obviously an increase) a sort of increment because an officer of a particular rank with a particular number of years of service will get the same amount as pay and 50% of that as pension whether he retires in 2013 or 2015? And the future enhancement only becomes due when recommendations of the next Pay Commission are implemented? 

19.      This argument is better explained by a Bench of 3 Learned Judges of the honourable Andhra High Court in Principal Controller of Accounts & another Vs C Subba Rao & Another delivered on 27^th January 2005 (five years before the Koshyari Committee Report!). Relevant extract is as follows: -

52. In State of Punjab v. J.L. Gupta, (2000) 3 SCC 736, the respondents had retired on 31.3.1985 and their pensionary benefits were calculated as per the Rules in force at the time of their retirement. On 9.7.1985, Government of Punjab issued a notification ordering that the dearness allowance and ad hoc dearness allowance sanctioned up to Consumer Price Level Index No. 568 will be treated as dearness pay for the purpose of calculating pension and gratuity in respect of employees retired on or after 31.3.1985. The respondents were not given the benefit. They filed the writ petition in Punjab and Haryana High Court. The High Court allowed the writ petition directing the State of Punjab to pay all the dues. The Supreme Court relying on its earlier decision in State of Punjab v. Boota Singh, , held that the respondents are not entitled to claim benefits, which became available at a later date. Applying the same, it must be held that Government servant who retires from service would not be entitled to any benefits except the pension according to the Rules (emphasis supplied).

53. In Malakondaiah case (supra), the respondent employees moved Central Administrative Tribunal, Hyderabad Bench, for a direction to Principal Accountant General (Audit-I), Andhra Pradesh, to sanction annual increment for the year on the last day on which they retired in accordance with Rule 5(2) of the Pension Rules and whose pay was regulated under proviso to Note-1 below Rule 34 of the Pension Rules. The Tribunal following its earlier judgment allowed the O.As. The Union of India and others filed writ petitions before this Court. The two writ petitions were heard by a Division Bench. It was contended by Union of India that when an employee retires on the last day on which increment fell due, such employee is not entitled for increment because he ceased to be in service. Reliance was placed on Rule 33 of the Pension Rules and Article 151 of CS Regulations. The Division Bench repelled the said contention with the following observations: The fact that the emoluments of a Government servant have to be taken as the basic pay, which he was receiving immediately before his retirement, is not at all in controversy. Similarly, the proposition that an increment accrues from the date following that on which it is earned is also not in dispute. Increment in pay is a condition of service. In a way, it is a reward for the unblemished service rendered by an employee, which gets transformed into a right. Once an employee renders the service for the period, which takes with it an increment, the same cannot be denied to him/her. It is not in dispute that both the respondents rendered unblemished service for one year before the respective dates of their retirements. The periodicity of increment in the service is one year. On account of rendering the unblemished service, they became entitled for increment in their emoluments. ...The only ground on which the respondents are denied the increment is they were not in service to receive or to be paid the same. Strictly speaking, such a hyper-technical plea cannot be accepted. As observed earlier, with the completion of the year's service, an employee becomes entitled for increment, which is otherwise not withheld. After completion of the one-year service, the right accrues and what remains thereafter is only its enforcement in the form of payment. Therefore, the benefit of the year-long service cannot be denied on the plea that the employee ceased to be in service on the day on which he was to have been paid the increment. There is no rule, which stipulates that an employee must continue in service for being extended the benefit for the service already rendered by him.

           

54. In support of the above observations, the Division Bench also placed reliance on Banerjee case (supra). We are afraid, the Division Bench was not correct in coming to the conclusion that being a reward for unblemished past service, Government servant retiring on the last day of the month would also be entitled for increment even after such increment is due after retirement. We have already made reference to all Rules governing the situation. There is no warrant to come to such conclusion. Increment is given (See Article 43 of CS Regulations) as a periodical rise to a Government employee for the good behaviour in the service. Such increment is possible only when the appointment is "Progressive Appointment" and it is not a universal rule. Further, as per Rule 14 of the Pension Rules, a person is entitled for pay, increment and other allowances only when he is entitled to receive pay from out of Consolidated Fund of India and continues to be in Government service. A person who retires on the last working day would not be entitled for any increment falling due on the next day and payable next day thereafter (See Article 151 of CS Regulations), because he would not answer the tests in these Rules. Reliance placed on Banerjee case (supra) is also in our considered opinion not correct because, as observed by us, Banerjee case (supra) does not deal with increment, but deals with enhancement of DA by the Central Government to pensioners. Therefore, we are not able to accept the view taken by the Division Bench. We accordingly overrule the judgment in Malakondaiah case (supra) (emphasis supplied).

SUBMISSION TO KOSHYARI COMMITTEE – PART IV

20.      It is stated in the Report at Para 9 (v) that ‘The pension of Armed Forces of United States of America was quoted as precedent where they get 15 to 20 percent higher pension compared to their civilian employees which is known as hundred per cent neutralisation of pay and pension of the armed forces.’

21.      Federal Employees and Veterans  of USA

(a)       Pay tables of US Govt’s (General) Schedule Civilian Employees for 2011  https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2011/general-schedule/gs.pdf

(b)     Federal Benefits for Veterans - Veterans Affairs, USA https://www.va.gov/opa/publications/benefits_book/federal_benefits.pdf; https://www.benefits.va.gov/PENSION/rates_veteran_pen11.asp

(c)       Information on Pension for US Govt Civilians is available at

https://www.opm.gov/retirement-services/fers-information/computation/

and

https://www.opm.gov/retirement-services/publications-forms/pamphlets/ri90-1.pdf

22.      A Few Extracts

(a)       Federal Employees Retirement System (FERS) Information Computation

Your basic annuity is computed based on your length of service and “high-3” average salary. To determine your length of service for computation, add all your periods of creditable service, then eliminate any fractional part of a month from the total.

(b)       High-3 Average Salary

Your “high-3” average pay is the highest average basic pay you earned during any 3 consecutive years of service. These three years are usually your final three years of service, but can be an earlier period, if your basic pay was higher during that period. Your basic pay is the basic salary you earn for your position. It includes increases to your salary for which retirement deductions are withheld, such as shift rates. It does not include payments for overtime, bonuses, etc. (If your total service was less than 3 years, your average salary was figured by averaging your basic pay during all of your periods of creditable Federal service).

(c)       Computation for Non-Disability Retirements

FERS Basic Annuity Formula
Age	Formula
Under Age 62 at Separation for Retirement, OR Age 62 or Older With Less Than 20 Years of Service	1 percent of your high-3 average salary for each year of service
Age 62 or Older at Separation With 20 or More Years of Service	1.1 percent of your high-3 average salary for each year of service

From https://www.investopedia.com/articles/personal-finance/062513/what-federal-employees-retirement-system-fers-and-how-does-it-work.asp

This calculation only takes into account your basic salary. It does not include overtime, bonuses or other extra payments. Your years of credible service are reported on the SF-50 form you receive at least once per year. Then, the agency you work for adds a 1% multiplier to your High-3. However, employees who are 62 or older with at least 20 years of service will receive a multiplier of 1.1%. 

The formula for the basic benefit plan is: High-3 Salary x Years of Service x Pension Multiplier = Annual Pension Benefit. If you worked for 25 years and made $75,000 per year, your monthly payment would be around $1,560, according to the formula.

(d)       (USA) Veterans Pension

(i)        How to Calculate Veterans Pension

https://www.benefits.va.gov/pension/pencalc.asp

Your yearly family income must be less than the amount set by Congress to qualify for the Veterans Pension benefit. If eligible, your pension benefit is the difference between your “countable” income and the annual pension limit set by Congress. VA generally pays this difference in 12 equal monthly payments.

(ii)       Income and Net worth Limitations

Countable income includes income from most sources as well as from any eligible dependents. It generally includes earnings, disability and retirement payments, interest and dividend payments from annuities, and net income from farming or a business. Some expenses, such as unreimbursed medical expenses, may reduce your countable income.

Net worth includes assets such as bank accounts, stocks, bonds, mutual funds, annuities, and any property other than your residence and a reasonable lot area. You should report all of your net worth. VA will determine whether your assets are of a sufficiently large amount that you could live off of them for a reasonable period of time.

Your pension is calculated to be an amount equal to the difference between your countable family income and the annual pension limit ($ 12, 256 for 2011) set by Congress.

(e)       From Veterans Pension Rate Table – Effective 12/1/11

Source: https://www.benefits.va.gov/PENSION/rates_veteran_pen11.asp

Date of Cost-of-Living Increase: 12-01-2011
Increase Factor: 3.6%
Standard Medicare Deduction: $99.90

Maximum (emphasis supplied) Annual Pension Rate (MAPR) Category	Amount
If you are a veteran...	Your yearly income must be less than...
Without Spouse or Child	$12,256
	To be deducted, medical expenses must exceed 5% of MAPR,  or,  $ 612
With One Dependent	$16,051
	To be deducted, medical expenses must exceed 5% of MAPR,  or,  $ 802
Housebound Without Dependents	$14,978
Housebound With One Dependent	$18,773
A&A Without Dependents	$20,447
A&A With One Dependent	$24,239
Two Vets Married to Each Other	$16,051
Add for Early War Veteran (Mexican Border Period or WW1) to any category above	$2,783
Add for Each Additional Child to any category above	$2,093

Note: Aid & Attendance (A&A)

The Aid & Attendance (A&A) increased monthly pension amount may be added to your monthly pension amount if you meet one of the following conditions:

• You require the aid of another person in order to perform personal functions required in everyday living, such as bathing, feeding, dressing, attending to the wants of nature, adjusting prosthetic devices, or protecting yourself from the hazards of your daily environment
• You are bedridden, in that your disability or disabilities requires that you remain in bed apart from any prescribed course of convalescence or treatment
• You are a patient in a nursing home due to mental or physical incapacity
• Your eyesight is limited to a corrected 5/200 visual acuity or less in both eyes; or concentric contraction of the visual field to 5 degrees or less

Housebound

This increased monthly pension amount may be added to your monthly pension amount when you are substantially confined to your immediate premises because of permanent disability.

(f)        How To Read Rates of 2017

Source https://www.benefits.va.gov/PENSION/rates.asp

The Improved Pension Rate Tables have two divisions: (1) the Maximum Annual Pension Rate (MAPR) Category and (2) the Amount.

The MAPR is the maximum amount of pension payable to a veteran, surviving spouse or child. MAPR fluctuates due to the following categories:

1.     Is the veteran or surviving spouse without dependents?

2.     How many dependents beyond one, does the veteran or surviving spouse have?

3.     Is the veteran or surviving spouse in need of housebound benefits?

4.     Is the veteran or surviving spouse in need of aid & attendance benefits?

5.     Did the veteran serve during the Mexican Border Period or World War I (Early War Veteran)?

6.     Are the veterans married to each other?

Here are some examples of how these categories interact:

Example 1	MAPR	Explanation
Joe is a veteran of WW II. He has a spouse. He is entitled to aid & attendance.	$23,396	Go to the A&A With One Dependent MAPR row.
If Joe has deductible medical expenses, he can deduct any that exceed:	$774	Go to the With One Dependent MAPR row and look at the To be deducted row beneath it.

Example 2	MAPR	Explanation
Mary is a veteran of the Vietnam era. She has a spouse and one child. She is entitled to aid & attendance.	$23,396 + 2,020 $25,416	Go to the A&A With One Dependent MAPR row and add from the Each Additional Child row.
If she has deductible medical expenses, she can deduct any that exceed:	$774	Go to the With One Dependent MAPR row and look at the To be deducted row beneath it.

The MAPR is reduced for each dollar of income that the veteran, surviving spouse, child, or their families have (emphasis supplied).

Example 1
So if Joe and his spouse have $3,000 of income and they have no deductible expenses, you subtract the income from the MAPR. Joe will receive $20,096 for the year, or $1,675 each month of that year.	$23,396 - 3,000 $20,096
Example 2
If Mary and her spouse have $10,350 of income and they have deductible expenses of $3,588, you subtract the deductible amount from the medical expenses first. Then subtract the expenses from the income. Then subtract the income from the MAPR. Mary will receive $17,880 for the year, or $1,490 each month of that year.	$3,588 - $774 $2,814 $10,350 - 2,814 $7,536 $25,416 -$7,536 $17,880

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