VA "shall pay to each veteran of a period of war who meets the service requirements of this section . . . and who is permanently and totally disabled from non-service-connected disability not the result of the veteran's willful misconduct, pension at the rate prescribed by [statute]." 38 U.S.C. § 1521(a). The maximum annual rates for improved pension must be reduced by the amount of the veteran's countable annual income. 38 U.S.C. § 1521; 38 C.F.R. § 3.23(b); Springer v. West, 11 Vet. App. 38, 40 (1998). "Payments of any kind from any source shall be counted as income during the 12-month annualization period in which received unless specifically excluded under [section] 3.272." 38 C.F.R. § 3.271(a); 38 U.S.C. § 1503; see Martin v. Brown, 7 Vet. App. 196, 199 (1994) (stating "statute and VA regulations provide that 'annual income,' as defined by statute and applicable regulation, includes payments of any kind from any source, unless explicitly exempted by statute or regulation"); but see 38 C.F.R. § 3.272 (enumerating categories to "be excluded from countable income for the purpose of determining entitlement to improved pension").
Certain countable income is specifically excluded from this rule and as a result, a veteran's pension will not be reduced. 38 C.F.R. § 3.272. Social Security Administration (SSA) old age and survivor's insurance and disability insurance payments are considered income and must, therefore, be included. 38 C.F.R. §§ 3.262; 3.271(g); Burch v. Brown, 6 Vet. App. 512, 513 (1994). Benefits under noncontributory programs, such as old age assistance, aid to dependent children, and supplemental security income are treated as charitable donations. See 38 C.F.R. §§ 3.262(d), (f). Unreimbursed medical expenses paid within the 12-month annualization period are excluded from income to the extent that they are in excess of 5% of the maximum annual pension rate. 38 C.F.R. § 3.272(g)(1)(iii). Whether a claimant is entitled to VA pension benefits is a question of fact.
Pursuant to 38 U.S.C. § 1505, pension benefits administered by the Secretary shall not be paid to or for an individual who has been imprisoned in a Federal, State, or local penal institution as a result of conviction of a felony or misdemeanor for any part of the period beginning 61 days after such individual's imprisonment begins and ending when such individual's imprisonment ends. 38 U.S.C. § 1505(a); 38 C.F.R. § 3.666; see also Latham v. Brown, 4 Vet. App. 265 (1993).