Are spouses’ pensions and retirement accounts included in VA net worth calculations?
Executive summary
The VA counts both assets and "income for VA purposes" (IVAP) when computing net worth for pension and survivors’ pension; net worth is defined as assets plus annual income and includes a claimant’s and dependent’s resources [1] [2]. The bright‑line net worth limit for Dec. 1, 2024–Nov. 30, 2025 is $159,240, and VA applies the same net‑worth rules to veterans, survivors and dependents when evaluating eligibility [3] [4].
1. What the rule actually says — assets plus income
VA regulations define net worth as the sum of a claimant’s or beneficiary’s assets and annual income; the agency tells applicants to report all of their net worth and explicitly includes income from most sources when calculating countable income for pension entitlement [1] [5]. The VA’s public FAQs repeat that the net worth calculation “includes your and your dependent’s assets and income for VA purposes,” tying the statutory definition to operational guidance [2].
2. Spouses’ pensions and retirement accounts: how they fit into IVAP
The VA’s approach to income for pension purposes (IVAP) broadly includes “earnings, disability and retirement payments” and other regular income streams; benefits such as retirement pay and pensions are therefore part of the income side of the net‑worth equation unless an explicit exclusion applies [1]. Available sources explicitly list retirement payments among countable income components for VA pension calculations [1]. Sources do not provide a line‑by‑line list of every type of spouse retirement account (e.g., IRAs, 401(k) balances) but say to report assets and income broadly [1] [2].
3. Assets vs. income: why an account can affect net worth twice
VA net worth is assets + annual income; that means a retirement account can matter in two ways. First, the account’s cash value is an asset that may be counted toward the bright‑line net‑worth limit. Second, distributions from that account (pensions, annuities, withdrawals) are likely counted as IVAP when calculating annual income used in the sum [1]. The VA’s guidance warns applicants to report both assets and income and provides examples and deductible medical expenses that can reduce IVAP [5] [2].
4. What’s excluded or treated differently
The VA exempts certain items from asset counting — for example, the primary home, household goods, and one automobile are typically excluded from the asset calculation [6]. The regulations also permit the subtraction of applicable deductible expenses, including prospective medical costs, when calculating annual income for pension purposes [5]. However, the provided materials do not list every exemption for spouse retirement accounts or say that spouse pensions are categorically excluded; they simply instruct applicants to include dependents’ assets and income [2] [1].
5. Bright‑line limit and look‑back: implications for planning
Since October 2018 the VA established a bright‑line net‑worth limit and a look‑back rule to discourage transfers for less than fair market value; transfers that would have pushed net worth above the limit during the look‑back may trigger penalty periods [3] [4]. The bright‑line figure is adjusted periodically (examples in sources show $159,240 for Dec. 1, 2024–Nov. 30, 2025 and other annual adjustments), meaning planning needs to account for current limits [3] [2].
6. Different interpretations and practitioner guidance
Consumer‑facing guides and VA‑advice sites underline the same core: include spouse assets and retirement income in the calculation and consider deductible medical expenses to reduce IVAP [7] [8]. Some private planning sites offer strategies and note workarounds, but the authoritative sources remain the VA rules and CFR text — and those make plainly clear the definition of net worth as assets plus annual income [5] [2].
7. What the available sources do not say
The current set of sources does not provide a definitive checklist stating exactly which spouse retirement account types (traditional IRA, Roth IRA, 401(k) plan balances held but not distributed) are always counted as assets or when rollover rules change treatment. The sources also do not specify valuation methodology for partially accessible retirement accounts in every circumstance — they simply require reporting of assets and income [1] [2].
8. Practical takeaway — what applicants should do
Report both spouses’ assets and retirement/pension income when applying; expect retirement pay and pension distributions to be treated as IVAP and retirement account balances to be reportable assets unless an exemption applies. Use deductible medical expenses to lower IVAP where applicable and consult the VA FAQs and 38 C.F.R. § 3.274 for regulatory detail [2] [5]. If you need definitive rulings about a particular account type or planned transfer, the sources point to the VA rules and look‑back penalty guidance as the governing authorities [3] [4].