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Veterans Compensation exclusion

Discussion in 'Other Residential Landlord & Tenant Issues' started by Dean Faucher, Aug 10, 2020.

  1. Dean Faucher

    Dean Faucher Law Topic Starter New Member

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    Jurisdiction:
    Hawaii
    This is the HUD Income Exclusion list. My rental manager says although I am a Veteran receiving Compensation as defined in paragraph (v) it pertains to Indians only.
    Does the OR prove otherwise?

    HUD Income Exclusions:
    (v) Compensation received by or on behalf of a veteran for service-connected disability, death, dependency, or indemnity compensation as provided by an amendment by the Indian Veterans Housing Opportunity Act of 2010 (Pub. L. 111-269; 25 U.S.C. 4103(9)) to the definition of income applicable to programs authorized under the NativeAmerican Housing Assistance and Self-Determination Act (NAHASDA) (25 U.S.C. 4101 et seq.) and administered by the Office of Native American Programs;
     
  2. PayrollHRGuy

    PayrollHRGuy Well-Known Member

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    I believe your rental manager is correct. But it is a poorly written statement on HUD's part. The primary logic I'm using is that almost all of the other exclusion on the list include the U.S.C. that defines the exclusion and the only codes in that paragraph are pertaining to Indians.
     
  3. Tax Counsel

    Tax Counsel Well-Known Member

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    It applies just to Native American veterans receiving benefits under the NAHASDA. That exception you quoted comes word for word from the exclusion that HUD announced in the Federal Register in 2012 after the passage of the NAHASDA in 2010. That exclusion became item xxi in the list of HUD income exclusions under 25 CFR 5.609(c), which is the regulation that sets out what income is excluded when determining qualification for HUD subsidized housing benefits. In explaining this exception, HUD stated in that announcement:

    4. The Indian Veterans Housing Opportunity Act of 2010 (Pub. L. 111-269, approved October 10, 2010), amended the definition of income contained in the Native NAHASDA applicable to programs authorized under NAHASDA and administered by the Office of Native American Programs to exclude compensation received by or on behalf of a veteran for service-connected disability, death, dependency or indemnity compensation. The law provides:

    Paragraph (9) of section 4 of the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4103(9)) is amended by adding at the end the following new subparagraph: “(C) Any amounts received by any member of the family as disability compensation under chapter 11 of title 38, United States Code, or dependency and indemnity compensation under chapter 13 of such title.”

    This exclusion only applies to the programs authorized under NAHASDA. The effective date of this provision was October 12, 2010. This exclusion is added to the list as paragraph (xxi).
    As the explanation makes clear, the exception relates the amendment to the NAHASDA, which is a law that, among other things, helps to provide housing benefits to Native Americans. You'll note that the explanation specifically states that the "exclusion only applies to the programs authorized under NAHASDA." So unless you are receiving benefits authorized under that Act this exclusion does not apply to you.
     
  4. Dean Faucher

    Dean Faucher Law Topic Starter New Member

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    Thank you. I just have a problem where HUD defines me as a Pension under incomes. My compensation is for Loss of my body parts. It is well defined I do not receive a Pension. I do not not receive Veteran's Disability. How do they enter it as a Pension? My tax form does not show a pension. The manager says Disability Compensation & Va Pension are one in the same.
    How can they add a word into Para 4 that is not there or interpret - Veteran Compensation as a Pension when it isn't listed.
     
  5. Dean Faucher

    Dean Faucher Law Topic Starter New Member

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    (4) The full amount of periodic amounts received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump-sum amount or prospective monthly amounts for the delayed start of a **periodic amount (e.g., Black Lung Sick benefits, Veterans Disability, Dependent Indemnity Compensation, payments to the widow of a serviceman killed in action). See paragraph (13) under Income Exclusions for an exception to this
     
  6. Dean Faucher

    Dean Faucher Law Topic Starter New Member

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    Is VA compensation a pension?
    The simplest explanation is that VA compensation is a benefit paid on the basis of the kind and severity of a disability that happened as a result of your active duty in military service. VA pension is a benefit paid on the basis of a disability that was not a result of active service in the military, or because of age.

    Are VA disability compensation and VA pension the same?
    Published 05/08/2006 06:32 PM | Updated 11/11/2019 12:27 PM
    What is the difference between VA disability compensation and VA pension?
    VA compensation and a VA pension are not the same thing. The simplest explanation is that VA compensation is a benefit paid on the basis of the kind and severity of a disability that happened as a result of your active duty in military service. VA pension is a benefit paid on the basis of a disability that was not a result of active service in the military, or because of age. Pension is also based on income.
     
  7. army judge

    army judge Super Moderator

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    You might wish to seek guidance from one of the groups that offer assistance to veterans who are experiencing problems with a multitude of life's issues.
     
  8. adjusterjack

    adjusterjack Super Moderator

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    Dean, what is going on between you and your landlord that is giving rise to this issue? Is he saying you don't make enough money to live there? Something else?

    It might help to give us some perspective.
     
  9. Dean Faucher

    Dean Faucher Law Topic Starter New Member

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    Is VA disability compensation considered in lieu of earnings?
    Disability Compensation received from the VA aren't considered earned income, and aren't taxable benefits. The IRS applies this exclusion to benefits received for service in any country's armed forces
     
  10. army judge

    army judge Super Moderator

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    Disability benefits received from the VA should not be included in your gross income.

    Some of the payments which are considered disability benefits include: Disability compensation and pension payments for disabilities paid either to Veterans or their families, benefits under a dependent-care assistance program.

    Information for Veterans | Internal Revenue Service

    https://myarmybenefits.us.army.mil/...lity-or-Military-Retirement-Pensions?serv=122

    https://benefits.va.gov/BENEFITS/factsheets/serviceconnected/Compensation.pdf
     
  11. Tax Counsel

    Tax Counsel Well-Known Member

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    You are right that a pension and disability benefits are not exactly the same thing. But that's not the issue here. The issue is whether it is included as income when determining your benefits. You quoted from the income inclusion contained in HUD exhibit 5-1 as follows:

    (4) The full amount of periodic amounts received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits, and other similar types of periodic receipts, including a lump-sum amount or prospective monthly amounts for the delayed start of a **periodic amount (e.g., Black Lung Sick benefits, Veterans Disability, Dependent Indemnity Compensation, payments to the widow of a serviceman killed in action). See paragraph (13) under Income Exclusions for an exception to this paragraph;**

    (Underlining in original.) The first thing to note about this paragraph (4) is what HUD underlined: it applies to the periodic amounts received from the types of benefits listed. Periodic amounts are those that are paid on a periodic basis, e.g. every month, every year, or whatever. So a single lump sum payment would not be included as income under this paragraph (other than a lump sum that is a payment of delayed periodic payments).

    The second thing to note is that paragraph (4) does not apply to just pension income, though pensions are clearly included. As the paragraph expressly states disability benefits are included, too. So if you are receiving periodic (e.g. monthly, quarterly, yearly, etc) payments for your disability — the loss of body parts in your case — it would be included under paragraph (4) and you'd need to then find something that excludes the exact type of benefits you are receiving. Indeed, the paragraph expressly lists Veterans Disability as the sort of payments that are included in income. So while pensions and disability payments are not the same thing, paragraph (4) includes both periodic pension payments and disability payments, along with some other periodic payments like Social Security, retirement accounts, death benefits, etc., as included in income. It doesn't matter that they are not all quite the same thing. What matters is that they are all expressly listed as income.

    I agree with army judge that it might help you to get assistance from a group that assists Veterans with housing and other issues to help you sort this out.
     
  12. Tax Counsel

    Tax Counsel Well-Known Member

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    It is important to understand that your disability will be treated differently depending on the purpose that the disability matters. Your veteran's disability is not included in your gross income for federal income tax purposes. Congress chose to exclude it as income because it did not believe it was worthwhile to make you pay back to the government part of the benefit you are receiving.

    But here the issue is what income is considered when seeking HUD housing benefits. And for that the Congress made different choices about how to treat things. For example, Social Security benefits are included as income for the HUD benefits but some or all of that Social Security might not be included in gross income for federal income tax. (How much Social Security is included depends on how much other income you have.) So Social Security recipients may face the same problem you do: their benefits may not be taxed, but they will be taken into consideration when determining qualification for HUD assisted housing benefits.

    So, whether your disability counts as income depends on the situation — taxes, getting government assistance, applying for credit, child support — all those are different and whether your pension is included in income varies depending on the situation. You need to look at only the rules for the benefits you are seeking. Whether it is income for some other purpose will not matter. The only thing that matters is what the rules are for the particular program you are applying for.
     
  13. Dean Faucher

    Dean Faucher Law Topic Starter New Member

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    Thank you but the key to this is: HPHA picked VA Pension as my VA Income.
    There is a night and day difference from Veterans Compensation paid as Federal Compensation act in 1974 by Congress and disability benefits. You pay taxes on disability benefits but not Compensation.

    Anyway if you are right.
    How do they get away with altering my income on my Rental Application?
    They enter my income as VA Pension. It doesn't matter if pensions are not on my tax returns?
    It is not alegal Pension.

    HPHA letter to me " we can take from your VA Pension, disability compensation or disability benefits.
    I can easily prove why they can't pick the other two.
    Compensation does not fit into this equation as described in the HPHA p(4).
    What they say is mishmash. Why because they can't give me an answer why and how they officially changed a Federal Rental form declaring I have a VA Pension.
    Do you get the point. I follow P(4) def. Are they not required to have an explanation of where it says legally they can change a comp to pension?
     
  14. Dean Faucher

    Dean Faucher Law Topic Starter New Member

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    There is only two VA Income sources.
    1. Compensation
    2. Pension

    The Va allows only one. Compensation or Pension
    I have %100 Special Disabled Veterans Compensation ( Congress 1974)
    I do not receive a 1099R because I receive no income by law.

    Pension is what Veterans Disability converts to at 65. A 1099R is issued and it is taxed.
    Disability benefits from Social Security go to Retirement Funds at 65 too.
    HPHA had to chose VA Pension because the other two choices were not possible. Fact.

    So here we are. HPHA says I get VA Pension and convert my Compensation on paper. Does that mean I legally have a pension? If so who should send the illegal tax bill to?
     
  15. Dean Faucher

    Dean Faucher Law Topic Starter New Member

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    "whether your pension is included in income varies depending on the situation. You need to look at only the rules for the benefits you are seeking."
    Like I said. I do not have a pension!
    You need to read what I said like HPHA can't.
     
  16. Tax Counsel

    Tax Counsel Well-Known Member

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    You are getting disability benefits. The issue is how the disability benefits are treated. And under that paragraph (4) disability benefits are among those that are included as income. The disability benefits are NOT being included because they are a pension. So continuing to say your disability payments are not a pension isn't going to help you. The disability benefits are being included as income for the purpose of the housing benefits because the rule in paragraph (4) states that periodic disability payments are included. Just read the paragraph. It lists disability benefits right there in it. That's what is the problem for you here.

    And again, the fact that the disability payments are not included in income for income tax doesn't matter. The rules for housing benefits are different than the tax rules. As as I said before, and you quoted above, you have to look only at the rules for the particular benefits you are seeking. Those rules are different from the tax law.

    You can contact the Department of Housing and Urban Development (HUD) and ask it about whether you particular disability benefit is counted as income for that housing program. You can also ask organizations that help Veteran's out on housing issues. You might even be able to get answers from the Department of Veteran's Affairs (VA).
     
  17. Dean Faucher

    Dean Faucher Law Topic Starter New Member

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    I do not get disability benefits per VA language. Disability benefits change in the VA when you turn 65. Disability is converted to VA Pension and you receive a 1099R for tax purposes.
    I receive Compensation for loss of body parts. I do not get a 1099R because it is not considered income by the VA. In plain writing.

    The VA has only two disability benefits. VA Pension & Special Disabled Veterans Compensation.

    The VA issues only one. You can't have both. How can HPHA change the VA & IRS designation as a service connected Compensation during wartime for losses to a non service connected VA Pension?
     
  18. Zigner

    Zigner Well-Known Member

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    I'm assuming that your VA payments are based on a service-related injury. I'm sharing this because it explains that "VA compensation" is "VA disability compensation", so there is no distinction between the two because they are the same thing.

    Are VA disability compensation and VA pension the same?

    What is the difference between VA disability compensation and VA pension?
    VA compensation and a VA pension are not the same thing. The simplest explanation is that VA compensation is a benefit paid on the basis of the kind and severity of a disability that happened as a result of your active duty in military service. ...
     
  19. Tax Counsel

    Tax Counsel Well-Known Member

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    Which is a type of disability compensation, whether the VA uses those exact words to describe it or not.

    You do not get a Form 1099-R because your benefits are not taxable under the Internal Revenue Code (IRC). But again, the tax treatment of your benefits has nothing to do with this. What matters is how the benefits are treated for the HUD benefits. The tax rules and HUD rules do not treat everything exactly the same.
     
  20. Zigner

    Zigner Well-Known Member

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    They do use those words.
     

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