Editorial Note on Part 3
Editorial Note: Nomenclature changes to part 3 appear at 61 FR 7216, Feb. 27, 1996; 62 FR 35970, July 3, 1997; 62 FR 47532, Sept. 9, 1997; and 67 FR 46868, July 17, 2002.

§ 3.23 Improved pension rates—Veterans and surviving spouses. ( a ) *Maximum annual rates of improved pension.* The maximum annual rates of improved pension for the following categories of beneficiaries shall be the amounts specified in 38 U.S.C. 1521 and 1542, as increased from time to time under 38 U.S.C. 5312. Each time there is an increase under 38 U.S.C. 5312, the actual rates will be published in the “Notices” section of the Federal Register. ( 1 ) Veterans who are permanently and totally disabled. (Authority: 38 U.S.C. 1521(b) or (c))
( 2 ) Veterans in need of aid and attendance. (Authority: 38 U.S.C. 1521(d))
( 3 ) Veterans who are housebound. (Authority: 38 U.S.C. 1521(e))
( 4 ) Two veterans married to one another; combined rates. (Authority: 38 U.S.C. 1521(f))
( 5 ) Surviving spouse alone or with a child or children of the deceased veteran in custody of the surviving spouse. (Authority: 38 U.S.C. 1541(b) or (c))
( 6 ) Surviving spouses in need of aid and attendance. (Authority: 38 U.S.C. 1541(d))
( 7 ) Surviving spouses who are housebound. (Authority: 38 U.S.C. 1541(e))
( b ) *Reduction for income.* The maximum rates of improved pension in paragraph (a) of this section shall be reduced by the amount of the countable annual income of the veteran or surviving spouse. (Authority: 38 U.S.C. 1521, 1541)
( c ) *Mexican border period and World War I veterans.* The applicable maximum annual rate payable to a Mexican border period or World War I veteran under this section shall be increased by the amount specified in 38 U.S.C. 1521(g), as increased from time to time under 38 U.S.C 5312. Each time there is an increase under 38 U.S.C. 5312, the actual rate will be published in the “Notices” section of the Federal Register. (Authority: 38 U.S.C. 1521(g))
( d ) *Definitions of terms used in this section* — ( 1 ) *Dependent.* A veteran's spouse or child. A veteran's spouse who resides apart from the veteran and is estranged from the veteran may not be considered the veteran's dependent unless the spouse receives reasonable support contributions from the veteran. (Note that under § 3.60 a veteran and spouse who reside apart are considered to be living together unless they are estranged.) A child of a veteran not in custody of the veteran and to whose support the veteran is not reasonably contributing, may not be considered the veteran's dependent. (Authority: 38 U.S.C. 1521(b))
( 2 ) *In need of aid and attendance.* As defined in § 3.351(b).
( 3 ) *Housebound.* As defined in § 3.351(d)(2), (f). This term also includes a veteran who has a disability or disabilities evaluated as 60 percent or more disabling in addition to a permanent and totally disabling condition. See § 3.351(d)(1).
( 4 ) *Veteran's annual income.* This term includes the veteran's annual income, the annual income of the veteran's dependent spouse, and the annual income of each child of the veteran (other than a child for whom increased pension is not payable under 38 U.S.C. 1522(b)) in the veteran's custody or to whose support the veteran is reasonably contributing (to the extent such child's income is reasonably available to or for the veteran, unless in the judgment of the Department of Veterans Affairs to do so would work a hardship on the veteran.) There is a rebuttable presumption that all of such a child's income is reasonably available to or for the veteran. (Authority: 38 U.S.C. 1521 (c), (h))
( 5 ) *Surviving spouse's annual income.* This term includes the surviving spouse's annual income and the annual income of each child of the veteran (other than a child for whom increased pension is not payable under 38 U.S.C. 1543(a)(2)) in the custody of the surviving spouse to the extent that such child's income is reasonably available to or for the surviving spouse, unless in the judgment of the Department of Veterans Affairs to do so would work a hardship on the surviving spouse. There is a rebuttable presumption that all of such a child's income is available to or for the surviving spouse. (Authority: 38 U.S.C. 1541(c), (g))
( 6 ) *Reasonable availability and hardship.* For the purposes of paragraphs (d)(4) and (d)(5) of this section, a child's income shall be considered “reasonably available” when it can be readily applied to meet the veteran's or surviving spouse's expenses necessary for reasonable family maintenance, and “hardship” shall be held to exist when annual expenses necessary for reasonable family maintenance exceed the sum of countable annual income plus VA pension entitlement. *Expenses necessary for reasonable family maintenance* include expenses for basic necessities (such as food, clothing, shelter, etc.) and other expenses, determined on a case-by-case basis, which are necessary to support a reasonable quality of life. (Authority: 38 U.S.C. 501)


Cross References:
Improved pension. See § 3.1(w). Child. See § 3.57(d). Definition of *living with.* See § 3.60. Exclusions from income. See § 3.272. [44 FR 45933, Aug. 6, 1979, as amended at 52 FR 34907, Sept. 14, 1987; 53 FR 23235, June 21, 1988]