Appeal Decision (2022): If You are Self-Employed, Your Legitimate Business Expenses Should be Deducted from Your Countable Income for the Purposes of Calculating Your Chapter 115 benefits.

The Massachusetts Department of Veteran Services (DVS) has ruled that business expenses for self-employed veterans are deductible from income when calculating eligibility for Chapter 115 benefits. 

Here is the background: Chapter 115 provides money for food, housing, clothing, and medical care to eligible veterans and their families, including survivors. This monthly benefit is essential for low-income veterans across the Commonwealth. And now self-employed veterans will potentially have more pathways to eligibility and higher benefit amounts. 

The DVS decision comes after a self-employed veteran approached his local Veteran’s Service Officer (VSO) about his business expenses. The veteran owned a small landscaping business. This business generated limited income, and the business expenses of gas, mileage, and equipment were necessary for the veteran to maintain self-employment. The veteran could not travel to customers’ residences without a truck and gas. Nor could the veteran run a landscaping business without proper tools and maintenance.

However, the VSO improperly calculated his Chapter 115 benefits because of a misinterpretation of the law. As a result, the VSO and DVS counted the veteran’s gross income even though some of that money was spent keeping the business itself going. The veteran felt that this was not right, and the Legal Services Center agreed. Legal Services Center advocates filed an appeal with DVS. Our legal arguments and the veteran’s evidence persuaded DVS that under 108 C.M.R.§ 7.02., legitimate business expenses should be deducted from a veteran’s gross income when calculating Chapter 115 eligibility.

With this ruling, self-employed veterans’ legitimate business expenses are deductible from income when determining whether you qualify for Chapter 115 benefits. 

A copy of the decision can be found below. The veteran was represented in this appeal by the Veterans Legal Clinic, WilmerHale Legal Services Center, Harvard Law School.

What counts as a legitimate business expense will vary from business to business, of course. So how might this apply to you? 

Let’s take a look at what a legitimate business expense could be.

A legitimate business expense is one that is necessary for a veteran to be self-employed and maintain the veteran’s business. The business cannot run without this expense. 

Here are some potential examples of legitimate business expenses for self-employment: If a vet hauls materials for a living, the business cannot function without a truck or expenses related to a truck, such as gas, mileage, and upkeep. If a veteran cuts hair for a living, the business cannot function without haircare tools, such as scissors, clippers, combs, hairdryers, curling irons, or haircare products. These are things that a self-employed business owner pays for with the money they earn from their business. 

Do you think you have a legitimate business expense that is deductible from your income? If so, here is what you can do:

1. Consider what expenses you need to run your business. 
2. Compile documentation of all expenses. These can include receipts, customer records, calendars, and many other kinds of information. In the case we described above, one of the reasons that the veteran won his appeal was that he kept thorough records of expenses related to his landscaping business. 
3. Bring this documentation to your local VSO and ask your VSO to exclude your business expenses from your countable income to calculate your eligibility for Chapter 115 benefits. 
4. Your VSO will make the initial decision whether to deduct all, some, or none of your business expenses from your countable income. If you believe that your VSO made the wrong decision about your business expenses, you have the right to appeal that decision. The appeal period is 21 days. For more information about how to appeal and appeal deadlines, please see our Chapter 115 Benefits Self-Help Guide.

As a reminder, Chapter 115 benefits aren’t just for veterans. They are for family members and survivors, too. Dependents of veterans and survivors of veterans can apply for Chapter 115 benefits and be eligible all on their own. The information above about deducting legitimate business expenses also applies to self-employed dependents and survivors. For more information about who can apply for and receive Chapter 115 benefits, please review our Chapter 115 Benefits Self-Help Guide.

To apply for legal assistance with an appeal to challenge a decision denying, terminating, reducing, or improperly calculating Chapter 115 benefits, please contact the Veterans Legal Clinic intake line at 617-390-2525 or by email at veteranslegalclinic@law.harvard.edu. We will review your case and let you know what, if any, assistance we may be able to provide. Please remember that contacting our office does not count as filing an appeal. And make sure that you are mindful of the appeal deadline and the need to file an appeal. 

The Veterans Legal Clinic is committed to helping veterans and their families access the resources they have earned through their service. Veterans can learn more about whether they may be eligible for Chapter 115 benefits by using our online calculator and reviewing our Chapter 115 Benefits Self-Help Guide.

This post was written by Hailey Sweeney, a summer 2022 intern in the Veterans Legal Clinic and a rising senior at Wellesley College.