Changes to VA Pension Program Can Complicate Eligibility
Veterans Affairs provides long-term care benefits to some of the 20 million veterans in the U.S. To qualify, a veteran must have served for at least 90 days on active duty, with at least one day during war time.
However, new changes can affect the eligibility for Aid & Attendance, which is the program that helps vets with a disability not connected to service. This benefit can pay a little over $2,000 a month to defray the cost of an at-home attendant or an assisted living facility.
Net Worth Limitation
Aid & Attendance is means tested, meaning that people with too much income and/or assets cannot qualify for the benefit. In other words, it is for the truly needy.
Starting October 18, the VA will base the maximum net worth on the maximum Community Spouse Resource Allowance used by the Medicaid program. Currently, this limit is $123,600, which includes both the assets and income for each applicant. For example, an applicant might have an income of only $30,000. But if he has assets exceeding $200,000, then he will not qualify.
Not all assets count, so you should still meet with an experienced attorney to check. For example, a residence and up to two acres of property do not count for purposes of the means test.
Gifts will Receive Scrutiny
The VA will also look at any gifts or transfers in the three years before a veteran applies for Aid & Attendance benefits. If the gifts or transfers were for less than fair market value, then the applicant may be penalized. Fortunately, any gifts or transfers made before October 18, 2018 will not be looked at, so the new rule applies only going forward.
If an applicant is penalized, they will be ineligible for benefits for a certain length of time based on the value of the transfer. The maximum penalty period can be 60 months (5 years).
One way veterans have managed to qualify for Aid & Attendance in the past was to buy an annuity, which would reduce the amount of assets they have. However, the monthly income from the annuity will now be counted as income. Also, veterans can be penalized if the annuity cannot be liquidated. For this reason, buying an annuity to qualify for Aid & Attendance is probably no longer a good idea.
Another way veterans reduced assets and income was to transfer assets to an irrevocable trust. However, any transfer to the trust can now be penalized, limiting a veteran’s ability to qualify for the program.
Nevertheless, creating a trust might still be a good idea, especially if the veteran can wait years before applying for Aid & Attendance benefits. For example, if you are still relatively healthy, then you might create a trust years in advance. By the time you need benefits, the penalty period should have run out.
Speak with a Veterans Aid & Attendance Lawyer in The Villages
The new changes to eligibility for Aid & Attendance are designed to reduce abuse. However, most of our clients are badly in need in of help.
If you have a question, please contact us at the Millhorn Elder Law Planning Group in the Villages today. We can review your situation and help you decide the best path forward. To schedule a free consultation, please call 800-743-9732.