VA benefits, Aid and Attendance
Posted on Veterans Day 11/11/2015--We thank our brave service men and women for their service!
We owe our lives and our freedoms to our service men and women. They are willing to give their all for the USA. Many come home injured or with disabilities that affect the rest of their lives. Others have no visible injuries but as they age, they need extra help with living or health expenses. We thank them for their service. Shouldn't our country be willing to help these veterans to the maximum extent? The Veteran's Administration does little to explain the available benefits to Veterans. Now one of these programs faces a huge regulatory change that will CUT the availability of benefits.
Q: What kinds of benefits are available to our veterans?
A: There are certain benefits called "compensation" available to veterans who have a service-related injury, illness or disability. There are health insurance and RX coverage for many vets. Most people know about college help for vets, mortgage assistance, Veteran's Homes, and many other programs in the community.
Another lesser known benefit is for veterans who are aging and need financial assistance to remain in the community, especially for those who have health issues and need medical help. This is a "Special Pension" benefit. No, it's not for those who retire from the armed services. This is a benefit available to veterans AND their surviving spouses. Most veterans are unaware of this benefit and only a handful of surviving spouses are aware.
Q: What is this benefit?
A: There are several kinds of Special Pension, but the one we are talking about is called "Aid and Attendance." This is available to veterans (and their spouses) who have at least 90 days of service, as long as at least 1 day was during war time and they have OTHER THAN a dishonorable discharge. Also the vet or spouse needs to be over age 65 and need help with their activities of daily living, like bathing, dressing, eating, toileting, and transferring.
There are also limitations on income and assets. But there are planning opportunities to reduce income and assets.
Q: What assets are you allowed to keep?
A: Well, the house and surrounding land, a car, cemetery plots, pre-paid funerals, and personal items are all exempt. Plus, you can keep about $80,000 if married and $40,000 if single.
Q: What if the assets exceed the limit?
A: Right now, the rules allow the vet to gift their excess assets to other family members or to a special kind of Irrevocable Trust. Once transferred and the assets are reduced, then you can get the Aid and Attendance benefit. The law has been like this for many many years.
Q: So, are there changes being made to this rule?
A: Yes, the VA intends to impose a three year look back period. That means that if any gift of assets is made during the three years prior to the application, there will be a penalty period. This is similar to the five year look back period for Medicaid. So, the look back is kind of understandable. But, the way they calculate the penalty period is VERY unfair.
For example, let's say there is a $50,000 gift. The penalty period is a number of months of ineligibility for Aid and Attendance determined by dividing the amount of the gift by the maximum benefit allowable to that applicant.
For a married veteran, in 2015 the maximum benefit is $2120, so the penalty period is $50,000/$2120 = 23.5 months. BUT, for a surviving spouse, the maximum benefit is $1149, so the penalty period is $50,000/$1149 = 43.5 months! That is very unfair to the spouses.
Q: Are there other changes that they are going to make?
A: Yes. They do give you an income credit for paying a caregiver, but they are limiting the amount to no more than $32 per hour. It's an arbitrary amount, based upon a study by a civilian company, MetLife. Plus, in order to allow it they are going to require extensive documentation and details on the services provided.
Additionally, in the past, the house or farm plus all the surrounding land was exempt. Now, they are only going to exempt the house and 2 ACRES! This is blatantly unfair to farmers and other large landholders.
There are also numerous questions unanswered by the rules that directly impact veterans.
Q: When will these regulations be changed?
A: The current best guess is in February or March of 2016. They introduced the changes last January and already held an open comments period, so they are set to enact the changes.
Q: What planning should we undertake to protect assets and obtain eligibility?
A: Plan now! See a VA accredited attorney for help now. If you are considering making an application for Aid and Attendance in the next six months, accelerate the planning so any gifting is done within the next couple of month to avoid the new unfair penalty period.
These new regulations are a major disservice to our proud service men and women to whom we owe our freedom! You need to plan now to obtain benefits while protecting assets.