Intro: We owe our lives and our freedoms to our service men and women. They are willing to give their all for the USA. 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 legislative change that will CUT the availability of benefits.
Q: What is this benefit that is being changed?
A: This is a "Special Pension" benefit called Aid and Attendance. No, it's not for those who retire from the armed services. This is a benefit available to veterans AND their surviving spouses who are in need of financial and health care assistance. Most veterans are unaware of this benefit and only a handful of surviving spouses are aware. The veteran must have had at least 90 days of service, with at least 1 day 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 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 regulations 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 years.
Q: So, what are the changes being made to these regulations?
A: The VA intends to impose a three year look back period. That means that if any gift of assets is made in 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, it's 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 the applicant.
So for a married veteran, 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: I agree. 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 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 other changes and numerous questions unanswered by the rules that directly impact veterans.
Q: When will these regulations be changed?
A: As early as February 2016 but our best guess is in Spring of 2016. The VA introduced them 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.
Close: These new rules 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.