Intro: We owe our lives and our freedoms to our service men and women. They are willing to give their all for the USA. The Veteran's Administration does little to explain the available benefits to Veterans. Now one these changes are not being reported to the public. The VA plans to enact these regulations without a vote of the people or of the legislature.
Q: Tell us again, what is this benefit that is being changed?
A: This is a benefit called Aid and Attendance, 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, depending upon your age and health.
Q: What if the assets exceed the limit?
A: The new regulations are changing the limit in 2016, the one thing they did right. Under the new rules, whether you are married or single, you will get to keep the maximum resource amount for a married couple under Medicaid, currently $119,220, without any age or health restrictions. But you will be disqualified if your assets besides the house and one car exceed this amount.
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.
There are also other unfair 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 2016. The VA introduced them in January 2015 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.