September 18, 2018 Veterans Affairs Regulation Rule Change Effective October 18, 2018
On September 18, the Veterans Administration (VA) published new rules that make it more difficult to qualify for the VA non-service connected pension benefit called aid and attendance. VA increased the difficulty in eligibility by penalizing gifts, uncompensated transfers, or sales for less than fair market value that were made in the past 36 months, either to a family member or to an irrevocable trust. This is significant because these legal and ethical estate planning strategies done years before hand might cause an applicant for benefits to be ineligible even though he or she otherwise meets the eligibility criteria. VA imposes the same look back and penalty for investing in an annuity. The maximum penalty for gifting and investing in annuities is 5 years depending on the amount of the gift.
The VA will look back 36 months from the application date for gifts. If gifts were made, the VA issues a penalty period going forward. The number of months the VA will penalize the applicant is determined by the value of the gift. The maximum penalty period is set at sixty months (5 years). The same lookback and the same penalty apply to applicants who purchased an annuity in the same time period. This is significant because an applicant’s financial planning done years before applying may penalize him or her.
Call an attorney accredited with the VA if you have questions about how to qualify for the VA aid and attendance pension.
VA Disability Pension (which includes Aid and Attendance) is a benefit paid to wartime Veterans who have limited or no income, and who are age 65 or older, or, if under 65, who are permanently and totally disabled due to non-service-connected conditions. Before a claim for Aid and Attendance may be awarded, a Veteran or surviving spouse must first meet the Disability Pension eligibility requirements. VA Disability Pension is unlike traditional pensions that are based on years of employment or service with a company or organization. Veterans who are more seriously disabled may qualify for increased benefits based on Aid and Attendance or being Housebound. Housebound benefits provide a lower monthly payment than Aid and Attendance benefits, therefore the strategy involves submitting a claim for Aid and Attendance with Housebound constituting a second option the VA may consider.
These benefits are also available to a widow or widower who was married to a wartime Veteran and who has not remarried, except under limited circumstances.
Who is Eligible?
A Veteran may be eligible for pension with an additional award for Aid and Attendance if:
● The Veteran served at least 90 days of active military service, 1 day of which was during a wartime period; or if the Veteran entered active duty after September 7, 1980, and served at least 24 months or the full period for which called or ordered to active duty (there are exceptions to this rule), 1 day of which was during a wartime period; AND
● The Veteran was discharged from service under conditions other than dishonorable; AND
The Veteran’s countable family income is below a yearly limit set by law (the yearly limit on income is set by Congress); AND
● The Veteran is age 65 or older OR permanently and totally disabled, and now requires the assistance of another person as explained more fully below.
A surviving spouse of a wartime Veteran may be eligible for Death Pension with an additional award for Aid and Attendance if the deceased Veteran met the wartime, active duty and discharge requirements above, the surviving spouse has limited income and assets, and is over 65 or disabled and requires the assistance of another person as explained more fully below.
What is Countable Income for Pension Eligibility Purposes?
Countable income is income received by the Veteran and his or her dependents, if any, from most sources, including earnings, disability and retirement payments, interest and dividends, and net income from farming or business. For VA pension eligibility purposes, a dependent includes a spouse, therefore the income of the Veteran and spouse are included as countable income.
What is Net Worth?
Net worth means the net value of the assets of the Veteran and his or her dependents. It includes such assets as bank accounts, stocks, bonds, mutual funds, and any property other than the Veteran’s residence and a reasonable lot area. There is no set limit on how much net worth a Veteran and his dependents can have, but net worth cannot be excessive. The decision as to whether a claimant’s net worth is excessive depends on the facts of each individual case. All net worth should be reported and the VA will determine if a claimant’s assets are sufficiently large that the claimant could live off these assets for a reasonable period of time. The VA’s needs-based programs are not intended to protect substantial assets or build up an estate for the benefit of heirs.
How Does the VA Calculate the Pension Amount?
Total all countable income. Then subtract any out-of-pocket recurring medical expenses. The remaining countable income is deducted from the appropriate annual pension limit, which is determined by the number of dependents, if any, and whether or not the Veteran is entitled to Housebound or Aid and Attendance benefits. This amount is then divided by 12 and rounded down to the nearest dollar. This gives you the amount of the monthly payment. (See Pension Benefit Charts, below)
How Do I Apply?
We can review individual qualifications and provide advice and assistance in obtaining valuable VA benefits.
Documents to provide: Discharge papers, copies of marriage certificates, copies of medical records, and a detailed list of all recurring medical expenses. A copy of the Veteran’s death certificate is needed for a surviving spouse’s application for benefits.
Pension Benefits Charts
2019 Pension Benefit Figures—Wartime Veteran
2019 Pension Benefit Figures—Surviving Spouse
How to access your benefits:
(1) Go to the VA
(2) Ask a Veteran Service Organization to fill out the form for you
(3) Begin with the end in mind with an elder law attorney accredited by the VA
Information and Educational. Not legal advice.