COVER STORY: VA Changes Complicate Qualification Process
Late last year, the U.S. Department of Veterans Affairs announced sweeping changes to the VA Aid and Attendance benefit. The new rules, which went into effect in October 2018, included the addition of a look-back period for asset transfers, the establishment of net worth limits, and the addition of new medical expense deduction limitations.
These changes in eligibility requirements have created two new hurdles that veterans and their families must clear in order to qualify for benefits.
The first hurdle involves a look-back period. This change is one of the most controversial. Unlike Medicaid, which has a five-year look-back to catch any disqualifying asset transfers, the VA has not previously imposed a transfer penalty on veterans who restructured their assets to qualify for the Aid and Attendance pension.
The new rules change that. The new requirements pertaining to pre-application asset transfers and net worth evaluations establish a 36-month look-back period and establish a penalty period of up to five years for those who restructured their financial portfolio to qualify for pension.
The penalties are harsh. The VA will deny your Aid and Attendance benefits for months or years, based on how much you transferred.
The second hurdle expands the definition of net worth. The VA has set the asset limit at $123,600 for eligibility. Net worth will now include all non-exempt assets plus annual gross income (minus unreimbursed, regularly recurring medical expenses) and will be capped at the current community spousal resource allowance, which is $123,600 for 2018.
Many older veterans and their spouses aren’t aware of the VA Aid and Attendance benefit, which is for veterans (and their spouses) who are 65 or older, served during a period of war, have trouble performing tasks of daily living (bathing, dressing, toileting, etc.), and meet certain financial requirements. The Aid and Attendance benefit can pay up to $26,000 annually via the VA’s non-service-connected pension. Funds can be used to help pay for long-term care, including home health care and nursing home care.
Most veterans and their spouses would benefit greatly from professional, accredited advice to restructure their legal and financial pictures in order to meet the VA’s more stringent requirements in qualifying for the non-service connected pension.
Up until October 2018, this type of planning could be done right up to the day the application is submitted because the VA didn’t have a formal look-back period for asset transfers on the books. That changed on October 18, 2018.
If a veteran needs assistance from the VA Aid and Attendance program, all is not lost. If assets exceed current VA limits, there are still asset planning options that can help the veteran qualify. Consulting with a VA accredited attorney can help you determine the best way to qualify, tailored to your specific circumstances and current financial picture.