Changes in Veterans Pension Program
On October 18, 2018, the Department of Veterans Affairs (VA) issued new rules regarding the eligibility of applicants applying for pension benefits. The pension program applies to the Aid and Attendance benefit which is frequently used by eligible Veterans and their spouses' for long-term care assistance. These benefits are available to wartime Veterans and surviving spouses who are disabled and/or have additional medical needs. There are some financial limitations discussed below.
Summary of New Rules
Net Worth - There is now a bright-line rule regarding the net worth of an applicant. This amount is currently set at $123,600 and will increase annually. When calculating the net worth amount, assets are combined with annual income. Out-of-pocket medical expense can reduce income, and can help applicants qualify for the highest benefit
Home Value - the home is generally not included in the net worth calculation.
Look-back-Penalty - There is now a look-back period of 36 months when applying for needs-based pension. Any asset that was transferred for less than fair market value during the 36-month period immediately preceding the pension benefits application will result in a penalty period, not to exceed five years. There are exceptions to the rule and ways to cure or avoid the penalty.
Annuities - If an annuity can be liquidated, then it is counted as an asset. If the annuity cannot be liquidated, then distributions from the annuity are considered income. The look-back penalty also applies to annuities.
Some Benefit to the New Rules - These new rules make what were vague definitions and some guessing into clear and bright-line rules. Attorneys can better advise their clients and their families.
These new rules provide more certainty when applying to the VA for needs-based benefits. Give us a call if you would like to talk further about the changes or to explore whether you or a loved one may qualify.
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