The Veteran’s Administration (VA) offers a pension benefit to low-income veterans (or their spouses) who are in nursing homes or who need help at home with the activities of daily living, like dressing, bathing and other similar tasks. The pension, called Aid and Attendance, is currently underused, but impending regulations will soon make it available to even fewer veterans.
The new regulations will, for the first time, specify asset limits for qualification and impose a look-back period and transfer penalties similar to Medicaid’s. The looming changes mean that those considering applying for Aid and Attendance should act quickly. Currently, to be eligible for Aid and Attendance a veteran (or the veteran’s surviving spouse) must meet certain income and asset limits. The asset limits aren’t specified, but $80,000 is the amount usually used. However, unlike with the Medicaid program, there are no penalties if an applicant divests him- or herself of assets before applying.
The proposed regulations are set to establish an asset limit mirroring the current amount that a Medicaid applicant’s spouse is allowed to retain ($120,900 in 2017). But in the case of the VA, this number will include both the applicant’s assets and income. It will be indexed to inflation in the same way that Social Security increases. An applicant’s house will not count as an asset, but there is a two-acre limit on the lot size that can be excluded.
The regulations also establish a three-year look-back provision. Applicants who transfer assets within three years of applying for benefits will be subject to a penalty period that can last as long as 10 years. To avoid the penalty, applicants will have to present clear and convincing evidence that the transfer was not made in order to qualify for Aid and Attendance benefits.
Under the proposed rules, the VA will determine a penalty period in months by dividing the amount transferred by the applicable maximum annual pension rate (MAPR). The MAPR for surviving spouses is a little more than half the MAPR for veterans, which means the penalty period for a surviving spouse would be almost twice as long as a veteran’s penalty period would be for the same transferred asset.
These proposed regulations have been looming on the horizon for awhile, with the latest reports indicating that they may go into effect as early as the second quarter of 2017, which runs through the end of June. If you think that you may qualify for Veteran’s Benefits and are considering applying for Aid and Attendance, it would be wise to start the process as soon as possible.