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New VA Rules for Pension and Aid & Attendance Can Affect You

If you have met with me for a consultation to discuss long term care planning during the last three years, you have heard me mention that the VA was proposing changes to its eligibility rules for need-based programs such as pension and Aid & Attendance.  These VA monetary benefits are paid to veterans and/or their surviving spouses to supplement their income when they meet net worth, income and medical expense requirements.  These benefits can are helpful to pay for care in a person’s private residence or in an assisted living facility. On September 18, 2018, the final rule was published and it is effective October 18, 2018.  The new rules now make qualifying for pension and Aid & Attendance benefits more similar to the Medicaid eligibility rules.  Here are some highlights of the new rules:

  1. Definitive Net Worth Standard: The net worth limit applies to both single as well as married veterans – for 2018 it is $123,600.00.  This is the figure set by Medicaid as the maximum community spouse resource allowance.  Going forward the age and life expectancy of the veteran will no longer be taken into consideration which in the past resulted in inconsistent decisions for veterans.
  2. Home Exclusion: The home continues to be an excluded resource;  the home and a lot not to exceed 2 acres unless the additional acreage is not marketable.
  3. New Look Back Period: There is now a 3 year look back period. On the application the veteran will be asked whether the veteran or their spouse has transferred resources for less than fair market value (i.e. a gift) during the look-back period.  A penalty will be calculated (which equates to a period of disqualification for VA benefits).  The penalty begins on the first day of the month that follows the last asset transfer.  The maximum penalty period is 5 years.
  4. Deductible Medical Expenses:  Veterans and their spouses can now deduct from their income as a medical expense the cost of health care services or custodial care received in  a licensed care facility (other than a nursing home). By being able to deduct these type of expenses it lowers the countable income making it more likely that a veteran can qualify for pension or Aid & Attendance.  If it is a residential facility it must be staffed 24 hours per day with care providers and those providers do not have to be licensed health care providers.  ‘Custodial care’ means the veteran requires regular assistance with two or more activities of daily living or, supervision because the individual has a physical, mental, developmental or cognitive disorder that requires care or assistance on a regular basis to protect the individual from hazards or dangers incident to their daily environment.  Payments made for meals and lodging not directly related to health or custodial care are medical expenses if the facility provides for health care or custodial care for the disabled individual or, a physician, physician assistant, certified nurse practitioner or clinical nurse specialist states in writing that the individual must reside in the facility to separately contract with a third-party provider to receive health care or custodial care.

If you are a veteran or, the surviving spouse of a veteran and you have not yet applied for pension or Aid & Attendance benefits I recommend you schedule a follow-up consultation with me to review your situation to determine how to maximize your rights under the new rules.

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Law Office of Stephanie L. Schneider, P.A.
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