It has been nearly five years since the VA rules for Aid & Attendance benefits changed drastically. Among other things, the new rule imposed a 3-year look back for transfers of assets, including gifts to persons, trusts or purchases of annuities, deny claims for up to 10 years due to transfer and exempt the value of the veteran’s primary residence only if it is on less than two acres of land.
Background of Veteran Aid & Attendance Benefits
The Veteran’s Aid and Attendance (A&A) Pension provides benefits for qualified veterans and their surviving spouses who are 65 years of age or older or disabled, and require the regular attendance of another person to assist in eating, bathing, dressing, and undressing or taking care of the needs of personal hygiene (known as Activities of Daily Living). This could include home care or care in a facility.
In order to qualify, there is a three-prong test.
FIRST: The Veteran must have served during a defined war period and must not have been dishonorably discharged. The eligible war time periods include the following time periods:
- World War II (December 7, 1941, to December 31, 1946)
- Korean conflict (June 27, 1950, to January 31, 1955)
- Vietnam War era (November 1, 1955, to May 7, 1975, for Veterans who served in the Republic of Vietnam during that period. August 5, 1964, to May 7, 1975, for Veterans who served outside the Republic of Vietnam.)
SECOND: An applicant can only qualify for A&A if their “net worth” is less than $150,538 (2023). Net worth includes all of their assets (with the exception of their primary residence, provided it has less than 2 acres), PLUS their annual income, minus any unreimbursed medical expenses. Generally speaking in order to maximize the allowable stipend, the unreimbursed medical expenses have to exceed the income anyway, so that equation should be a wash. So ultimately, if the applicant has more than $150,538 in assets, they will not qualify, which is why some applicants may need to transfer assets prior to applying.
THIRD: In order to maximize the A&A pension, the Applicant’s non-reimbursable medical expenses must either come very close or exceed their income.
If all of these tests are met, then the Veteran or the Veteran’s surviving spouse can receive a monthly stipend from $1432-$3536 per month. Once qualified, the stipend can be used for whatever the recipient wants or needs. Unlike Medicaid, the money is paid to the recipient and not directly to the caregiver. And also unlike Medicaid, there is no reimbursement to the VA.
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What Changed In Veterans Benefits Eligibility Five Years Ago?
The “look-back” is the time period immediately prior to the application for benefits that the entity that approves or denies the application for benefits reviews the applicant’s transfers to determine if he or she made any gifts.
Under Medicaid rules, the “look-back” is five years. As such, if an applicant makes any gifts during the 5-year period prior to applying to the State for long-term care services through Medicaid, he or she could be penalized or disqualified. Effective as of 10/18/18, the VA look-back is three years. And the penalty period for transferring an asset within the look-back period could be up to ten years!
The transfer penalties do not apply if you transfer an asset that is exempt, such as the primary residence, or if the transfer does not otherwise make the applicant qualified. For example, if a Veteran’s net worth is $90,000 and he or she gives away $10,000, that gift will not penalize him or her because the gift did not help reduce the assets below the net worth that is allowable to have.
2023 Veterans Aid & Attendance pension rates
Disclaimer: The information provided in this article does not, and is not intended to, constitute legal advice and is for general informational purposes only.
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Joan Reed Wilson Esq. – Managing Partner
Practices in the areas of estate planning, elder law, Medicaid planning, conservatorships, probate and trust administration, and real estate. Admitted to practice in the States of Connecticut and California, she is the President-elect of the CT Chapter of the National Academy of Elder Law Attorneys (NAELA), an active member of the Elder Law Section of the Connecticut Bar Association, accredited with the PLAN of CT for Pooled Trusts, with the Veteran’s Administration to assist clients with obtaining Aid & Attendance benefits for long-term care needs and with the Agency on Aging’s CareLink Network.