By Jessica L. Estes
Any Veteran, or surviving spouse of a deceased Veteran, whose income is not sufficient to cover his or her long-term care expenses, may qualify for a non-service-connected improved pension benefit called Aid and Attendance through the U.S. Department of Veterans Affairs (“VA”). This benefit provides a monthly, tax-free income for the Veteran or surviving spouse provided he or she meets the eligibility and entitlement requirements.
There are four basic eligibility requirements for the Aid and Attendance benefit: (1) the Veteran or surviving spouse must be blind, residing in a nursing home, or require the aid of another person to perform personal functions required for everyday living; (2) the Veteran’s discharge from the military must be anything other than dishonorable; (3) the Veteran must have served at least ninety (90) days on active duty for anything other than training (those days do not have to be consecutive unless service began after September 7, 1980 in which case two years continuous active duty is required, or any length of active duty if the Veteran has a service-connected disability discharge; and (4) one of those days must have been during a period of war.
Additionally, the Veteran or surviving spouse must also meet the entitlement requirements. To be entitled to the benefit, the Veteran or surviving spouse must pass the income and asset tests. The VA counts all gross household income but allows a deduction for unreimbursed medical expenses. The Veteran or surviving spouse’s monthly income for VA purposes (gross income minus deductions) cannot exceed the maximum monthly rates for the Aid and Attendance benefit. Currently, the rate for a Veteran without dependents is $1,881, the rate for a Veteran with one dependent is $2,230, and the rate for a surviving spouse is $1,209.
Previously, there was no specific amount of assets that a Veteran or surviving spouse could retain and still qualify for benefits. Rather, it was up to a claims examiner to decide if the applicant’s net worth was excessive and a bar to entitlement of the benefit. Now, under the new rules, there is a net-worth bright line limit of $127,061. So, if the applicant’s countable assets plus his or her annual income for VA purposes exceed that limit, he or she will not be eligible for the benefit.
Similarly, there is now a look-back period of 36 months. Any transfers for less than fair market value occurring during the 36-month period immediately prior to application will be penalized if such transfer would have resulted in the applicant exceeding the net-worth limit. However, any transfers occurring prior to October 18, 2018 will not be penalized. The penalty period begins on the first day of the month following the last asset transfer and is calculated by dividing the total amount of assets transferred in excess of the net-worth limit by the current monthly rate for a Veteran with one dependent. Under no circumstances, though, will the penalty period exceed five years.
As with any government benefit, the application process can be daunting. If you need assistance filing an application for benefits, contact a VA accredited consultant or attorney. Not only can they assist you in making sure you have a fully developed claim, but by law, they are not allowed to charge for help with filing an application.