In January 2015, the VA proposed amendments to its regulations concerning the requirements to qualify for the Improved Pension (commonly referred to as Aid & Attendance, or A&A).  On September 18, 2018, the new requirements were finally published.  The new rules will go into effect October 18th.  Veterans or widows of veterans who may need help paying for care needs should try to get their planning done by that date to avoid new restrictions.
What Are The New Rules?
Three-Year Look-Back For Asset Transfers.  Beginning October 18, 2018 there will be a 3-year “look back” on transfers of assets for less than fair market value.  Previously you could transfer assets in one month, and apply for VA benefits the next month with no look back at all. The 3-year look back has eliminated the option of last-minute planning with immediate benefits. NOTE:  Any transfer prior to October 18, 2018 will be protected and not subject to the new laws; however, the transfers need to be made in the proper way.
Penalty for Asset Transfers.  Transfers made during the look-back period will be subject to a penalty period (a period of ineligibility) that can last up to 5 years.  The penalty is calculated by using a set amount as a divisor (the monthly A&A benefit amount –  currently $2,169.00 per month for Aid & Attendance for a veteran with one dependent), regardless of whether the application is for a surviving spouse or a qualifying veteran.  Once determined, the penalty period begins on the first day of the month that follows the last asset transferred.
Example:  Joe is a married veteran who needs financial help to pay for his at-home care needs.  He gives assets totaling $21, 690 to his daughter in November 2018 in order to reduce his assets and apply for A&A.  If approved, there will be a 10-month “penalty period” ($21,690 transferred ÷ $2,169 monthly benefit for married veteran A&A = 10 months).  Joe will receive no benefits during this period, beginning in December.
Net Worth Test.  The prior “asset test” was “sufficient means” to meet the applicant’s needs, which was generally around the $80,000 mark (or less for older veterans or widows).  Under the new regulations, the asset limit is now set at $123,600 for 2018 and increased each year with inflation.  The asset test takes into account all assets (minus the primary residence and personal belongings like cars) plus annual gross income, minus permissible medical expenses.  Be sure to check with an experienced attorney who is also accredited agent by the VA to determine whether your assets are countable or exempt under the new laws.  Richard Courtney is an accredited VA attorney.
Allowable Medical Expenses.  The changes now allow qualified veterans and widows to deduct Independent Living Facilities expenses as a deductible medical expense as long as a physician, physician assistant, certified nurse practitioner, or clinical nurse specialist says that the person EITHER needs assistance with 2 ADLs (Activities of Daily Living) OR supervision due to cognitive or physical limitations.  Previously only home care, assisted living and nursing home care costs were allowed as deductions.
The new rules may make prevent veterans or widows who need VA benefits from becoming eligible as quickly as prior rules allowed, but we can help you or your loved ones plan for obtaining these valuable payments to help pay for long term care needs.  Call us today.