Veterans Aid and Attendance Lawyer

 

  1. What Is the Amount of the Aid and Attendance Benefit?

  2. Who Is Eligible for the Aid and Attendance Pension Benefit?

  3. Is Aid and Attendance Only for Low Income Veterans?

  4. How is the Aid and Attendance Benefit Calculated?

  5. Filing a Claim

  6. The Net Worth Test

  7. The Look-back Rule

  8. The Penalty Period

Evan H. Farr is an Accredited Attorney with the U.S. Dept. of Veterans Affairs.  The Farr Law Firm is an Elder Law and Estate Planning Firm that also specializes in helping Veterans and their spouses obtain the financial assistance to which they are entitled. If you are a Veteran or spouse of a Veteran and you need assistance in your home, or are living in or considering moving into an Assisted Living Facility or Continuing Care Retirement Community, please contact us to see if you might qualify for the Veterans Aid and Attendance Special Pension Benefit or the Veterans Housebound Special Pension Benefit.

 Who Is Eligible for the Aid and Attendance Pension Benefit?

To receive the Aid & Attendance Special Pension Benefit or Housebound Special Pension Benefit, a qualified veteran must have served on active duty, at least 90 days, with at least one day of service during a period of wartime.

Periods Designated As Wartime:

World War II — December 7, 1941 through December 31, 1946

Korean Conflict — June 27, 1950 through January 31, 1955

Vietnam Era — August 5, 1964 through May 7, 1975; for veterans who served “in country” before August 5, 1964, February 28, 1961 through May 7, 1975

Gulf War — August 2, 1990 through a future date to be set by law or Presidential Proclamation

There must have been a non-dishonorable discharge. Single surviving spouses of qualified veterans are also eligible.   If younger than 65, the veteran must be totally disabled.  For Merchant Marine service, the veteran must have been stationed on a ship for at least 90 days of active duty between December 7, 1941 and August 15, 1945.
If age 65 and older, there is no requirement to prove disability.  However, the veteran or spouse must be in need of regular aid and attendance due to: Inability of claimant to dress or undress himself (herself), or to keep himself (herself) ordinarily clean and presentable; frequent need of adjustment of any special prosthetic or orthopedic appliances which by reason of the particular disability cannot be done without aid (this will not include the adjustment of appliances which normal persons would be unable to adjust without aid, such as supports, belts, lacing at the back etc.); inability to feed himself (herself) through loss of coordination of upper extremities or through extreme weakness; inability to attend to the wants of nature; or incapacity, physical or mental, which requires care or assistance on a regular basis to protect the claimant from hazards or dangers incident to his or her daily environment.

Not all of the disabling conditions in the list above are required to exist.  It is only necessary that the evidence establish that the veteran or spouse needs “regular” (scheduled and ongoing) aid and attendance from someone else, not that there be a 24-hour need.

Determinations of a need for the aid and attendance or housebound benefit is based on medical reports and findings by private physicians or from hospital facilities. Authorization of aid and attendance or housebound benefits is automatic if evidence establishes the claimant is a patient in a nursing home or that the claimant is blind or nearly blind or having severe visual problems.

 What Is the Amount of the Aid and Attendance Benefit?

In 2018, the Veterans A&A Pension can provide up to the following maximum amounts (called the MAPR or Maximum Annual Pension Rate):

Single sick Veteran ~ $21,961 per year / $1,830 per month
Healthy Veteran with sick spouse ~ $17,240 per year / $1,436 per month
Married sick Veteran ~ $26,036 per year / $2,170 per month
Married, Both Veterans sick ~ $34,836 per year / $2,903 per month
Surviving Spouse ~ $14,113 per year / $1,176 per month

Source: Veterans Pension Rate Table

Is Aid and Attendance Only For Low Income Veterans?

No, and this is the primary reason that this benefit is so widely misunderstood. If you speak to a Veterans Service Representative in a regional VA office and ask them about the Veterans Aid and Attendance benefit, they will typically ask for your household income.  When you tell them your household income, they will compare it to a chart and most often tell you that you earn too much income to receive the benefit.  While the information they provide may be technically accurate, what they typically don’t explain is the “income” for Veterans Administration purposes (sometimes called IVAP or “adjusted income”) is actually your household income minus your recurring, unreimbursed medical and long-term care expenses.  These allowable, annualized medical expenses are such things as health insurance premiums, home care expenses, the cost of paying a family member or other person to provide care, the cost of adult day care, the cost of an assisted living facility, or the cost of a nursing home.
To be able to receive the Veterans Pension with Aid and Attendance benefit, the veteran household cannot have adjusted income (i.e., household income minus unreimbursed medical expenses) exceeding the Maximum Allowable Pension Rate — MAPR — for that veteran’s Pension income category. If the adjusted income exceeds MAPR, there is no benefit. If adjusted income is less than the MAPR, the veteran receives a Pension income that is equal to the difference between MAPR and the household income adjusted for unreimbursed medical expenses. The Pension income is calculated based on 12 months of future household income, but paid monthly.

How is the Aid and Attendance Benefit Calculated?

The monthly award is based on VA totaling 12 months of estimated future income and subtracting from that 12 months of estimated future, recurring and predictable unreimubursd medical expenses. Allowable medical expenses are reduced by a deductible to produce an adjusted medical expense which in turn is subtracted from the estimated 12 months of future income.

The new income derived from subtracting adjusted medical expenses from income is called “countable” income or IVAP (Income for Veterans Affairs Purposes). This countable income is then subtracted from the Maximum Allowable Pension Rate — MAPR — and that result is divided by 12 to determine the monthly income Pension award. This award is paid in addition to the family income that already exists.

Unreimbursed Medical Expenses

Any amounts paid within the 12-month annualization period regardless of when the indebtedness was incurred.
See 38 CFR 3.278 for definition of what constitutes a medical expense.

Medical Expenses Deducted from Income

Medical expenses are those that are either medically necessary or improve a disabled individual’s functioning. These medical expenses are deducted from income to calculate IVAP. This calculations is complicated when the claimant is receiving home care or is in an independent or assisted living facility, as the new rules limit the circumstances under which room and board expenses may be counted, as well as the amount paid. There are very specific rules as to which services qualify as medical expenses and the claimant will have to be able to identify those in his/her application. Payments for meals and lodging, as well as payments for other facility expenses not directly related to health or custodial care, are medical expenses only when either of the following are true: (A) the facility provides or contracts for health care or custodial care for the disabled individual; or (B) a physician, physician assistant, certified nurse practitioner, or clinical nurse specialist states in writing that the individual must reside in the facility (or a similar facility) to separately contract with a third-party provider to receive health care or custodial care or to receive (paid or unpaid) health care or custodial care from family or friends.

Filing a Claim

Filing a claim for the Veterans Aid and Attendance Pension Benefit is complex and time-consuming. If you want to do it correctly, it’s important to get qualified assistance. Just knowing which form to fill out and how to complete it is a complex endeavor in itself. Even if the proper form is completed, failure to check a single box may result in a complete denial of your claim.

The application process involves: obtaining evidence of prospective, recurring medical expenses; appointments for VA powers of attorney and fiduciaries; and a thorough understanding of the application process.  Typically, qualification for this benefit involves reallocation of assets and shifting of income in order to qualify, and these reallocations may have significant impact on Medicaid eligibility.

Given that many veterans who need the Aid and Attendance Benefit will eventually wind up also needing Medicaid, this process should not be attempted without the help of a qualified elder law attorney who thoroughly understands both the Veterans Aid and Attendance Benefit and the Medicaid program, as well as the interaction between these two benefit programs.

We assist Level 4 clients of our firm, at no charge, in completing the required paperwork and obtaining this benefit.
One of the document needed to commence a claim for this benefit is the Veteran’s Discharge Documents (DD-214 Report of Separation).  If you don’t have an original DD-214, most veterans and their next-of-kin can obtain free copies of their DD Form 214 and other military and medical records by going to the following web site:  http://tinyurl.com/getDD-214.

Basic Overview of Veteran’s Pension / Aid and Attendance.

The Veterans Administration (VA) pays for long-term care primarily through its “Aid and Attendance” payments, which is actually a veteran’s Special Pension with an add-on for Aid and Attendance.

Prior to October 18, 2018:
– All transfers (to trusts, annuities, gifting, etc.) prior to 10.18.18 are exempt from the look-back period.
– A Single Premium Annuity is not be a countable asset if it was purchased prior to 10.18.18.
– An IRA annuitized before 10.18.18 will not be countable as an asset because of the claimant’s inability to liquidate.

After October 18, 2018:

On January 23, 2015, proposed rule changes to amend the veterans pension application process were published by the VA in the Federal Register. These new rules went into effect October 18, 2018. The new rule changes have a significant effect on elder care planning for veterans, making asset protection trusts for veterans the primary planning tool, using the 3-year lookback period. The new rules mirror Medicaid rules in some ways, as they require a net worth determination and a look-back period, and impose penalties for asset transfers.

The Net Worth Test

The new rule as of October 18, 2018 imposes a net worth limit equal to the current maximum community spouse resource allowance for Medicaid purposes ($123,600). Net worth will be determined by combining assets and annual income. A veteran’s assets are defined to include both the assets of the veteran and the assets of his or her spouse. A surviving spouse’s assets would only include the assets of that surviving spouse.

Calculation of Net Worth:
All Countable Assets + (Annual Gross Income – net Unreimbursed Medical Expenses).
Countable Assets include assets of Veteran as well as the assets of the spouse.

The Look-back Rule on Asset Transfers

Under old VA rules prior to October 18, 2018, there was NO transfer penalty. This meant that individuals could transfer excess assets and apply for VA benefits the next day. The new rules establish a three-year look-back period for asset transfers for less than fair market value; similar to Medicaid’s five-year look back period. The penalty period will be calculated based on the total assets transferred during the look-back period to the extent they would have exceeded the new Net Worth Limit explained above.

Exempt Assets:

The Home (maybe): Under the new rules, the primary residence along with a lot size up to 2 acres (regardless of value), is exempt. Under the old rules, a residence and underlying/surrounding land “similar in size to other residential lots in the vicinity” were not countable. If most residences in the area were on a 20 acres, the applicant’s residence and surrounding land would not be countable.

The new rules impose this very worrisome 2 acre limit “unless the additional acreage is not marketable.” The examples given in the rules with regard to nonmarketable acreage related to acreage “only slightly more than 2 acres,” property that might be inaccessible (surrounded by other owners, perhaps) or property subject to zoning limits that could prevent a sale. It is unknown what other factors might make additional acreage “not marketable.”

Example: Under the old rules, you live in a rural home on 12 acres of land, not uncommon for your county, where most people have lots of between 10 and 50 acres. Under the new rules, you likely have 12 acres of countable real estate. Unless zoning laws or other “marketability issues” prohibit it, you would most likely have to subdivide your property so that your lot is only 2 acres. This process, of course, could take several years, so it will, in almost all cases, be simpler to simply transfer the entire house and land into our Living Trust Plus™ Total Protection Trust and wait out the 3-year lookback.

It is important to note that the house is not an exempt asset for Medicaid in Virginia, and in most states where it is “exempt” in connection with Medicaid, it is not truly protected because of Estate Recovery “clawback,” so houses must still be protected (generally using in a Living Trust Plus™ Total Protection Trust) because anyone who is in need of Veterans Aid and Attendance will most likely, at some point in the future, be in need of Medicaid.

Once the primary residence is sold, for Veterans Aid and Attendance purposes, the residence is no longer exempt because it has been converted to money, and that money will be countable as of January 1 of the year following the year of sale. Another reason that houses need to be protected, preferably in our Living Trust Plus™ Total Protection Trust, prior to being sold.

Family transportation vehicles and personal items used on a regular basis.
Note: Multiple vehicles are excluded so long as they are used for the veteran on a regular basis; not so with Medicaid, which exempts only one vehicle.

Pre-paid burials and burial plots.

Any asset that was transferred or gifted prior to 10.18.18.

 Penalty Period

Under the new regulations, veterans or their surviving spouse who transfer assets within three years of applying for benefits will be subject to a penalty period that can last up to 5 years.

There is a complex calculation to determine the penalty period. The new rule uses a single penalty divisor for all claimants, which results in equal penalty periods for equal amounts of precluded asset transfers regardless of the type of claimant. The single divisor is the MAPR in effect on the date of the pension claim at the aid and attendance level for a veteran with one dependent.

Only transfers of countable assets are penalized. Transfers of exempt (non-countable) assets are not penalized.

Transfers are only penalized if they adversely affect Net Worth (i.e., if the transfer reduces net worth to less than $123,600).

Transfers to set up a SNT for a dependent child who was disabled before the age of 18 are not penalized.

There are exceptions to the penalty period for fraudulent transfers and for transfers to a trust for a child who is unable to provide “self-support.”

Under the new rules, the VA will determine a penalty period in months by dividing the amount transferred that would have put the applicant over the net worth limit by the maximum annual pension rate (MAPR) for a veteran with one dependent in need of aid and attendance.

It does not matter at whether the transfer penalty is being calculated for a single veteran, a married veteran, or a widow of a veteran. The VA will always use the MAPR for a veteran with a dependent divided by 12.

For example, assume the 2018 net worth limit of $123,600 and an applicant with a net worth of $115,000. The applicant transferred $30,000 to a child during the look-back period. If the applicant had not transferred the $30,000, his net worth would have been $145,000, which exceeds the net worth limit by $21,400. The penalty period will therefore be calculated based on $21,400, the amount the applicant transferred that put his assets over the net worth limit ($145,000-$123,600).

The transfer subject to penalty would be divided by the 2018 MAPR of $2,170, resulting in a 9.86 month penalty ($21,400 divided by $2,169 = 9.86). The penalty begins to run on the first day of the month following the month of transfer.