Which Veteran’s Benefits are Expanding and Increasing in 2021?

Chris, a 75-year-old Vietnam veteran, is planning on moving to Northern Virginia to reside with his son and his family. He is eager to remain at his son’s home for as long as possible, but is concerned he won’t be able to manage without help. Chris, and his son who is a more recent 9-11 veteran, are researching new benefits and current ones that will be expanding and increasing in 2021. They are also looking into Veterans Aid & Attendance to help pay for some of Chris’ extensive caregiving needs in the home.

New Legislation Expanding Veterans Benefits Has Recently Been Enacted

Legislation making several changes to benefits administered by the Department of Veterans Affairs (VA) was enacted after being signed into law on January 5, 2021. The legislation is known as the Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvements Act of 2020. It makes several changes to existing benefit programs.

Here are some of the changes that may affect Chris and his son in our example, and other veterans:

Life Insurance

Beginning in 2023, the VA will begin to offer all disabled veterans under age 81 a whole-life policy. The program will be similar to Veterans Group Life Insurance (VGLI); however, veterans must sign up for VGLI within 16 months after leaving the service. The new insurance program will have no such time limit. Policies will be limited to a $40,000 payout for most veterans when the program begins. 

For veterans who qualify for this benefit and others, additional life insurance is a wise idea, since more than $40,000 will likely be needed. For many of my clients, I recommend hybrid life insurance policies with long-term care benefits. Consumers, including veterans and their families, are becoming much more interested in hybrid policies that add long-term care benefits to annuities or life insurance.

Hybrid long-term care insurance policies most often combine permanent life insurance with an accelerated death benefit rider that pays benefits for long-term care or chronic illness. Hybrid policies address most of the shortcomings of traditional LTC insurance policies, while offering tax-free reimbursements for qualified long-term care expenses; tax-free death benefits to your heirs if your LTC benefits are not fully used; and a potential return of your premium if you change your mind down the road. For still-healthy individuals, these policies can generally be issued up until age 80. Learn more here.

Memorial Benefits

Within two years of the bill becoming law, the VA will begin paying the costs to transport a deceased veteran’s remains to state and tribal veterans’ cemeteries. Currently, the VA will pay only to transport a deceased veteran’s remains to a national veterans’ cemetery.

In two years, the VA will begin furnishing urns for storing the cremated remains of deceased veterans. Families will have the option of receiving a free headstone or burial urn, but not both. Currently, most veterans are eligible to receive a free headstone upon their death, but not an urn.

Also, veterans who receive the free VA-issued headstone and are buried in either a state or private cemetery will be able to have their spouse’s name engraved on the headstone at no cost. Currently, the family must pay to have the spouse’s name engraved on a VA-issued headstone. This will be effective for deaths going back to Oct. 1, 2019. For more details on burial and memorial benefits for veterans, please read my article on the topic here.

Native Americans and VA Copay

Within one year of the law becoming effective, all Native Americans will be exempt from any VA copay for health care or medication, regardless of whether the individual has a service-connected disability.

Home Loans for National Guard Members

National Guard members without active-duty service will be eligible to receive a VA home loan beginning in 2021. The new law makes Guard and Reserve members who have at least 90 days of service eligible for the home loan program. Thirty of those days must have been consecutive.

Currently, only Guard and Reserve members who had at least 90 days of active service are eligible for home loans.

Expansion of Medal of Honor Pension

The monthly pension paid to Medal of Honor awardees will be paid to their surviving spouse upon the death of the service member. The Medal of Honor award is often bestowed posthumously to fallen heroes in recognition for their extraordinary acts of valor. Surviving spouses receiving Dependency Indemnity Compensation (DIC) are not eligible. The current Medal of Honor pension is $1,406.73 a month, above and beyond any military pensions or other benefits for which they may be eligible and it changes annually based on inflation.

Additional 2021 Veterans Benefits

Other benefits and increases will occur in 2021 that are not related to the legislation described above:

Veteran’s Aid and Attendance Benefits Have Increased

Aid and Attendance (A&A) is a benefit paid in addition to monthly veteran pension and disability compensation. A&A can help cover the cost of in–home care, assisted living, or a nursing home. Read more about eligibility here.

The V.A. has revised its monthly pension benefits effective December 1, 2020, as follows:

Monthly benefits (effective Dec. 1, 2020)

Max. Monthly Pension

Max. Monthly Pension with Aid & Attendance

Veteran

$1160

$1936

Veteran with 1 dependent

$1520

$2295

Veteran’s widow

$778

$1244

Veterans’ widow with 1 dependent

$1019

$1484

Veteran permanently housebound

$1418

n/a

Veteran permanently housebound with 1 dependent

$1778

n/a

Widow permanently housebound

$951

n/a

Widow permanently housebound with a dependent

$1191

n/a

 

Total net worth cap has also changed: Effective 12/1/2020, it is $130,772 (was $127,061). Net worth means countable assets plus annual income; however, recurring unreimbursed medical expenses are deducted from income to determine net worth. Some assets, such as most primary residences, are exempt.

Let Us Help You Apply for Veterans’ Benefits and Plan for Long-Term Care

Applying for veteran’s benefits, such as Veterans Aid and Attendance, can be confusing and arduous. Here at the Farr Law Firm, we work with veterans and their spouses to evaluate whether they qualify for the Veterans Aid and Attendance Benefit and/or Medicaid, and we deal with all the paperwork. As an Accredited Attorney with the U.S. Dept. of Veterans Affairs, I understand both the Veterans Aid and Attendance Benefit and the Medicaid program and the interaction between both benefit programs. Please call us to make an appointment for a no-cost consultation:

Fairfax Veterans Aid and Attendance Planning: 703-691-1888
Fredericksburg Veterans Aid and Attendance Planning: 540-479-1435
Rockville Veterans Aid and Attendance Planning: 301-519-8041
DC Veterans Aid and Attendance Planning: 202-587-2797

P.S. Another benefit of being a veteran is a 10% discount off all services at the Farr Law Firm. We hope to see your family soon!

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