CHANGES TO VA PENSION RULES: THEIR POTENTIAL IMPACT

Posted on February 20, 2015 in Elder Law

Proposed Changes to the VA Pension Rules

The Aid and Attendance Pension offered by the Department of Veterans Affairs is a useful program for those who need assistance with the activities of daily living. On January 23, 2015, proposed rule changes to amend 38 CFR Part 3 and the Veterans pension application process were published in the Federal Register. The proposed rule changes have a dramatic effect on elder care planning. They mirror Medicaid rules, such as requiring a net worth determination and imposing penalties for asset transfers.

A brief summary of two key proposals are (1.) the establishment of a net worth limit, and (2.) a look back period of three years for asset transfers with a resulting penalty period for uncompensated transfers. Sounds a lot like the Medicaid rules.
Net Worth
The proposed rule imposes a net worth limit equal to the current maximum community spouse resource allowance for Medicaid purposes ($119,220 for 2015). Net worth would be determined by combining annual income and assets. 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.
Look back on Asset Transfers
The proposal would establish a three year look back period for asset transfers for less than fair market value; Medicaid has a five year look back period. However, VA proposes that their resulting penalty for an uncompensated transfer would be based upon the amount transferred that would have caused the claimant to exceed the proposed net worth limitation, rather than the entire transferred amount. 

This is not the final rule; however, it does paint the picture for the future. The moral of the story is to start planning earlier; plan before there is a crisis. For more information on VA Aid and Attendance pension, visit this site.

If you would like more information, don’t hesitate to contact our office to assess your potential for VA eligibility. Attorney Ken Potter is one of our VA-accredited attorneys.