VA Announces Changes to Benefits Regulation
Since January 2015 when the VA proposed amendments to its regulations concerning the requirements to qualify for the Improved Pension (commonly referred to as Aid & Attendance) we have been waiting for the shoe to drop. September 18, 2018, the shoe finally dropped. The new rules went into effect OCTOBER 18, 2018.
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 asset transfers for less than fair market value. Previously you could transfer assets in one month, and apply for 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.
***Any transfer prior to October 18, 2018 will be protected and not subject to the new laws; however, the transfers need to be made strategically as [art of a comprehensive plan.
- 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 MAPR for a veteran with one dependent, which is currently $2,169.00 per month for Improved Pension with Aid & Attendance), 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.
- Net Worth Test:
The prior “asset test” was “sufficient means” which was generally around the $80,000 mark. 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.
- 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.
If you are a Veteran or Widow(er) of a Veteran and are concerned about what to do next, you should Call us at 228-215-1223:
- If you are a veteran and a client of Mayhone Elder Law to schedule a phone conference to discuss your file, and to see what more should be done as a result of the VA actions on October 18.
- If you are a Veteran who has not done planning, have a house and over $130,000 in assets so we can help you determine if you would benefit from VA Benefits Planning.
- Completed Asset Protection Planning before the October 18th Deadline. All transfers that occurred prior to October 18th will not be penalized under the new rules, even if an application for benefits is filed after that date.
If You Provide Services for Veterans, you and your team need to know about these new rules.
Contact our office at 228-215-1223 or [email protected] to find out about upcoming educational workshops and training opportunities on the VA’s updated rules and to refer your clients directly to us as time is of the essence.
What is the Special Monthly Pension Benefit?
The Veterans’ Administration offers a Special Monthly Pension benefit to qualifying wartime veterans and surviving spouses of wartime veterans that is largely unknown. This Special Pension allows for veterans and surviving spouses who require the regular aid and attendance of another person to assist in eating, bathing, dressing, undressing, or taking care of the needs of nature to receive additional monetary benefits. It also includes individuals who are blind or a patient in a nursing home because of mental or physical incapacity. Independent living and assisted care in an assisted-living facility may also qualify.The additional money can help pay for care for the ailing loved one.
This is a “pension benefit” and is not dependent upon service-related injuries. This special pension benefit addresses the needs of the veterans and their surviving spouses who have non-service related disabilities and who require regular assistance with the activities of daily living.
Most people think of veterans benefits as being only for servicemen and -women who were wounded or disabled while serving in the armed forces. By and large, that is true. But—we have learned that there are substantial benefits that may be available to wartime veterans who are now senior citizens and are facing the burden of long term care due to a host of diseases such as Alzheimer’s, Parkinson’s, MS, Lou Gehrig’s Disease, and many others. In fact, the Veterans Administration estimates that millions of wartime veterans and their spouses may be eligible for Special Monthly Pension benefits, and not even be aware of it!
Wartime veterans, or their surviving spouses, become eligible for the Special Monthly Pension benefit when they are over 65 years of age, are permanently disabled and unable to work, are homebound, or need the regular aid and attendance of another—whether at home, in assisted/supportive living, or in a nursing home. The program is based on actual financial need for assistance, so there are income and asset limitations…the VA recently announced changes to the program, including a look-back period for transfers of assets for less than fair-market value. These changes take effect October 18, 2018.
The following are the VA’s defined “periods of war”:
WWII: 12/7/1941 to 12/31/1946
Korea: 6/25/1950 to 1/31/1955
Vietnam: 8/5/1964 to 5/7/1975
Persian Gulf: 8/2/1990 to present
The big question for many families will be, “What will it cost me to seek advice in this area?” Although an attorney who chooses to actually file a claim for veterans benefits must do that portion of his/her work for free, the attorney may charge the usual fees related to any estate planning, financial planning options, Medicaid, Medicare, income tax, or gift tax work, as well as the determination of the financial suitability of filing for a veterans benefit claim. No one should pay an attorney fee unless receiving a fair return on his/her investment.
Only three types of persons are authorized to provide a veteran with assistance filing a claim for veterans benefits:
- An attorney licensed to practice law in your state and accredited through the VA;
- A veterans service organization such as VFW, American Legion, Amvets, etc.;
- A state or county official of the Dept. of Veterans Affairs in your state.
Attorney Dennie Mayhone of Mayhone Elder Law is accredited with the VA. Various members have attended numerous intensive training sessions to learn how to help our veterans and families qualify for this important earned benefit.
Contact Mayhone Elder Law today if you think you may qualify or if you have questions about qualifying.