Planning for a veteran’s aid and attendance benefits
By Virginia Lawyers Weekly
Published: May 21, 2012
Tags: Elder Law, Veterans Published: May 21, 2012
A&A is a pension program, available to certain veterans, and widowed spouses of veterans who need long term care services at home, in assisted living, or in a nursing home. A&A is a non-service connected benefit: the veteran need not have been injured in the line of duty to qualify the veteran or surviving spouse for benefits. A veteran can apply for benefits based upon his or her spouse’s need for long term care, even if the veteran is healthy.
Wartime Service Requirement
To qualify for the benefit, a veteran must have served at least 90 days of active duty including at least one day during a period of war and have received a discharge that was not dishonorable. The veteran need not have served in the war zone to qualify. War time periods include:
World War II – Dec. 7, 1941 – Dec. 31, 1946
Korean War – June 27, 1950 – Jan. 31, 1955
Vietnam War – Aug. 5, 1964 – May 7, 1975
Gulf War – August 2, 1990 through date to be set by law by presidential proclamation
Need for Daily Assistance
In addition to military service, the veteran or spouse must be in need of assistance on a regular basis, as certified by a physician. This requirement is met if the claimant is:
- Blind
- Living in a nursing home
- Needs assistance with dressing, grooming or attending to the wants of nature
- Has a physical or mental incapacity that requires assistance to protect the individual from hazards encountered in his or her daily environment.
The VA assesses income and asset information to determine eligibility. Recurring medical costs, such as home health, assisted living and nursing home care are deducted from the veteran’s or spouse’s income. If the net income is less than the maximum benefit payment, the claimant meets the income criteria. The payment will be the difference between the claimant’s net income and the maximum benefit payment.
The VA uses a net worth calculation rather than a fixed asset limit. The total amount a claimant can keep is based upon age, total household gross income and total household unreimbursed medical expenses. The VA aims to protect sufficient assets to provide for the unreimbursed medical expenses over the life expectancy of the claimant (the VA and Medicaid use different life expectancy tables). In most cases, approved applicants have less than $80,000 in countable assets.
VA Planning and Medicaid conflict?
While A&A pensions and Medicaid payment for long term care are both subject to income and asset rules, the rules used by the two program frequently conflict. Two examples of the conflicts are the treatment of transfers of assets, the home and trusts funded with assets of a disabled person.
The VA currently does not penalize individuals for transferring assets prior to applying for benefits, as long as the assets are transferred to a person who does not reside in the household of the veteran. For example, an applicant who gave his son $100,000 in June 2010 would not have a penalty imposed if he applied and qualified for A&A in June 2012. The same applicant would incur a penalty period of 16 months and 26 days if he applied and qualified for Medicaid long term care benefits in June 2012 (or 12 months and 28 days in Northern Virginia). The Medicaid penalty would run forward from June 2012.
The two programs treat the individual’s home differently. The home is not a countable resource for A&A purposes. The home is a countable resource for Medicaid if the applicant does not reside there and the home is not occupied by a spouse or certain other dependents. A high value home (equity greater than $525,000) will disqualify an applicant for long term care benefits, even if the applicant lives in the home, unless the home is occupied by a spouse or dependent or disabled child.
Trusts created for and funded with the assets of disabled individuals under the age of 65 enjoy a protected status within the Medicaid program. Transfers into the trusts do not result in a penalty period, and the funds in the trust are not countable resources. (The “catch” is that upon the disabled beneficiary’s death, the state is reimbursed for any Medicaid payments made on behalf of the beneficiary). The same trusts are considered countable resources for A&A, although by their terms income and principal may not be used for support or medical services provided through another source.
Because of the differences between A&A and Medicaid, it is important to consider both programs when planning for clients with current or anticipated long-term care needs. Planning for eligibility in one program may result in disqualification in the other. Long-term care planning considers the client’s potential need for all available benefits, the client’s potential eligibility for these benefits, and the availability of planning strategies that will be most beneficial for the client. In referring clients for long-term care planning, seek an attorney whose practice includes both types of benefits. A good place to start is the VAELA website at www.vaela.org.
Benefits
A&A is a monthly income benefit, paid directly to the veteran or spouse. For 2012, the maximum benefit rates for Aid and Attendance are:
Single Veteran: $1,704 per month ($20,447 per year)
Married Veteran: $2,020 per month ($24,239 per year)
Widowed Spouse: $1,095 per month ($13,138 per year)
Veteran Married To Veteran: $2,631 per month ($31,578 per year)
- By Loretta Morris Williams, an elder law attorney with the firm of Jean Galloway Ball PLC in Fairfax.
Great Article. Please let us know if you need legal advice.
Tucker Griffin Barnes
Charlottesville, VA (434-973-7474)
Inquire@TGBlaw.com
www.TGBLaw.com
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