The U.S. Department of Veterans Affairs offers a pension benefit to low-income veterans (and their spouses) who are in an assisted living facility or who need help at home with everyday tasks such as dressing or bathing. The program is called “Aid and Attendance.”
Unfortunately for many veterans, the government recently proposed new regulations that will tighten the qualification rules and impose a look-back period and transfer penalties similar to those under Medicaid. As a result of these changes, anyone who may be eligible for Aid and Attendance should probably talk to an attorney about how to proceed.
In the past, veterans or surviving spouses applying for Aid and Attendance had to meet certain asset limits. Different offices used different limits, but $80,000 worth of assets was a common ceiling above which benefits could be denied. However, a veteran or spouse could give away assets to family members in order to qualify, without penalty.
The government has proposed a uniform limit of $119,220, which is the current amount of assets that a Medicaid applicant’s spouse is allowed to retain. However, the government may add together both a veteran’s assets and his or her annual income in determining whether he or she meets the $119,220 limit.
The $119,220 figure will be indexed for inflation. An applicant’s house will not count toward the $119,220, as long as the lot size is two acres or less. If you sell your house, though, the proceeds will count toward the limit unless you use the funds to buy another house in the same calendar year. (Veterans who sell their house in November or December could easily be tripped up by this requirement.)
The proposal also establishes a three-year look-back provision. Applicants who transfer assets within three years of applying for benefits will be subject to a period of ineligibility. To avoid the penalty, applicants will have to present clear and convincing evidence that the transfer was not made in order to qualify for benefits.
If the proposed rules become law, the government will determine the penalty period by dividing the amount transferred by the applicable maximum annual pension rate. Because this rate is much lower for surviving spouses than it is for veterans, the penalty period for a surviving spouse could be almost twice as long as for a veteran for the same asset transfer.
It is not clear yet if the new regulations will take effect, but it appears likely that some types of rules may be implemented. If you are considering applying for Aid and Attendance benefits, you should act quickly and contact an elder law attorney for help.