The Veterans Administration has a pension program, referred to as “Aid and Attendance,” which may be beneficial to veterans and surviving spouses of veterans who comply with the various regulations. If qualified the pension amount could be between $1,177 per month for a surviving spouse of a veteran to $2,169 per month for a veteran with a spouse or a child. The Veterans Administration has passed new rules that will go into effect on October 18, 2018. Before we discuss the new rule changes, let’s review the current regulations.
Three categories of items exist which need to be satisfied in order for a veteran to be eligible for Aid and Attendance. Here are the three categories:
The first eligibility category deals with military service. A veteran with 90 consecutive days of active duty who has served one day during a period of war is eligible to apply for Aid and Attendance. A surviving spouse of a wartime veteran may also apply.
The next eligibility category is medical eligibility. To be medically eligible for Aid and Attendance, a veteran, or his or her spouse, must need the assistance of another person to perform some or all of the activities of daily living.
The final eligibility category is financial eligibility. The veteran or the surviving spouse must not have more than $80,000.00 of assets, excluding the house, one car, and personal possessions. In addition, there is currently not a penalty period for any gifts made by the veteran within the last number of years.
However, a number of important changes will go into effect October 18th as it relates to this Aid and Attendance pension. Those new changes are as follows:
• A new three-year look-back period will begin for asset transfers. Before, there was no look-back period for any asset transfers. However, this new three-year look-back period will go into effect on October 18, 2018.
• There is a penalty on asset transfers. The penalty period will be calculated by adding together the amount of gifts made within the last three years and dividing that number by $2,169.00, which is an amount determined by the Veterans Administration. The penalty period begins the first day of the month that follows the last asset that has been transferred.
• As previously stated, the maximum amount of assets that a veteran could have was previously $80,000.00. However, under these new rules, the asset limit is now $123,600.00 for 2018 and will have an inflationary increase each year. The countable assets consist of all assets except the primary residence and tangible property.
• The last change deals with allowable medical expenses. The new rule now allows veterans and surviving spouses of veterans to deduct independent living facilities expenses, as long as a physician says that the individual needed assistance with two activities of daily living, or because of some sort of other cognitive or physical limitation.
Due to these new changes, it is essential for those veterans and/or surviving spouses of veterans who are considering moving to independent living facilities or assisted living facilities to seek assistance with these planning matters immediately.
NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice.