Effective on October 18, 2018, the Department of Veteran’s Affairs (VA) new rule for Aid and Attendance benefits goes into effect. Aid and Attendance benefits provide money to veterans and their surviving spouses to pay for long term care. Before I give a run-down of the basic changes and how it will affect veterans, here are some basics on eligibility for Aid and Attendance benefits.
Basics of Aid and Attendance Benefits:
Aid and attendance can help seniors and their surviving spouses afford to pay for nursing home, assisted living and home care. For those who qualify, effective December 1, 2018, a single veteran requiring aid and attendance with sufficient medical expenses would receive $22,577 annually and a surviving spouse would receive $14,529 annually.
The basic eligibility requirements are:
- Service: A veteran must have at least 90 days of active duty service, with at least one day during a wartime period.
Periods of War
World War II: Dec 7, 1941 – Dec 31, 1946
Korean War: Jun 27, 1950 – Jan 31, 1955
Vietnam War: Aug 5, 1964 – May 7, 1975 (or Feb 28, 1961 – May 7, 1975 for Veterans who served in Vietnam)
Gulf War: Aug 2, 1990 – Undetermined
- Discharge: Cannot be dishonorable.
- Care Needs: Must meet one of the following categories: (1) Applicant requires the aid of another person in order to perform personal functions required in everyday living, such as bathing, feeding, dressing, attending to the wants of nature, adjusting prosthetic devices, or protecting himself from the hazards of his daily environment; (2) Applicant is a patient in a nursing home due to mental or physical incapacity; (3) Applicant’s eyesight is limited to a corrected 5/200 visual acuity or less in both eyes; or concentric contraction of the visual field to 5 degrees or less.
- Net-worth and Income: Must meet eligibility requirements, to be elaborated on below.
- Surviving Spouse: For a surviving spouse to be eligible, she must have been living with the veteran at the time of their death and must be single at time of application.
Changes to the Aid and Attendance Program:
- Net worth Limit: There is now a firm Net-Worth Limit of $123,600, regardless of the applicant’s age or whether he’s single or married. That means applicants must have a net worth lower than $123,600 to qualify for Aid and Attendance benefits. (This amount will go up slightly each year). To determine net worth, the all the property of the applicant and his dependents (excluded exempt assets like the residence and a car used for family transportation) will be included. Mortgages or other encumbrances will be deducted. Annual income will be included in the total Net-Worth. However, medical expenses will cancel out income in the computation, so if an applicant is in an assisted living or nursing home, income will likely not be a factor.
- Look back period: There will be a 36 month look-back period for any transfers for less than fair market value starting October 18, 2018. Such improper transfers will be penalized, meaning for a span of time after the applicant makes a claim for benefits, he will be denied Aid and Attendance benefits. The span of time he will be denied benefits will depend on the value of the transfer. Transfers of assets under the Net worth Limit or excluded assets, like a home, will not trigger a penalty period. There is a five year cap on the penalty period. Hence, a penalty period cannot be greater than five years.
- Special Needs Trust Exception: The applicant will be permitted to transfer funds to a trust for the benefit of a child who was incapable of self-support by the age of 18 without penalty.
- Annuity Danger: Annuities purchased after October 18, 2018 will receive special scrutiny and depending on the terms, may result in a penalty period. Annuity payments will also be treated as income which may also affect Net Worth eligibility.
What this all means:
There will still be plenty of planning opportunity for Veterans and their surviving spouses within the new rule changes, in both advance planning and crisis planning situations, especially in order to save the home and assets below the Net Worth limit. Planning that takes advantage of both VA and Medicaid planning will also be on the table. To explore what planning options are right for your family in the event of long-term care needs (home care, assisted living or nursing home care) contact a Cleveland elder law lawyer.