VA Aid and Attendance
Many veterans and their families assume that there are no benefits for veterans unless they were either wounded in combat or suffered a service-connected disability. This is incorrect.
If you are an honorably discharged veteran who served at least one day during a period of wartime and if you are in an assisted living facility or are spending a significant amount each month for care in your home, then you may quality for benefits under the VA Aid and Attendance program. This program is one of the VA's best kept secrets.
Aid and Attendance is available to a veteran who is disabled, and has the additional requirement of needing the assistance of another person in order to avoid the hazards of his or her daily environment (for example, the veteran needs someone to help him or her bathe, dress, and otherwise take care of himself or herself).
The amounts of the Aid and Attendance benefit are shown in the chart below. The amounts are usually adjusted annually.
Annual Benefit Amount
|Widow(er) of Veteran||$13,788|
The service requirements for the veteran are:
NOTE: Service in combat is not required, only that the veteran was on active duty anywhere during wartime.
"Wartime Period" as defined for the Aid and Attendance program is as follows:
|Period of War||Beginning and Ending Dates|
|World War II||December 7, 1941 through December 31, 1946|
|Korean Conflict||June 27, 1950 through January 31, 1955|
|Vietnam Era||August 5, 1964 through May 7, 1975; for veterans who served “in country” before August 5, 1964, February 28, 1961 through May 7, 1975|
|Gulf War||August 2, 1990 through a date yet to be set by law or Presidential Proclamation|
Medical Needs Test
The applicant must have a medical need for assistance or supervision due to their disability. The applicant must be in need of the "aid and attendance of another person". This must be proven through medical evidence. This is accomplished primarily by a doctor’s evaluation of the veteran or the surviving spouse. There is a specific form that must be filled out. However, it is important that the form be reviewed by someone familiar with the Aid and Attendance program prior to submission to the VA because if the applicant's medical needs are not outlined properly, benefits can be denied.
The household income of the veteran or the surviving spouse cannot exceed the "Maximum Allowable Pension Rate." In plain English this means monthly income cannot exceed the applicable monthly benefit amount. Unfortunately, often when veterans find this out, they conclude that their income is too high to be eligible for Aid and Attendance.
But the insider secret that most veterans do not know and that the VA often does not tell the veteran or surviving spouse is that they can reduce gross income by any un-reimbursed medical expenses when determining whether they meet the income test. This includes in-home care or the cost of assisted living if the applicant is residing in an assisted living facility. Other common medical expenses are: Medicare premiums deducted from the veteran’s social security each month, Medicare supplemental insurance premiums, prescription drug insurance and co-pays.
The income test can be expressed as the following formula:
Gross Annual Household Income
Minus Unreimbursed Medical Expenses (Annualized)
Equals Net Income for Veterans Administration Purposes (“IVAP” in VA jargon)
Another insider secret is that payments made by the veteran or surviving spouse under a "personal care contract" can be considered an unreimbursed medical expense and deducted from gross income. A personal care contract is a contract between the veteran or surviving spouse and a family caregiver where the caregiver provides certain services in return for compensation
Millions of Americans are currently caring for an elderly family member without receiving compensation. Most do not realize that the care they are providing is just as valuable and worthy of payment as care given by a for-hire service. The thought does not even enter their minds because they are providing the care out of love and affection. But the point of entering into the personal care contract is not for the caregiver to make money; the point is to create a "legal expense" where one did not exist before for the purpose of lowering countable income in order to be eligible for the Aid and Attendance benefit. Many of our clients to whom we recommend this strategy do not spend the money paid to them under the personal care contract; they hold it for the family member in case he or she should need it during the rest of his or her life.
The Asset Test
It is generally believed that, as a rule of thumb, a veteran’s household assets cannot exceed $80,000 if married or $50,000 if single. However, there is no specific asset limit in the VA regulations. The decision as to allowable assets is called "age analysis." It is meant to take into consideration the life expectancy of the veteran and to extrapolate the veteran’s income needs over that life expectancy. Therefore, it is often the case that an older person is allowed to keep fewer assets than a younger person. We generally recommend that our clients keep assets equal to 18 to 24 months of monthly income shortfall. For example, if the veteran, after considering his or her income and benefits, is going to be short $2,000 a month then he or she could have up to $48,000 in assets.
The home, personal property, and one automobile are exempted from the asset test. Included in the asset test are cash, savings and checking accounts, IRA’s, CD’s, cash value of life insurance, stocks, bonds, annuities, investment real estate, vacation homes, and all other forms of investment.
If the applicant has too many assets, assets can be gifted. Unlike Medicaid, there is currently no penalty imposed by the VA if the applicant gifts assets. (However, we expect that a 3 year look back period will be enacted sometime during 2016.) However, the applicant must keep in mind that the VA is not going to pay the full cost of nursing home care. Therefore, if the veteran should to go to a nursing home and needs to apply for Medicaid within five years, the gift made for VA purposes can cause Medicaid disqualification. This is because Medicaid imposes a five year look-back period and imposes penalties on gifts made within that look-back period. An elderly veteran cannot lose sight of the fact that he or she may need Medicaid to pay for a nursing home one day. Coordinating the asset protection planning to maintain eligibility for both VA Aid and Attendance and Medicaid is tricky business. An experienced Elder Law attorney can coordinate both VA benefits and Medicaid benefits to preserve eligibility for both programs.
Conclusion and Caution
The Aid and Attendance application process is very complicated.
The VA now requires that anyone who assists a veteran or surviving spouse of a veteran with the preparation, presentation, and prosecution of a claim for Aid and Attendance must be accredited by the VA before they can legally provide assistance. Thus to protect yourself while going through the Aid and Attendance application process, make sure you are using an accredited agent. Henry Levandowski and Maria Darpino are both accredited attorneys with the VA administration.
It cannot be stressed enough that while gifting is allowed for VA purposes, it is not allowed for Medicaid purposes. Most veterans who need Aid and Attendance will eventually need Medicaid to pay for nursing home care. Veterans must be careful to preserve Medicaid eligibility. A qualified Elder Law attorney can provide this critical guidance.
The only other common source of information regarding this benefit generally comes from annuity sales people, who offer to consult with veterans and their families for free. This “free offer” is based on their strategy of counseling the veterans to meet the assets and income limitations of the Aid and Attendance benefit by buying an annuity and giving away their assets to their children. They will also offer to assist the veteran in filing the VA benefit claim forms.
In reality, the annuity salesperson is being compensated by the annuity company for selling a financial product to the veteran. While an annuity may be a good financial decision, it may also be a poor one, depending on your circumstances. My message here is that you should seek independent advice before making a decision to purchase an annuity or transfer assets. You should plan your estate using the resources that are right for you, instead of a one size fits all annuity...because one size does NOT fit all.
Also, many attorneys, (even some Elder Law attorneys!) do not know about VA Aid and Attendance benefits. In addition, many attorneys may label themselves as Elder Law attorneys because they can prepare simple things such as wills, but, unless they are working with seniors on both Medicaid and veterans benefits everyday, they are most likely not versed in the complicated and ever changing maze of laws that surround these benefits. This is dangerous territory. You need a trustworthy guide who has traveled this path before, and travels it on a regular basis.
At Levandowski & Darpino, we specialize in helping families during this difficult time. It is a complicated area of law with a lot of pitfalls for the unwary. We make sure our client’s journey goes as smoothly as possible.
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