Are there any pivotal legal changes coming down the pike affecting veterans' benefits?
Much like the Medicaid program, there are a certain number of veterans' benefits that are available to those who meet certain financial eligibility criteria. However, the rules surrounding needs-based veterans' benefits are somewhat variable from the rules surrounding eligibility for Medicaid coverage – primarily within the context of divestment of assets, or “spending down” assets to qualify.
Medicaid has a 60 month look-back period. When an application for Medicaid is filed, gifts, transfers, and sales of property for less than fair market value that occurred within 60 months of applying for Medicaid must be reported. If such transactions have occurred, a divestment penalty may be applied, meaning that even though an elder qualifies for Medicaid now, Medicaid will not pay for their care due to the divestments that occurred up to 5 years ago. By contrast, the Department of Veterans Affairs traditionally has not had a lookback period, meaning such gifts, transfers or sales of property for less than fair market value were not as much of an issue when applying for Aid and Attendance benefits for veterans or their surviving spouses. Aid and Attendance is a very useful benefit that can help pay for long-term care expenses at home, in an assisted living facility. or a nursing home.
However, in a disappointing move, the Veterans Administration is now considering whether to tighten the reins on these benefits, and may be imposing divestment restrictions similar to those imposed by Medicaid regulations. This would limit access to important benefits for wartime veterans and their surviving spouses. Under the proposals, a married couple would only be eligible for benefits if their combined assets do not exceed certain amounts, which have yet to be determined, but excluding their vehicle and homestead. Moreover, the VA would examine applicants' financial records and could impose an eligibility penalty should it find any asset transfers within the 36 months immediately preceding the application. Under current proposals, the penalty period could be up to ten years, depending on the value of the transfer.
Moreover, the law does not take into account genuine gifts or charitable donations – and could impose a penalty period for either in the event the transfer took place within the three years immediately preceding the application for benefits. As well, opponents of the changes point out that the asset limit is a hardline threshold regardless of whether the veteran fought in Vietnam or World War II. In other words, the rules do not take into account a veteran's age when determining whether income and assets are “excessive.”
If you have questions about qualifying for Aid and Attendance for purposes of long-term care planning, please feel free sure to contact Andrew Byers, Attorney & Counselor at Law: 248-301-1511.