Veterans face new limits on long-term care help

The U.S. Department of Veterans Affairs offers a pension benefit to low-income veterans (and their spouses) who are in a nursing home 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 might be eligible for Aid and Attendance should probably talk to a lawyer 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 now says it will soon adopt 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 will now add together both a veteran’s assets and his or her annual income in determining whether he or she meets the $119,220 test.

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 regulations also establish 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, and this period can last as long as 10 years. 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.

Under the new rules, 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’s not clear yet when the new regulations will officially take effect, but it appears that some Veterans Affairs offices are already processing applications under the new rules. If you’re considering applying for Aid and Attendance benefits, you should act quickly and contact an attorney for help.

Contact us if we can help you in any way.