First, the rules impose a clear asset limit of $123,600 to establish eligibility for the aid and attendance program. The VA defines “assets” as the fair market value of countable resources less any mortgages or liens plus the applicant’s annual household income. Unreimbursed medical expenses in excess of 5% the maximum annual pension rate will still be deducted from annual income.
In deciding what expenses will qualify as medical expenses to be deducted, the VA will now require a statement from a physician or qualified medical professional that home care is required for those payments to be deducted. Payments to assisted living or other facilities that include meals and lodging will be included as long as health or custodial care is also included in the payment.
The rules also clarify the treatment of a residence, stating that a primary residence will be an excluded asset, even if the applicant is not residing there. However, the definition of primary residence is limited to a lot size of two acres. Any land above two acres will be counted as an asset. The rules also exclude the proceeds from the sale of a primary residence if they are used to purchase another residence in the same calendar year.
Finally, the VA will impose a penalty period on any gifts made within thirty-six months of an application for VA benefits. This penalty will apply to any gifts made after October 18, 2018. The number of penalty months is calculated by dividing the amount gifted by the maximum annual pension rate. The applicant will not be eligible to receive benefits during the penalty period. There is a maximum penalty of five years.
While the lookback period on gifts is an unwelcome change, the certainty that the new rules provide to applicants may make an application for VA benefits a more viable option for some.
Contact Jennifer at 574.232.3538 or email jvanderveen@thklaw.com for an appointment if you need help planning for the future using your VA benefits.
Author: Jennifer L. VanderVeen is a certified elder law attorney (CELA) at Tuesley Hall Konopa, LLP where she counsels clients on long term care planning, Medicare, Medicaid, veterans benefits applications, guardianships, special needs trusts, and complex estate planning issues. Jennifer frequently speaks to community groups on caregiver responsibilities and caregiver burnout.
You can contact Jennifer by calling 574.232.3538 or by email jvanderveen@thklaw.com.
Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon an investigation of specific facts. You should consult an attorney for advice regarding your individual situation. All THK blogs are considered advertising material by the Indiana Bar Association.