RALPH S. ROBBINS, CFP©
A CERTIFIED FINANCIAL PLANNING PRACTITIONER
elder care financial planning
View an informative introductory video:
CAUTION: Obtaining a VA Improved Pension with Aid & Attendance award can be very tricky (technical term!). Application missteps, however inadvertent, can cause long delays in an already lengthy process (issuance of awards may normally take anywhere from as little as 30 days to up to 12 months).
Overall, eligibility requirements for this benefit are much more fluid than other public benefits. This can be better or worse for the applicant depending on the circumstances.
If, after reviewing the information below, you suspect that you or your loved one may not qualify due to health, income, or assets call me for a free initial consultation before applying.
If an application is denied you may have to wait a full year before re-application is possible!
va IMPROVED PENSION WITH AID AND attendance
On December 16, 2006, then Secretary of Veterans Affairs Jim Nicholson issued a press release which read, in part, as follows:
Secretary Nicholson: VA Reaches Out
to Veterans and Spouses
“Aid and Attendance” an Under-Used Benefit
WASHINGTON – The Department of Veterans Affairs (VA) is reaching out to inform wartime veterans and surviving spouses of deceased wartime veterans about an under-used, special monthly pension benefit called Aid and Attendance.
“Veterans have earned this benefit by their service to our nation,” said Secretary of Veterans Affairs Jim Nicholson. “We want to ensure that every veteran or surviving spouse who qualifies has the chance to apply.”
The Aid and Attendance Pension can provide up to $1,519 per month to a veteran, $976 per month to a surviving spouse, or $1,801 per month to a couple.*
Although this is not a new program, not everyone is aware of his or her potential eligibility. The Aid and Attendance pension benefit may be available to wartime veterans and surviving spouses who have in-home care or who live in nursing-homes or assisted-living facilities.
Many elderly veterans and surviving spouses whose incomes are above the congressionally mandated legal limit for a VA pension may still be eligible for the special monthly Aid and Attendance benefit if they have large medical expenses, including nursing home expenses, for which they do not receive reimbursement.
To qualify, claimants must be incapable of self support and in need of regular personal assistance.
*2006 benefit numbers; see below for current benefit rates.
Despite the publicity, the Aid and Attendance pension is still not as well known as it should be, particularly among those who need it the most.
what are aid and attendance benefits?
"Aid and Attendance" is technically known as "Improved Pension with Aid and Attendance". It is paid by The Department of Veteran Affairs (VA) directly to eligible veterans or surviving spouses who then, in turn, pay providers.
It is paid in addition to, and cannot be awarded without eligibility for, a VA Basic Improved Pension (see below).
Aid and Attendance is awarded to applicants who need financial help paying for Unreimbursed Medical Expenses; typically long-term care expenses incurred in the home, an assisted living facility, or a nursing home.
It is a non-service connected disability benefit in that the claimant's incapacity or disability does not have to be a result of service. Non-service and service-connected compensation (disability) cannot be received at the same time (the veteran may choose the higher award). Aid and Attendance benefits are paid to those applicants who:
Who is eligible for VA BASIC IMPROVED Pension?
A VA Improved Basic Pension benefit is awarded to wartime veterans who have limited or no income and who are at least 65 years old or, if under 65, are permanently or completely disabled.
There is also a "Death Pension" benefit (their term) available to the surviving spouse of a deceased wartime veteran who was married to the veteran at the time of his/her death and has not remarried. A disabled child of a deceased veteran may also be eligible.
What are the Service Requirements VA Improved Pension?
A veteran or the veteran's surviving spouse may be eligible if the veteran:
World War I - April 6, 1917 through November 11, 1918
World War II - December 7, 1941 through December 31 1946
Korean War - June 27, 1950 through January 31, 1955
Vietnam War - August 5, 1964 (February 28, 1961 for veterans who served "in country" before August 5, 1964) through May 7, 1975
Persian Gulf War - August 2, 1990 through a date to be set by Presidential Proclamation or Law.
If the veteran entered active duty after September 7, 1980 he or she must generally have served at least 24 months of the full period for which called or ordered to active duty (there are no exceptions to this rule).
What are the Disability Requirements for va improved pension with Aid and Attendance?
Veterans, spouses of veterans, or surviving spouses can be eligible for Aid and Attendance benefits if they meet the following disability requirements:
What are the Income Requirements for improved pension with Aid and Attendance?
The claimant's countable family income must be below a yearly limit set by law. Countable Income means income received by the claimant, his or her spouse, and dependents living in the household. It includes earnings, disability and retirement payments, interest and dividends, and net income from farming or business. A claimant must report all income but the VA will exclude any income that the law allows. Public assistance, like SSI, is not counted as part of countable income (but Social Security is). The annual income limits for the Aid and Attendance program are higher than those set for the basic pension. The maximum Aid and Attendance benefit that can be paid monthly to a single veteran is $1,794, but the veteran must have countable income of $0 to receive the maximum benefit.
The following chart includes the yearly income rate/annual pension Aid and Attendance limit set by Congress on December 1, 2016 for 2017; it also includes the maximum monthly benefit:
Countable Income and Unreimbursed Medical Expenses
Most applying for Aid and Attendance have some countable income (e.g. Social Security) but there are exclusions that may reduce countable income and thereby increase award amounts. Mostly, these are a portion of unreimbursed medical expenses paid by claimants.
Unreimbursed medical expenses can include: the cost of a long-term care institution or assisted living facility, health related insurance premiums (including Medicare premiums), diabetic supplies, private caregivers, incontinence supplies, prescriptions and dialysis not covered by any other health plan. Only the portion of unreimbursed medical expenses that exceed 5% of the MAPR (see above) may be deducted. Therefore, referencing the chart above, a single veteran could only deduct from annual income those expenses that exceed $987.
What are the Asset Requirements for Aid and Attendance?
Whereas VA pensions are a needs-based benefit, Net Worth (the net value of the applicant's assets or, in VA parlance, "estate") also affects eligibility. Personal goods are exempt from the net worth calculation. These goods include the home, a vehicle used for the care of the claimant, and household goods and personal effects such as clothes, jewelry and furniture. Unlike Medicaid qualification, spousal assets are included. Also unlike Medicaid, IRA's or other qualified plan benefit principal is included in calculating total assets.
Unfortunately, there is no asset limit set by law, and the determination of eligibility can be made at the discretion of a VA caseworker. An asset limit of $80,000 is often incorrectly quoted as a maximum asset limit. $80,000 is the maximum a VA caseworker can consider as exempt before the case must be referred to a superior but it is by no means applicable to all cases.
Assets are considered along with life expectancy and care costs in determining asset qualification. So, for example, $80,000 in assets may be considered a reasonable asset retention limit for a 70 year old with large medical expenses (though not likely) but a disqualifying level for a 90 year old with smaller expenses.*
How do you Apply for Veterans Affairs Benefits?
Applying for the VA Improved Pension with Aid & Attendance is often complicated and it may take longer than six months to receive an award even with a "clean" application. Benefits, however, are retroactive to the month after the application was filed.
If you feel that no planning is required with regard to income or assets, you can apply on-line, download forms at the VA website, or you may consider using resources provided at no cost by County Veteran Service Officers.
Keep in mind, however, that neither the VA nor Veteran Service Officers are required to offer advice with respect to income and assets and it is not infrequent that misinformation is received from VA toll free numbers and from many veteran service offices (as has been reported to me over and over again throughout the years).
More on assets and eligibility
* The qualifying asset level is a point of much confusion brought on primarily by misinformed and ill qualified advisors. It seems to stem from unfamiliarity with the VA claims adjudication manual M21-1MR which, apparently, few take the time or bother to read. So for the sake of clarity, please consider the following:
No where in statute or regulation does it state what amount of assets constitutes 'too much' for VA purposes. Regulation states that 'the terms corpus of estate and net worth mean the market value, less mortgages or other encumbrances, of all real and personal property owned by the claimant, except the claimant's dwelling (single family unit), including a reasonable lot area, and personal effects suitable to and consistent with the claimant's reasonable mode of life.' [38 CFR 3.275(b)]
It further states that: 'In determining whether some part of the claimant's estate (or combined estates under §3.274 (a) and (e)) should be consumed for the claimant's maintenance, consideration will be given to the amount of the claimant's income together with the following: Whether the property can be readily converted into cash at no substantial sacrifice; life expectancy; number of dependents who meet the definition of member of the family (the definition contained in §3.250(b)(2) is applicable to the improved pension program); potential rate of depletion, including unusual medical expenses under the principles outlined in §3.272(g) for the claimant and the claimant's dependents.'[38 CFR 3.275(d)]
In terms of evaluation, the VA states: 'Pension shall be denied or discontinued when the corpus of the estate of the veteran, and of the veteran's spouse, are such that under all the circumstances, including consideration of the annual income of the veteran, the veteran's spouse, and the veteran's children, it is reasonable that some part of the corpus of such estates be consumed for the veteran's maintenance.'
Therefore, the question facing the claim processor is: 'Is it reasonable that a portion of the claimant's estate be consumed for their maintenance?'
To help the VA adjudicator processing the claim to make this decision the VA makes it very clear that several factors are taken into consideration when determining what is a 'reasonable' amount of estate or assets.
In the same section of the manual the VA states that any amount of assets can prove a bar to benefits and in a special note to the adjudicator, the VA staff member is told that the older a claimant is, the less assets they are expected to have.
There is absolutely no amount set. There is no formula used. There is no indication of how much is 'too much.' It is a totally subjective process by the individual adjudicator.
Through experience and by careful examination of individual circumstances, we can suggest the optimal level of assets that will result in the quickest and highest award.