Many veterans don’t realize that they may be eligible for additional benefits from the Veterans Administration. The Veterans Administration offers many types of benefits, from service connected benefits to low-income pension benefits.
Service Connected Benefits
A Veteran may be entitled to compensation as a result of a service-connected disability. Compensation is paid to a service member for an injury or disease that occurred during service or is service-connected. The amount of the compensation is based on the veteran’s disability rating. Disability compensation is not taxable income and there is no asset or income limitation.
Non-Service Connected Pension Benefits
The Veterans Administration also has a needs-based pension program for low-income veterans. This program is unrelated to service-connected injuries and there is no disability rating requirement.
The VA pension program provides payment to a service member who served during a period of war, is disabled and has limited income and resources. The pension amount varies depending on the veteran’s other income. Like disability compensation, VA pension income is not taxable.
The Aid and Attendance program is part of the needs-based pension program. Aid and Attendance benefits provide a non-service connected pension benefit for veterans who need assistance with the activities of daily living, such as bathing, feeding, dressing, attending to the wants of nature, adjusting prosthetic devices and/or protecting the veteran from the hazards of his daily environment.
A veteran, his/her spouse or a surviving spouse of a veteran can qualify for Aid and Attendance benefits if they reside in an assisted living facility or if they are living at home and require the assistance of another individual, such as a home health care aide.
Aid and Attendance Pension Benefit Requirements:
To qualify, the veteran must have had ninety (90) days in service, one (1) day of which must have been during a period of war. Even if the veteran never left the United States, he may still qualify as long as he meets these service requirements. In addition, the veteran must have been discharged under conditions other than dishonorable.
The veteran must also qualify financially for Aid and Attendance benefits. The general guideline is that the applicant must have less than $80,000 in resources (not including the primary residence and car). There is no penalty for asset transfers. As such, with proper planning, a veteran can become financially eligible for the pension benefit.
As a need-based pension program, the veteran does not have to have a service connected disability or a disability rating to qualify for aid and attendance benefits. However, the veteran must be determined to be permanently and totally disabled at the time of application. A veteran who resides at an assisted living facility may be entitled to aid and attendance, if the veteran receives assistance with the activities of daily living.
Pension Benefits Available for a Surviving Spouse
A surviving spouse may be entitled to a veteran’s pension provided she was married to the veteran at the time of the veteran’s death. The veteran must have met all of the above service criteria. There is no age restriction for the widowed spouse.
If the surviving spouse remarries after the death of the veteran, eligibility is terminated. Further, the surviving spouse cannot have been divorced from the veteran and must have been married for at least one (1) year prior to the veteran’s death.
To be eligible for Aid and Attendance pension benefits, the veteran’s income cannot exceed the maximum annual pension rate (see below). However, monthly income can be reduced by deducting unreimbursed medical expenses, such as the cost of: assisted living; adult day care; group home; rest home; nursing home; in-home attendants; insurance premiums including health, medi-gap and long term care insurance; non-prescription drugs if physician directed; hearing aides; eyeglasses; Depends; Ensure; co-pays, dentures; and therapy.
Veterans Benefits and Medicaid Eligibility
Veterans and their families must be careful of the Medicaid consequences of planning for VA pension benefits. While transfers of assets do not incur a penalty period for veterans pension purposes, such transfers will result in a penalty for Medicaid eligibility purposes.
For example, Mr. White, a veteran, transfers assets in the amount of $100,000 to a trust and $50,000 outright to his children in order to reduce his assets to the $80,000 limit for Aid and Attendance benefit purposes. Mr. White moves into an assisted living facility, the cost of which he is able to meet with the help of the Aid and Attendance program. Two (2) years later, Mr. White’s health deteriorates and he requires care in a nursing home. Mr. White will not be eligible for Medicaid benefits for approximately fifteen (15) months after he enters the nursing home based upon the $150,000 he transferred two (2) years ago. Mr. White will have to find a way to pay for his care in the nursing home for the next fifteen (15) months.
With proper planning with an Elder Law attorney, this unintended consequence can be avoided. As always, be sure to consult with an experienced Elder Law attorney before engaging in any asset protection planning – whether it be for veterans benefits or Medicaid benefits.
Cona Elder Law is proud to report that our attorneys are not only experienced Elder Law and Estate Planning attorneys, but are also accredited for the preparation, presentation and prosecution of claims for veterans benefits before the Department of Veterans Affairs.