The look of disappointment is one to which I’ve become accustomed. It happens as often as not when I have to tell a client that neither Medicare nor Medical Assistance (MA) will cover the costs of assisted living. [See related articles, What You Need to Know – and What You Have to Give Up – to be Eligible for Medicaid and Don’t Underestimate the Risk of Needing Long-Term Care.] Perhaps that is what makes it that much more rewarding when I have the opportunity to share good news with Veterans who are often not aware that the Veterans Aid and Attendance (A&A) benefit actually may pay for assisted living. This benefit is applicable to individuals and their spouses who:
- Were discharged from a branch of the United States Armed Services other than dishonorably, and
- Served 90 days of continuous military service (active duty),
- With at least one day during certain wartime periods (did not have to serve in combat).
Both MA and A&A require the individual applying to meet certain medical needs. A person applying for A&A may not need to qualify medically for skilled nursing care, but they must, at a minimum, require the aid of another person in order to perform certain activities of everyday living, such as bathing, feeding, dressing, toileting and similar tasks. The applicant must be evaluated by a doctor who completes a form for the VA advising the amount of care and assistance required by the applicant.
As I write this, planning for A&A is very different from planning for MA. First, there is no look-back period for transfers of assets that will help a person to qualify for A&A. Second, while there is a bright line test for assets and income when applying for MA, there is a very unclear line for assets where A&A is concerned.
Generally speaking, outside of excluded resources such as a house and a car, you commonly hear that you need to have less than $80,000 in assets to qualify for A&A. That seems to be the rule of thumb, but the truth is that currently there is no asset limit by law and the decision to grant A&A by the VA is a subjective determination made by the claim reviewer as to whether or not the applicant’s assets are likely to last the applicant’s life expectancy.
On the income side, the applicant’s countable family income must be below a limit which changes annually. Countable income means income received by the applicant and his or her dependents. It includes earnings, disability and retirement payments, interest and dividends, and net income from farming or business. Excluded from the countable monthly income are unreimbursed medical expenses and public assistance such as SSI. The A&A benefit amount is based upon the applicant’s countable income. In 2018, the maximum A&A benefit that can be paid monthly to a single veteran is $1,830, but the veteran must have countable income of $0 to receive this amount. A portion of unreimbursed medical expenses paid by applicants serves to reduce the countable income. This is often why applicants often find themselves qualifying for A&A when they are moving into assisted living where the monthly rent, when added to other unreimbursed medical expenses exceeds their monthly countable income. But make no mistake, if the applicant is receiving in-home care and the unreimbursed medical expenses exceed the applicant’s income, A&A benefits will be granted so long as the medical report and the asset limits are approved.
Because there is no current gifting look-back period for A&A and there is a five-year look-back period for gifting for MA, planning for a client who could qualify for A&A now but might later require MA can be challenging. This is because a quick gift of assets today to get A&A could well clash with a needed application for MA in a period of less than five years.
Moreover, the VA currently has proposed regulations that have been pending for more than two years. No one knows when the regulations will be made permanent. It could happen tomorrow or in ten years. This is important because the proposed regulations instituted a three-year look-back period for gifting. No one knows if that look-back period will remain in the final regulations or not, or if the number of years will be changed from three to something else. Additionally, no one knows how applicants who have claims pending at the time of the implementation of the final regulation will be treated – under the rules when they applied or under the new regulations when the claim is determined. One positive note for applicants if the proposed regulations are made final is that the asset determination will become a fixed number, instead of the subjective determination of the claim reviewer of something less than $80,000. Under the proposed regulations, that number will be the same as the maximum community spouse resource allowance used in MA determinations. In 2017 that number was $120,900.
In the end, the VA has an accreditation procedure by which they try to ensure that applicants are being represented by counsel who is educated about the VA pension. No attorney can offer you specific advice about your eligibility requirements, even if not assisting with the application for the claim through the VA, if he or she has not been accredited by the VA. Any attorney can, however, provide general advice unrelated to a specific claim whether or not he or she is accredited by the VA. Finally, no one attorney, organization. or layperson can charge you a fee for preparing your application for VA benefits.
It seems fitting that I prepare this article around the week of Memorial Day. Over the course of my practice, I have worked with many veterans. Hearing their stories of sacrifice, loss, and life-changing experiences against the backdrop of their pride and loyalty for our country has moved me to do my part to help these special citizens and become accredited by the VA to represent clients in Veteran’s Administration proceedings.
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