Special Improved Pension Benefit for

Veterans

by Jim Schuster Certified Elder Law Attorney

Improved Pension Benefit for Veterans and Surviving Spouses

Many Veterans who served during a period of war are unaware that they may be eligible for a monthly benefit even if they do not suffer from a service connected disability. The program is the special improved pension, often known as “VA Aid and Attendance” (A&A).  A&A is the highest level rating.  The lowest level is basic pension, the next step up is Housebound.

Eligibility for the Improved Pension

To be eligible for the pension program, a veteran must  be “permanently and totally disabled” because of a non-service related condition. Being age 65 and over satisfies this condition. The veteran must have served 90 days on active duty (the requirement is longer for more recent veterans), with at least one day during a wartime. Discharge must have been under conditions other than dishonorable.

Periods of Wartime Service:

WWII: December 7, 1941-December 31, 1946.  Korean Conflict: June 27, 1950- January 31, 1955.  Vietnam Era: August 5, 1964 – May 7, 1975 (February 28, 1961, for veterans who served “in country” before August 4, 1964). Persian Gulf War: August 2, 1990 – TBA

Aid and Attendance Rated

To be aid and attendance rated  a veteran must require “care or assistance on a regular basis” that  protects him or her from dangers of a daily living environment. The rating can be established by showing one, or more, of the following conditions:

  • the veteran is blind or has a visual impairment of 5/200 or less in both eyes or concentric contraction of the visual field to five degrees or less;
  • the veteran is a patient in a nursing home or hospice facility because of mental or physical incapacity;
  • the veteran is unable to dress or undress or keep himself or herself clean and presentable;
  • the veteran needs adjustments to any special prosthetic, orthopedic appliance, or is not able to attend to the wants or nature of the prosthetic, or appliance, or;
  • the veteran has a physical or mental incapacity that requires assistance on a regular basis to protect the veteran from the hazards of his or her environment.

Furthermore, it is generally presumed that a veteran who is residing in an assisted living facility does meet one, or more, of the aforementioned conditions. A letter from the veteran’s personal physician must substantiate the veteran’s disability and need for assistance and that the facility meets those needs.

Current A&A Monthly Pension Benefits:

The current maximum monthly A&A pension benefits are:

  • Veteran & Spouse: $2,127.00
  • Veteran: $1,794.00
  • Surviving Spouse: $1,152.00

However, the actual  monthly pension benefit is determined by the total monthly income of the veteran and/or the veteran’s spouse, less the total monthly cost of “unreimbursed medical expenses” of the veteran.  The expenses of the spouse do not count.

Unreimbursed Medical Expenses

Unreimbursed medical expenses (UME) are generally defined to include the costs associated to health and Medicare insurance premiums, prescription drugs, dental and vision care, and expenses related to an assisted living facility, an in-home care aid, and/or adult day care.  The first 5% of UME is disregarded.

Benefit Calculation

Once the UME are deducted from the vet’s income the result is “income for VA purposes (IVAP).  When IVAP is deducted from the Vet’s income the result is compared to the A&A rated income level.   Suppose a single vet has an IVAP (net income after deduction of UME) of $1,000. after the 5% reduction.  That means he should get assistance at the rate of $794 per month. That is the result of deducting $1,000 from $1,794 the A&A income level for a single vet.

You might note that we said above, the medical expenses of the spouse do not count.  The reason is only the vet can claim during the vet’s lifetime.  The spouse can claim only as a “surviving spouse” after the veteran’s death.  Suppose the vet’s wife has dementia and is in an assisted living facility?  Can the he claim for a benefit?  Yes, he may claim for Basic pension.  Here’s an example.  Suppose the Vet and spouse have a combined income of $2,500 per month. And suppose her assisted living bill is $4,000 per month.  The vet will have an IVAP of $0 so he would qualify for the full Basic pension allowance of $1,075 per month.

Net Worth Valuation

Assuming a veteran or his/her surviving spouse has tentatively qualified for the A&A monthly pension benefit on the basis of income, the next consideration is the net worth of the applicant. With the exception of the applicant’s home, an automobile, traditional household furnishings and personal property, which are treated as exempt. Unlike Medicaid, there are no clear markers. The amount depends on the VA’s estimation of how much the Veteran needs for life. For example, consider two veterans with the same income and UMEs. One is 75 and the other is 90 years old. The younger veteran will be considered to need more net worth. A veteran above the age 90 would be allowed much less. Some practitioners say $10,000 is too much net worth for a vet over 90.

A&A Pre-Planning

Pre-planning for the benefit is recommended. The Veterans Administration only looks at the applicant’s net worth at the time of the actual A&A application. At this time there is no “look back period” for the transfer of assets prior to the application.  However a transfer of assets after a claim is made can result in a denial or loss of benefits.

There has been a bill in Congress to impose a three year look back, but it has gone nowhere. The VA proposed regulations with similar provisions.  They never made them final.  Until a change is made in the VA rules, just about any veteran of any net worth can financially qualify for a monthly A&A pension benefit with proper planning as long as the IVAP test is met.

Veterans Benefit Planning May Conflict With Medicaid 

The rules of the Veterans A&A program regarding asset transfers conflict with the Medicaid program. Medicaid pays for long term care in a nursing home. Medicaid has a “five year lookback” on asset transfers. The VA program has none. Pre-planning for the VA program can wreak havoc if the veteran needs nursing home care within five years.

If the Medicaid application were made less than five years after the asset transfers made to qualify for the Veterans program, then a Medicaid divestment penalty must be dealt with.  All assets would need be returned, or the application be held off till after the five years or other corrective action be made. One can see that trying to satisfy the rules of both programs is like riding two horses. It can be done with difficulty.

When should you see an attorney?

It is clear that the poor vet needs no help from an elder law attorney to arrange his affairs to coordinate with the requirements of the VA Pension program.   Those who have significant assets must be much more careful.  It is very important that these vets engage a qualified elder law attorney when developing a total Long-Term Care Plan.

Jim Schuster, Certified Elder Law Attorney,  Livonia, MI (248) 356-3500 www.JimSchuster.com

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