By:  Gina Salamone

In recent months, the Department of Veterans Affairs (VA) has initiated sweeping changes to the process for appealing decisions, as well as to the Veteran’s Aid and Attendance Benefits program.

The Aid and Attendance Benefit is a monthly pension offered to wartime veterans or their surviving spouses who require long-term care and can show financial need.  The benefit is used most commonly by seniors who are paying for in-home care or who live in an assisted living or memory care facility and are having trouble affording the cost.  This tax-free monthly benefit can be over $2,000 and allows some seniors to afford long term care from their income alone.

In order to qualify for the benefit, the applicant’s net worth (which includes assets and income) as well as their care needs and costs are examined.  Only those who can show physical and financial need will receive the benefit.

In the past, a major criticism of the program has been that the asset limits were not clearly defined, resulting in individual applicants being treated differently depending on who was deciding their claim.  Beginning in October 2018, the new rules implemented a defined assets limit of $123,600 with increases expected each January (currently$127,061).  The home is exempt and not included in net worth. This change allowed many veterans, who would have otherwise been denied benefits, to qualify.  The asset limit is the same whether a single person or a couple is applying.

Additionally, the VA implemented a three year look-back period and will be assessing penalties for gifting assets, creating irrevocable trusts and purchasing annuities.  The look-back period and penalties were modeled after Medicaid’s rules but are significantly different.    Although the look-back period is only three years, without careful guidance during the application process, an applicant can unnecessarily find themselves in a penalty up to five years.  Because of the addition of  the look-back period and penalties, we recommend that, if possible, potential applicants seek guidance well in advance in case pre-planning is needed.

For clients who may have implemented planning in the past, these provisions only apply to occurrences after October 18, 2018.  This means that transfers to irrevocable trusts, gifts to children and annuity purchases prior to that date will not be subject to penalties.

Other notable changes to the Aid and Attendance Benefit program is that the VA better defined and expanded what could be considered a medical expense.  Unlike in the past, the cost of an Independent Living Facility can sometimes be considered a medical expense.

In addition to changes to the Aid and Attendance program, the VA completely revamped their appeal process which has long been considered confusing and slow—sometimes taking years to navigate. Implemented on February 19, 2019, President Trump signed the Veterans Appeals Improvement and Modernization Act of 2017.  This newly revamped process will apply to both Aid and Attendance claims and to Compensation claims (for service-related disabilities).

Under these rules, veterans are given three options for how they can appeal their case.  Under the first option, the veteran can ask for a higher-level review by a senior claims adjudicator who will review the case for errors.  The second option allows the veteran to file a supplemental claim wherein new evidence can be introduced to support his or her claim.  Under the third option, the veteran can appeal directly to the Board of Veterans’ Appeals where the opportunity is available to submit new evidence and/or have a hearing before a Veterans Law Judge. Finally, the veteran may choose to have their current case remain in the “Legacy” System.

Our firm is dedicated to helping our clients implement sound legal planning. If we can help in any way, please don’t hesitate to contact our office at (630) 221-1755.