INDUSTRY INSIGHT
LONG-TERM CARE
SPONSORED CONTENT
NEW RULES MAKE IT
HARDER FOR VETERANS TO
QUALIFY FOR LONG‑TERM
CARE BENEFITS
T
he Department of Veterans Affairs (VA) has finalized
new rules that make it more difficult to qualify for
long-term care benefits. The rules establish an asset
limit, a look-back period, and asset transfer penalties
for claimants applying for VA pension benefits that require
a showing of financial need. The principal benefit for those
needing long-term care is Aid and Attendance.
The VA offers Aid and Attendance to low-income veterans
(or their spouses) who are in nursing homes or who need help
at home with everyday tasks like dressing or bathing. Aid and
Attendance provides money to those who need assistance.
Currently, to be eligible for Aid and Attendance, a veteran
(or the veteran’s surviving spouse) must meet certain income
and asset limits. The asset limits aren’t specified, but $80,000 is
the amount usually used. However, unlike with the Medicaid
program, there historically have been no penalties if an applicant
divests him/herself of assets before applying. That is, before now,
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you could transfer assets over the VA’s limit before applying for
benefits and the transfers would not affect eligibility.
This is not the case anymore. The new regulations set a net
worth limit of $123,600, which is the current maximum amount
of assets (in 2018) that a Medicaid applicant’s spouse is allowed
to retain. However, in the case of the VA, this number will include
both the applicant’s assets AND income. It will be indexed to
inflation in the same way that Social Security increases. An
applicant’s house (up to a two-acre lot) will not count as an
asset, even if the applicant is currently living in a nursing home.
Applicants will also be able to deduct medical expenses, which
now include payments to assisted living facilities as a result of
the new rules, from their income.
The regulations establish a three-year look-back provision.
Applicants will have to disclose all financial transactions they
were involved in for the three years prior to their application.
Those who transferred assets to put themselves below the net
worth limit within three years of applying for benefits will be
subject to a penalty period that can last as long as five years.
This penalty is a period of time during which the person who
transferred assets is not eligible for VA benefits. There are
exceptions to the penalty period for fraudulent transfers and for
transfers to a trust for a child who is unable to “self-support.”
Under the new rules, the VA will determine the penalty period
in months by dividing the amount transferred that would have
put the applicant over the net worth limit by the maximum
annual pension rate (MAPR) for a veteran with one dependent
in need of aid and attendance. For example, assume the net
worth limit is $123,600 and an applicant has a net worth of
$115,000. The applicant had transferred $30,000 to a friend
during the look-back period. If the applicant had not transferred
the $30,000, his net worth would have been $145,000, which
exceeds the net worth limit by $21,400. The penalty period
will be calculated based on $21,400, the amount the applicant
transferred that put his assets over the net worth limit (145,000
minus 123,600).
The new rules went into effect on October 18, 2018, and the
VA will disregard asset transfers made before that date. Veterans
or their spouses who think they may be affected by the new
rules should contact an elder law attorney immediately.
Carrie Conboy is an associate attorney with the elder
law firm of Zacharia Brown P.C.
Zacharia Brown is one of the oldest, most established
elder law firms in western Pennsylvania. The practice
focuses on Medicaid eligibility, Veterans Benefits
planning, estate administration, and estate planning
including wills, powers of attorney, living wills,
and trusts. Pittsburgh-area office locations include
McMurray, McKeesport and Wexford.
Phone: 724.942.6200
Website: www.pittsburghelderlaw.com
E-mail: [email protected]
NORTH ALLEGHENY
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WINTER 2018
9