The Veteran's Administration has published new rules regarding Aid and Attendance eligibility. These rule changes were long anticipated, but now become effective October 18, 2018, thirty days after publication which occurred on September 18th, 2018. Applications and transfers prior to that date are governed by the old rules.
THE NEW RULES
Three-Year Look-Back For Asset Transfers: Beginning October 18, 2018, there will be a 3-year look back on asset transfers for less than fair market value. Previously you could transfer assets in one month, and apply for benefits the next month with no look back at all. The 3-year look back has eliminated the option of last-minute planning with immediate benefits. Note however, that any transfer prior to October 18, 2018 will be protected and not subject to the new laws; however, the transfers need to be made strategically in the right way.
Penalty for Asset Transfers: Transfers made during the look-back period will be subject to a penalty period (a period of ineligibility) that can last up to 5 years. The penalty is calculated by using a set amount as a divisor (the monthly MAPR for a veteran with one dependent, which is currently $2,169.00 per month for Improved Pension with Aid & Attendance), regardless of whether the application is for a surviving spouse or a qualifying veteran. Once determined, the penalty period begins on the first day of the month that follows the last asset transferred.
Net Worth Test: The prior “asset test” was “sufficient means” which was generally around the $80,000 mark. Under the new regulations, the asset limit is now set at $123,600 for 2018 and increased each year with inflation. The asset test takes into account all assets (minus the primary residence and personal belongings like cars) plus annual gross income, minus permissible medical expenses. Be sure to check with an experienced attorney who is also accredited agent by the VA to determine whether your assets are countable or exempt under the new laws.
Allowable Medical Expenses: The changes now allow qualified veterans and widows to deduct Independent Living Facilities expenses as a deductible medical expense as long as a physician, physician assistant, certified nurse practitioner, or clinical nurse specialist says that the person EITHER needs assistance with 2 ADLs (Activities of Daily Living) OR supervision due to cognitive or physical limitations. Previously only home care, assisted living and nursing home care costs were allowed as deductions.
CALL TO ACTION!
If you are a Veteran or Widow(er) of a Veteran and want or need help paying long term care costs, you should:
THE NEW RULES
Three-Year Look-Back For Asset Transfers: Beginning October 18, 2018, there will be a 3-year look back on asset transfers for less than fair market value. Previously you could transfer assets in one month, and apply for benefits the next month with no look back at all. The 3-year look back has eliminated the option of last-minute planning with immediate benefits. Note however, that any transfer prior to October 18, 2018 will be protected and not subject to the new laws; however, the transfers need to be made strategically in the right way.
Penalty for Asset Transfers: Transfers made during the look-back period will be subject to a penalty period (a period of ineligibility) that can last up to 5 years. The penalty is calculated by using a set amount as a divisor (the monthly MAPR for a veteran with one dependent, which is currently $2,169.00 per month for Improved Pension with Aid & Attendance), regardless of whether the application is for a surviving spouse or a qualifying veteran. Once determined, the penalty period begins on the first day of the month that follows the last asset transferred.
Net Worth Test: The prior “asset test” was “sufficient means” which was generally around the $80,000 mark. Under the new regulations, the asset limit is now set at $123,600 for 2018 and increased each year with inflation. The asset test takes into account all assets (minus the primary residence and personal belongings like cars) plus annual gross income, minus permissible medical expenses. Be sure to check with an experienced attorney who is also accredited agent by the VA to determine whether your assets are countable or exempt under the new laws.
Allowable Medical Expenses: The changes now allow qualified veterans and widows to deduct Independent Living Facilities expenses as a deductible medical expense as long as a physician, physician assistant, certified nurse practitioner, or clinical nurse specialist says that the person EITHER needs assistance with 2 ADLs (Activities of Daily Living) OR supervision due to cognitive or physical limitations. Previously only home care, assisted living and nursing home care costs were allowed as deductions.
CALL TO ACTION!
If you are a Veteran or Widow(er) of a Veteran and want or need help paying long term care costs, you should:
- Contact a VA Elderlaw Attorney as soon as possible to determine if you would benefit from VA Benefits Planning.
- Complete ALL asset protection planning before the October 18th deadline. All transfers that occur prior to October 18th will not be penalized under the new rules, even if an application for benefits is filed after that date. To be protected from the impact of the new rules, all planning should be completed by October 18th.
Read the following prior articles published on this blog regarding the changes:
- Proposed VA Regs Would Create Transfer Penalties for Pension Applicants
- NAELA Says the VA Could Be Sued If Proposed Transfer Regs Are Enacted
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