Irrevocable Life Insurance Trust VA Aid and Attendance

VA pension benefits, usually called VA Aid and Attendance, enable veterans and their spouses to afford basic costs of living, in-home care givers in order to stay at home or to live in assisted living facilities without Medicaid. Planning for eligibility for Aid and Attendance (Pension Benefits) seems to be less complicated than the planning for Medicaid eligibility. However, VA Aid and Attendance eligibility planning should be conducted very cautiously with its implications for eventual Medicaid eligibility for the veteran or/and his/her spouse. Very often, VA pension benefits and Medicaid have very conflicting eligibility rules and, for example, doing a transaction for the purpose of VA pension benefits might cause ineligibility period for Medicaid if the applicant has to apply for Medicaid within 5 years.

Veteran Service Organizations exist to provide free applications for veteran’s benefits, but they are not qualified to implement eligibility planning for VA pension benefits or subsequent Medicaid eligibility planning. They are also not qualified to assist and counsel veterans and families in regards to conflicting 2 different sets of eligibility rules. Such planning requires assistance of a qualified elder law attorney.

Medical Needs Test

If the veteran is younger than 65, he or she must be totally disabled to receive the benefits and medical evidence must be submitted. Allowances are granted for regular need for “aid and attendance” or if the beneficiary is “housebound”. Also, a medical need allows an applicant to deduct certain medical expenses and some non-medical expenses associated with disability from future annual income to meet the income test. Expenses such as home care, assisted living or nursing home care are usually the trigger that allows medical deductions to qualify a veteran for a pension.

The Income Test

The household income of the veteran or the surviving spouse cannot exceed the Maximum Allowable Pension Rate (MAPR) for that category of application. However, as was previously stated the veteran can subtract the medical expenses and some non-medical expenses associated with disability from the income in order to meet the income test.

The Asset Test

As a general, cash-equivalent, household assets cannot exceed $80,000. The service representative is encouraged to analyze the veteran’s household needs for maintenance and weigh those needs against assets that can be converted to cash and whether the income from the cash will cover the difference in the household income and the cost of medical care over the care recipient’s remaining lifespan.

A personal residence, automobiles for personal use, and personal property are exempted from the asset test. Assets can be transferred to someone who is not a household member or a portion of assets can be converted into income through annuity. However, if the assets are transferred to someone to satisfy the asset test, great care should be given to the impact on the possible future Medicaid. It is very likely that the veteran or the spouse might end up in a nursing home and incur more care cost than the current income and veteran benefit combined. If this happens, the beneficiary may probably have to depend on Medicaid to cover the cost of care at a nursing home. Therefore, it is extremely important that a possibility for Medicaid application in the future be considered when a veteran applies for VA pension benefit. That is why the assistance of an attorney who is familiar with 2 sets of different rules for VA pension benefit and Medicaid is a must.

Please contact our office for VA pension benefits (Aid and Attendance).

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