The Veterans Administration has been talking about implementing new VA changes to the Aid and Attendance or Improved Pension program since 2015. They published the rule on September 18, 2018. We have covered in previous articles the proposed changes and will not re-hash the whole history in this article. Instead we will focus on what we know now. When is the change? The official publication date for the changes is September 18, 2018. The effective date is 30 days after publication. Therefore the effective date for new VA changes is October 18, 2018.
What provisions made the final rule?
The main reason for the changes was to implement the new VA changes was to add a “look back” period for disqualifying transfers, similar to the Medicaid look-back rule.
Instead of 5 years like Medicaid, there will be a 3 year or 36 month look-back for the Aid and Attendance application process. That means for an application submitted after the effective date of the rule change, the VA will ask if the applicant or the spouse has made a transfer for less than value which ended up decreasing the household net worth. If the answer is “yes” then the VA will implement an ineligibility period, not to exceed 5 years. The period could be shorter if the penalized transfer is small.
Another of the new VA changes provision is a clear standard for the asset cap.
The VA chose to adopt the Medicaid standard for community spouse resource allowance which for 2018 is $123,600. This amount is expected to change in the future since they have attached a cost of living provision. The VA will no longer perform age-benefit analysis, so older applicants will not be limited to a lower standard.
Strangely the VA is choosing to count household income along with non-exempt assets as part of the net worth calculation.
Therefore the higher the income, the fewer assets one may keep and still qualify. However, there is still the possibility of off-setting income via un-reimbursed medical expenses to reduce the income back to nothing.
The home is still exempt from counting against the applicant unless it is sold. Even then, if the proceeds are used to purchase another home of equal or greater value or to buy other items or services which benefit the Veteran or spouse, there will be no ineligibility based on the home sale. There is no limit to the value of the home. However, the VA arbitrarily limits the size of the exempt property to 2 acres. Anything over 2 acres would be countable in the applicant’s net worth unless the additional acreage is not marketable (e.g., if there are zoning restrictions against dividing the land.)
It is important to note that only transfers which result in making the applicant eligible will result in an ineligibility period.
For example, a single veteran who gave his church $90,000 last year, and now has only $10,000 besides his home would not be penalized because the total of $100,000 would still be eligible under the new rules.
Please give us a call at 239 434-8557 to determine how the rule may impact you.