If you have assets including real estate, savings, and investments and want to create an estate plan that will protect them and your family, our team can help. If you are a Veteran, you may be interested in exploring VA Pension or VA Compensation as part of your estate plan or payment for long term care. You should know the pros and cons of a VA Pension claim versus utilizing VA Compensation and what the best choice is as part of your estate plan.
What is a Veteran’s Pension?
Some wartime Veterans and their surviving spouses are eligible for a VA Pension claim. Also known as Aid and Attendance, this program is designed to help less-wealthy Veterans afford the costs of long-term care.
Requirements for Eligibility
You must be at least 65 years old, or have an injury or disability that is permanent for a VA pension. Or you may be a patient in a nursing home for long-term care because of your disability, or you are receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI).
You may not have been dishonorably discharged and your family income must meet Federal limits.
Your service must meet certain criteria. Your service must have started on active duty before September 8, 1980, and you served at least 90 days on active duty with at least one day during wartime, or you started on active duty as an enlisted person after September 7, 1980 and served at least 24 months or the full period for which you were called or ordered to active duty (with some exceptions) with at least one day during wartime, or you were an officer and started on active duty after October 16, 1981 and you had not previously served on active duty for at least 24 months. Wartime periods include World War II from December 7, 1941 to December 31, 1946, the Korean War from June 27, 1950 to January 31, 1955, Vietnam War era from February 28, 1961 to May 7, 1975 for Veterans who served in the Republic of Vietnam (“boots on the ground”), and from August 5, 1964 to May 7, 1975 for Veterans who served outside the Republic of Vietnam, and during the Gulf War from August 2, 1990, through a future date to be set by law or presidential proclamation.
Determining Countable Income and Maximum Annual Pension Rate (MAPR) for Veteran’s Pension
You should discuss with a VA Accredited attorney how to calculate your “countable income” and Maximum Annual Pension Rate. From December 1, 2020 to November 30, 2021, the net worth limit (not including exempt assets such as your home) is $130,773. The government defines your countable income as to how much you earn and your Maximum Annual Pension Rate is the maximum amount of pension payable.
What is Veteran’s Compensation?
VA Compensation is a form of disability compensation that is paid to Veterans with disabilities that arise from active military service or for diseases or injuries that were incurred or aggravated during active military service. Disability compensation is not needs-tested: the Veteran may have an unlimited net worth and income under this program.
Forms of VA Compensation
There are a few forms of VA Compensation including Dependency and Indemnity Compensation (DIC) and Special Monthly Compensation (SMC). DIC is typically payable to a surviving spouse, child or parent of a Veteran who died on active duty, training for active duty, or death as a result of a service-related disability. SMC may be paid to Veterans, their spouses, surviving spouses, and parents. This compensation is paid at a higher rate due to the circumstances including needing aid from an injury. If a spouse or surviving spouse receives this benefit is based on the need for aid. VA compensation can also provide additional benefits including housing and insurance consisting of Adapted Housing Grants, Service-Disabled Veterans Insurance, and Veterans Mortgage Life Insurance.
What is the Difference Between Veteran’s Pension and Veteran’s Compensation?
The main difference is that VA compensation is a benefit paid on the basis of the kind and severity of a disability that happened as a result of your active duty in military service. VA Pension is a benefit paid on the basis of a disability that was not a result of active service in the military, or because of age and income.
VA Pension benefits are provided to Veterans who have Financial needs. However, VA Compensation benefits are provided based on the level of the disability. Typically, monthly payments for Pension are lower than for Compensation. A Veteran cannot collect on both, so a dually-eligible Veteran will want to explore which would result in a better monthly payment.
What are My Next Steps?
Every Veteran’s situation is unique. Each Veteran who believes that there is a potential claim should consult with a VA accredited attorney in his or her area to discuss options. Call our firm to set up a meeting to discuss your estate plan and long-term care plan to make sure you are prepared for the future.