Qualifying for VA benefit will be harder in 2016

Stephen J. Lacey | BrevardCounty

November 11 was Veterans Day – a day to honor all United States military servicemen and servicewomen. I would like to take this opportunity to give sincere thanks to all who have served.

In addition to days of remembrance and reverence, the United States government has made provisions for assistance to be provided to individuals who have served in the United States Armed Forces.

One such benefit is the Aid & Attendance Pension, which provides monthly cash benefits to qualified “wartime” veterans and their spouses or dependents. The goal of pension is to ensure a certain level of financial security in recognition of service to our country.

The VA estimates that there are 22 million veterans alive today (including presently active military). However, the most recent data available from the VA indicates that although there are millions of veterans receiving some form of benefits (including health care services), only 300,000 veterans are presently receiving pension benefits, though most would be service-eligible for the Aid & Attendance Pension.

One theory to explain the disparity is the difficulty in applying for and obtaining pension benefits. Eligibility rules are complicated, the application process is long, and many families are unaware the benefit exists. Some have had issues obtaining other benefits through the VA and are discouraged. Others have been denied (or deemed ineligible) without advice on how to follow up.

As difficult as the VA Pension eligibility rules are to navigate under current law, in early 2016 the VA will be instituting new rules that are projected to be more complicated and more restrictive. Pension benefits are already subject to income and asset requirements. However, there is no “bright line rule” for net worth. Individual situations are reviewed on a case-by-case basis. If the proposed rules take effect, there will be a strict net worth standard imposed on every claim.

Essentially, the asset requirement for a 92 year-old single applicant would be the same as that of a 72 year-old married applicant, despite the fact that expenses for these two individuals likely vary greatly.

Additionally, transfers of assets made in the three years prior to application (the “lookback period”) will result in a period of ineligibility. Under current law, such transfers can be made without penalty. The VA indicates that one reason for the changes is that individuals are able to cheat the system by giving away “millions” to qualify. Actual data does not appear to support this theory, and the new more restrictive rules will cause even greater hardships on needy families.

Veterans (and their spouses and dependents) must act quickly to achieve eligibility under the current regulations, before pension benefits become even more difficult to obtain. Do not wait until you are in a desperate situation before availing yourself of a benefit you have so clearly earned and deserve.

Stephen J. Lacey, JD, LLM-Tax is a member in the law firm McClelland Jones LLC. Lacey concentrates on estate planning, asset protection, Medicaid planning, probate.