On October 18, 2018, the rules for the Department of Veterans Affairs’ Aid and Attendance program changed. Why? The rules were amended because of the way the VA assessed net worth. Net worth is an important aspect of the VA Aid and Attendance application process because it is a needs-based program.
According to the VA’s official ruling, many Aid and Assistance applicants misunderstand what the phrase “needs-based” means in this context. “Needs-based” refers to the applicant’s financial need, not their level of disability. So even if you have the required reduced visual field, you will still have to meet the appropriate financial qualifications for this long-term care pension program.
Because of this misunderstanding and a few rules about applicants’ net worth, Veterans with a high net worth were able to receive Aid and Attendance benefits. In the past, Veterans with a large enough net worth to support their medical needs would apply for this program and then use its pension benefits as a form of estate planning, gifting the pension assets to their heirs.
The new rules aim to limit these types of pension claims so that Aid and Assistance pensions go to Veterans who show appropriate financial need.
New Aid and Assistance Rules
Maximum Net Worth Limit
The Aid and Assistance program now requires applicants to have a maximum net worth of $123,000. As defined by the VA, net worth includes annual income and assets. An applicant cannot artificially lower their net worth by purchasing financial products such as annuities and some trusts. Some trusts—such as a trust for a child with special needs—will not be counted as part of your net worth. But keep in mind that the VA will be looking for whether you used your trusts or annuities solely to qualify for the pension.
Look-Back Evaluation Period
Under the new rules, the VA will use a 3-year look-back period to examine your asset transfers. This means that they will look back at any asset transfers you made during the 36 months before you applied for the Aid and Assistance program. They perform this look-back process to make sure that applicants plan to use the Aid and Assistance pension to meet their financial needs, not as the form of estate planning described above.
How Will This Affect Veteran Applicants?
The VA has put these rules and measures in place so that Aid and Assistance pensions will go to Veterans who need the increased pension to meet their medical needs. Hopefully, more Veterans with appropriate financial need will receive these pensions than have in the past.
These rules are meant to reduce the number of judgment calls VA employees have to make about applicants’ net worth, which they often had to make under the old rules. If a Veteran is not eligible for a needs-based Aid and Assistance pension, they should look into their eligibility for VA pensions that aren’t needs-based, including basic pensions. When a pension is needs-based, it should go to Veterans who express the greatest financial need.
Financial Assistance Services for Veterans Who Need Them
AVCC offers financial assistance services to help Veterans afford their home care, medical treatments, and other services that they need. We can help you figure out if you’re eligible for the Aid and Assistance program or other assistance programs. Contact AVCC today if you are interested in these services.