The Programs Are in Place to Serve Veterans in Retirement

Criteria One: Military Service

This benefit is only available to veterans or their surviving spouses who meet the following military service history: An Honorable or General Discharge from a branch of the U.S. Armed Forces (including Coast Guard, Merchant Marines, WACS, WAVES, WAFS). At least 90 days of active duty military service. At least 1 day of the 90 must have been during one of the following periods:

World War I   04/06/1917 – 11/11/1918

World War II 12/07/1941 – 12/31/1946

Korea              06/27/1950 – 01/31/1955

Vietnam^*         08/05/1964 – 05/07/1975

Persian Gulf       08/02/1990 – TBD

Service in the Merchant Marine during World War II counts the same as Naval service, providing there were 90 days at sea. Women in World War II, including nurses, qualify as veterans. Reserves and National Guard are not qualified unless they served 90 days active federal duty with 1 day during a period of conflict. Training does not count as active duty.

^*For those veterans who served “in country” in Vietnam, the beginning date for qualifying service is 2/28/1961.

Criteria Two: Medical Necessity

Medical necessity means the applicant has a condition from a medical diagnosis that is creating significant deficits in their ability to perform the Activities of Daily Living (ADLs) which include: bathing, dressing, eating, toileting and getting in and out of bed or chair. The ADL deficit makes living alone or unassisted hazardous to their health, safety or well-being.

A common question is “What diagnoses are acceptable to the VA?” There really is no right answer to this question. Any medical diagnosis that renders the applicant incapable of self-care with at least two ADL deficiencies is generally acceptable. Common diagnoses that are encountered include: dementia, Parkinson’s, COPD, diabetes, vertigo and hemiplegia. The applicant’s personal physician on a VA Physicians report makes the determination of medical necessity.

Three: Care Cost Compared to Monthly Income

Monthly income is defined as money available to the applicant on a monthly basis. If the applicant is married, both incomes must be disclosed. Many people believe their income is too great to qualify when often that is not the case. Examples include: Social Security, retirement pensions, annuity payments, military retirement pay, disability payments from the VA, interest and/or dividends from

IRA distributions.

Cost of care is the cost of qualified monthly medical expenses. The VA does not allow many medical expenses for this determination. Only the following costs may be included: bill from an assisted living community, bill from board and care home, home care agency or private caregiver, insurance premiums for health, vision and dental care, insurance premium for long-term care policy and deductions for Medicare Part B & D.

Those are all of the costs currently allowed. Note that medications, co-pays, deductibles and durable medical equipment are not included among the list of qualified expenses to reduce costs if you have supportive rewards. In the case where only the veteran requires assistance, the VA does not allow for a cost-of-living allowance for the stay-at-home spouse, but does take both incomes into consideration and will count the spouse’s medical expenses and any benefit will be paid at the same rate.

If the veteran is healthy, but the spouse requires care, then they could qualify under a Basic Pension where the maximum award is $1,360 per month per 2013. Same rules apply as the Non-Service Connected Disability Pension with Aid & Attendance with the difference that the medical eligibility it would be based on the spouse and not the veteran. Once the monthly Income and Cost of Care are determined, the Cost of Care should exceed the Monthly Income by an absolute minimum of 5 percent to receive the maximum benefit.

Criteria Four: Liquid Assets

Liquid assets are defined as financial instruments that can easily be converted to cash.

Examples of liquid assets may include: checking accounts, saving accounts/money markets, IRAs/401ks/Keoghs, CDs, trust funds (with access to principal), mutual funds, stocks and bonds.

Homes, property (both real and personal) are considered fixed assets and might not be used in this calculation. However, if a home is sold and converted to a liquid asset—consult a qualified veteran’s advocate or VA-accredited attorney immediately.

How Much Can You Have in Liquid Assets?

Unfortunately, there is no “right” answer. What we do know is the VA is getting more conservative in its allowance for liquid assets since the passage of the Deficit Reduction Act. You may be able to keep more assets than commonly believed.

Traditionally, the VA takes into consideration three items when calculating acceptable amounts of liquid assets: the total amount of assets, the rate of depletion (how much must be taken out of assets to make up the monthly difference in cost of care) and longevity (based on VA actuarial tables).

Many people believe they have too great an asset base to qualify when often that is not the case. Please consult with a VA accredited attorney or other qualified veteran’s representative.

No Look-Back Period

The VA currently has no “look-back” period for transfer of assets. Whereas Medicaid disallows a protection of assets strategy for an applicant for a period of five years, the VA does not. There are many options available to remove or limit the effects of excess liquid assets including certain trusts and annuities as well as gifting to a trusted member of your family. Gifting is not usually recommended due to potential loss of other government benefits including Medicaid.

Proposed Rule Changes

In January of 2015, the VA-issued proposed regulations, which establish an asset limit, a look-back period and asset-transfer penalties. The proposed rule also defines and clarifies what the VA considers to be a deductible medical expense for all of its needs-based benefits, and proposes statutory changes pertaining to pension beneficiaries who receive Medicaid-covered nursing home care. These proposed regulations exceed the statutory authority granted to the VA and many senior and veteran advocate organizations objected to these proposals. The VA withdrew the proposed rule for “further consideration” after extensive objections and commentary by interested groups. 

Richard Schulze contributed content to this press release.

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