Proposed VA Pension Benefit Rules Tighten Eligibility

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The Department of Veterans Affairs published a new rule in January 2015 that will, if implemented, tighten the eligibility for VA Pension and Aid & Attendance benefits for veterans and their widows. This article summarizes some of the major proposed changes.
Proposed § 3.274 would establish a clear net worth limit. VA Pension benefits are subject to asset limits (generally said to be less than $80,000), but VA does not currently have a set net worth limit. The proposed net worth limit is the dollar amount of countable assets allowed to a community spouse in order to obtain Medicaid coverage for the nursing home spouse. This amount is currently $119,220, which would be indexed for inflation by adjusting it at the same time and by the same percentage as cost-of-living increases provided to Social Security beneficiaries. The amount of a claimant’s net worth would be determined by adding the claimant’s annual income to his or her assets (excluding the home, automobile and personal property). VA would calculate the amount of a claimant’s net worth when it receives an original or new pension claim; a request to establish a new dependent; or information that net worth has increased or decreased.
Proposed § 3.275 would describe how VA calculates assets. It would provide that VA would not consider a claimant’s primary residence, including a residential lot area not to exceed 2 acres, as an asset. (There has not previously been a limit on the property size of the residence). Proposed § 3.275 would also provide that if the residence is sold, proceeds from the sale are assets unless the proceeds are used to purchase another residence within the calendar year of the sale.
Proposed § 3.276 would provide new requirements pertaining to pre-application asset transfers and net worth evaluations to qualify for VA pension. The changes respond to recommendations that the Government Accountability Office (GAO) made in a May 2012 report, ‘‘Veterans Pension Benefits: Improvements Needed to Ensure Only Qualified Veterans and Survivors Receive Benefits.’’ Section 3.276 would establish a presumption, absent clear and convincing evidence showing otherwise, that asset transfers made by the veteran or spouse during the “look-back period” were made to establish pension entitlement. The changes would establish a 36-month look-back period and establish a penalty (ineligibility) period not to exceed 10 years for those who dispose of assets to qualify for pension. The penalty period would be calculated based on the total assets transferred during the look-back period to the extent they would have made net worth excessive. The penalty period would begin the first day of the month that follows the last asset transfer. (There has previously been no penalty for transferring assets to children or others prior to applying for Pension or Aid & Attendance benefits).
Proposed § 3.278 would define and clarify what VA considers to be a deductible medical expense for all of its needs-based benefits. The medical expense amendments will help to ensure that those who process VA needs-based claims process them fairly and consistently and that only needy claimants receive needs-based benefits. (There has been inconsistent determination of deductible medical expenses among the various regional VA offices). It would provide definitions for several terms, including activities of daily living (ADLs) and instrumental activities of daily living (IADLs), and provide that custodial care means regular assistance with two or more activities of ADLs or assistance because a person with a mental disorder is unsafe if left alone due to the mental disorder. It would provide that generally, payments to facilities such as independent living facilities are not medical expenses, nor are payments for assistance with IADLs. However, there would be exceptions for disabled individuals who require health care services or custodial care. The proposed rule would place a limit on the hourly payment rate that VA may deduct for in-home attendants.
Proposed § 3.279 would place in one central location all statutory exclusions from income and assets that apply to all VA needs-based benefits.
Proposed § 3.503 would incorporate in regulations statutory changes regarding Medicaid-covered nursing home care and applicability to surviving child beneficiaries.
Federal Register / Vol. 80, No. 15 / Friday, January 23, 2015 / Proposed Rules
For help understanding the possible VA benefits available to you, call Richard Courtney today at 601-987-3000.