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Veterans and surviving spouses benefits, through the Aid and Attendance Veterans Benefits, will have some dramatic changes made effective October 18, 2018.

What does the veterans and surviving spouses benefits program offer?

This Aid and Attendance benefits program was established to help eligible Veterans and/or their surviving spouses pay for the assistance needed in performing everyday functions, whether at home or in the home of a relative or in a qualified assisted living or nursing facility. Although one of the most underutilized of Veterans benefits, it has been an available option for many of our nation’s most independent seniors, including WWII Veterans and surviving spouses, many 80 years or older, and include a growing number of centenarians.

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What changes were made to this Veterans and surviving spouses tax-free program?

The areas of eligibility requirements are non-financial qualifications and financial requirements:

  1. Non-Financial Qualifications. These include Veteran service and status, age of Veteran and/or surviving qualified spouse and health requirements or needs. Changes to these qualifications are minor and mainly include defining previously undefined terms.
  2. Financial Requirements. These requirements, although strict in the necessity of meeting requirements, were liberal in the requirements and left many definitions unclear. There are major changes in these requirements.

Read more about Pre-October 18, 2018 rules

The most critical areas of change include these financial requirements:

  • Under the old rules, it was unclear what the VA considered a qualifying medical expense.
    • The new rules provide additional clarity, but at the top of the list remain home caregiver expenses, assisted living fees, and nursing home costs.
  • Under the old rules, the limited net worth limit was unclear and depended on whether the claimant was married or single. Age limit was also unclear. Generally, an $80,000 limit applied to married couples and a $40,000 limit applied to single claimants.
    • Under the new rules, the initial net worth limit is $123,600 for all claimants regardless of marital status or age.
  • Under the old rules, a claimant whose net worth exceeded VA limits could transfer assets to family members or to a particular type of trust. Assets could be used to purchase annuities that would increase their monthly income while reducing their net worth.
    • Under the new rules, all asset transfers occurring within the three years immediately leading up to the submission of an application will be considered. This includes any transfers to trust and the purchase of annuities. When those transfers help a claimant meet the new VA asset test, the VA will impose a transfer penalty during which benefits will not be paid. The VA will use a formula to determine the length of the penalty—the more assets transferred, the longer the penalty, up to a five year limit.

The Veterans and surviving spouses benefits is an under-utilized benefit

Many families of Veterans and surviving spouses aren’t aware of this program. It remains one of the most under-utilized benefits available to Veterans and surviving spouses, and even with the upcoming changes, the help offered can be life-altering.

Veterans and surviving spouses can often receive these benefits while remaining in their homes or living with relatives.

Many assistance and insurance programs do not allow professional caregivers who are family members to be paid to provide the loving and skilled care their Veteran relative and spouse require in order to remain at home. This program provides that option.

Anything else?

Absolutely. If you are currently in the process of filing for benefits, your time is limited, and you should be very careful. The new rules do not apply to transfers completed before October 18, 2018. This means the look back period and the transfer penalty do not yet apply, but it also means the VA will be taking a hard look at applications submitted around this deadline.

The bottom line

If you’ve never consulted a CPA or understood why an individual would need this type qualified professional service, now is the time to contact us. Our goal is to become part of your overall life and business goal planning team so that you’ll be able to establish your own goals and know that you have a trusted professional on your team. We establish and maintain a personal and business relationship with our clients. Your LIFE is your business and your BUSINESS is your life. We’re here for YOU.

Call 479-478-6831. Use my Calendly Page (it’s easy) to set an appointment or you can email us.

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