A proposed VA rule is threatening the eligibility requirements for a benefit that provides money to veterans and surviving spouses in need of assistance with daily necessary activities. The VA claims it is trying to prevent people from bucking the system, but veterans and their families are saying it will cause more harm than good.
According to Forbes contributor and New York elder lawyer Bernard Krooks the proposed rules are one big legal wrinkle and “are an attack on our nation’s veterans and their families.” He added that the move is a huge change from the status quo.
Currently, there is no definitive net worth number to be eligible for the VA pension benefit. To be qualified, persons must have no more than $80,000 in assets and high deductible medical expenses that net out their income. The allowed asset worth does not include their home or car. The benefit is designed to help with necessary activities such as bathing, eating and dressing.
The maximum monthly benefit for a single veteran is $1,788 and for a surviving spouse it is $1,149. The benefit is tax-free.
Changes in the proposed rules include a new combined net worth and income limit of $119,200 and an imposed 36-month look-back period on asset transfers. Rules for gifting would become stricter and more scrutinized.
There would also be a penalty period of up to 10 years related to gifts. For example, if a veteran gave away $50,000, a 28-month penalty would apply. Therefore, the veteran would not qualify for benefits for 28 months and a widow would be penalized for 44 months.
Elder lawyer Ashley Payne supported the three-year look-back, saying, “While taxpayers should support indigent veterans, they should not be made to subsidize inheritances.” She cited aggressive planners who peddle annuities and trusts to shelter assets so that veterans can become eligible for pension benefits as a big part of the problem.
But she is one of few of supporters for the new rules. Most critics are against the changes. Krooks admitted that there are abusers of the system, but said if he could revamp the way things worked, he would create a one-page application that veterans could fill out and get what they are entitled to.
According to Forbes, the VA dispenses approximately $5 billion in aid and attendance benefits. It feels the rule changes are necessary because “Congress did not intend that a claimant who has sufficient assets for self-support could preserve those assets for his or her heirs or transfer them as gifts and still qualify for a pension at the expense of taxpayers.” To prove their point, the VA used the example of a claimant who transferred over $1 million in assets less than three months before qualifying for benefits.
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