Long-term care for aging veterans can be overwhelming and complicated. There are so many programs out there claiming to have our veterans’ best interests at heart, so it’s challenging to sift through all the noise to know which benefits are actually beneficial and aimed at protecting those who served our country.
The U.S. Department of Veterans Affairs (the VA) provides an important option in Aid and Attendance (A&A) benefits for aging or disabled veterans and surviving spouses. These benefits are a monthly payment for those who need help with daily necessities and/or are homebound. These payments are added to the pension you should already be receiving from the VA. However, there are certain income and net worth limits that could disqualify you from these benefits.
We want to help you understand who qualifies for these benefits and how you can form an estate plan that preserves your qualification.
Who qualifies for Aid and Attendance benefits?
The VA holds relatively strict qualifications for the benefits to ensure the money is going to the right people. The qualifications provide provisions for disabilities, but, unlike many VA benefits, the disability can be a non-service-related disability.
In order to qualify, the veteran or surviving spouse must be:
65 or older or officially disabled
A “wartime veteran,” meaning you served at least 90 days total with at least one day being during World War II, the Korean War, the Vietnam War, or the Gulf War
A non-dishonorably discharged veteran
Or, a surviving spouse who lived with the veteran at the time of death and who maintains a single status
Additionally, one of the following must be true:
You need someone to help you with daily activities such as bathing, eating, and getting dressed
You must stay in bed for all or most of your day due to illness
You are at a nursing home due to the loss of mental or physical abilities related to a disability
Your eyesight is limited to 5/200 or less in both eyes or has a concentric contractor of the visual field of 5 degrees or less (even with corrective lenses)
You may also qualify if you have to spend most or all of your time at home due to a permanent disability. However, you will not be able to receive Aid and Attendance benefits if you are already receiving Housebound benefits from the VA.
Net worth cap
Even if you fulfill the qualifications above, you may actually have too much cash or assets on hand to qualify. Previously, the benefits did not have a net worth cap. However, the VA instituted the net worth cap in October 2018.
The limit for 2022 is $138,489 for total assets. This number changes each year, so you should verify with the VA what the current number is prior to your application.
Using an irrevocable trust to preserve qualifications for A&A benefits
This is where estate planning comes in. If you want to preserve your qualification but exceed the net worth cap, you can use an irrevocable trust.
Irrevocable trusts require you to permanently transfer ownership of assets into them prior to your death. Because of this, you generally will not have to count those assets when applying for benefits such as Medicaid or, in this case, veteran A&A benefits.
What’s important to know is that in 2018, the VA instituted a three-year lookback window for A&A benefits. This means your qualifications must be preserved for three years prior to your application for A&A benefits.
For instance, if you have $200,000 in assets and move $75,000 of those assets into an irrevocable trust right now, you will not immediately be eligible. However, if your assets outside of the trust remain below the net worth cap for three consecutive years, you are eligible to apply. You will use VA Form 21-2680 to apply.
At Miller Law Firm, we are committed to and take pride in helping our veterans secure the long-term planning and care they need. We help seniors pay for long-term care without going broke. If you need to preserve your eligibility or get a plan in place so you can secure the benefits you deserve, contact our team.
