The Importance of Using a Knowledgeable Consultant
Getting the aid and attendance benefit is a slow process even for those applicants who know what they are doing. On the other hand, for those who blindly submit a claim without the proper support documents, it can take 8 to 12 months for a decision from the VA. A poorly documented claim may also result in a denial.
A knowledgeable consultant can shorten the award decision to possibly 3-4 months. In addition, a consultant will make sure that all deductible expenses are applied in order to maximize the award. Finally, and most importantly, the consultant will provide guidance to prevent denial of the claim.
Understanding VA Pension and VA Pension with Aid and Attendance
"Aid and Attendance" is a commonly used term for a little-known veterans’ disability income. The official title of this benefit is "Pension". The reason for using "aid and attendance" to refer to Pension is that many veterans or their single surviving spouses can become eligible if they have a regular need for the aid and attendance of a caregiver or if they are housebound. Evidence of this need for care must be certified by the VA as a "rating". With a rating, certain veterans of their surviving spouses can now qualify for Pension. Pension is also available to low income veteran households without a rating, but it is a lesser dollar amount.
Pension is an Underused Benefit
There are different income categories for Pension, but the highest could pay as much as $1,800 a month is disability income to a qualifying veteran household. A study commissioned by VA in 2001 estimated, over the next 14 years, only about 30% of eligible veterans would apply for Pension. The conclusion was most veterans simply don’t know about it. In fact, according to the National Care Planning Council, about a third of all seniors in this country, over the age of 65, could become eligible for pension under the right circumstances. That’s how many elderly war veterans or their surviving spouses there are. The VA does not do a good job of educating eligible veterans about how to obtain this benefit.
Eligibility Rules for Pension
To receive a Pension, a veteran must have served on active duty, at least 90 days during a period of war. There must be an honorable discharge. Single surviving spouses of such veterans are also eligible. If younger than 65, the veteran must be totally disabled. If age 65 and older, there is no requirement for disability. There is no disability requirement for a single surviving spouse.
The veteran household cannot have income – adjusted for medical expenses – exceeding the Maximum Allowable Pension Rate – MAPR – for that veteran’s pension income category. If the adjusted income exceeds MAPR, there is no benefit.. If adjusted income is less than the MAPR, the veteran receives a Pension income that is equal to the difference between MAPR and the household income adjusted for medical expenses. The pension income is calculated, based on 12 months of future household income, but paid monthly.
The Special Case for Long Term Care Costs
A special provision for calculating Pension income, allows household income to be reduced by 12 months worth of future, recurring medical expenses. Normally, income is only reduced by medical expenses incurred in the month of application. These allowable, annualized medical expenses are such things as insurance premiums, the cost of home care, the cost of paying adult children to provide care, the cost of adult day care, the cost of assisted living and the cost of a nursing home facility. In most cases, these expenses are only deductible if there is a rating.
This special provision can allow veteran households earning more than the annual MAPR to qualify for pension. As an example, a veteran household earning $6,000 a month could still qualify for Pension if the veteran is paying $4,500 to $6,000 a month for nursing home costs. The applicant must submit appropriate evidence for a rating and for recurring costs in order to qualify for this special provision. Va does not tell applicants about this special treatment of medical expenses or how to qualify for it.
Dealing with Assets That May Disqualify the Applicant
There is also an asset test to qualify for pension. Any asset or investment that could be easily converted into income might disqualify the claimant. An asset ceiling of $80,000 is often cited in the media as being the test. The $80,000 has to do with VA internal filing requirements ans is not an actual test. In reality, there is no dollar amount for the test and any level of assets could block the award. The asset test ultimately becomes a subjective decision made by the veterans service representative, processing the application.
A home, used as a residence, vehicles and difficult-to-sell property are generally excluded from the asset test. VA will now allow assets to be transferred or converted to income in order to meet the asset test. There is no look back penalty for transferring assets as there is with Medicaid. There are specific rules governing transfers of assets and what constitutes income from assets and it must be done correctly.
A Qualified Consultant Can Provide the Necessary Advice for a Successful Award
Most VA employees understand the Pension claims process regarding low income or disqualifying assets, but they generally do not understand the special-case application process required for aid and attendance and long term care costs. Evidence exists that VA employees who deal with the public, may even be turning away long term care applicants, telling them their income is too high. Of course, that is not true.
The application form provides no information on the existence of this special treatment for annualized medical expenses. If the initial application, involving annualized costs, is not done correctly, delays in record gathering could force the award decision to take up to a year or the eventual award could be substantially reduced or even denied. The applicant must wait another full year to reapply or go through a time-consuming appeals process to correct any unfavorable decisions.
The secret for receiving a successful award for aid and attendance or housebound ratings is not in filling out the form but in knowing what documents and evidence must be submitted with the application. Knowing the secrets for a successful award – with the special case of long term care recipients – is 95% of the battle. Filling out and filing a claim is a formality.
A knowledgeable consultant can provide information to shorten VA’s decision window of 6 to 12 months to possibly 3 or 4 months. The consultant also understands how to maximize the benefit or avoid a denial. The consultant can also provide guidance for meeting the asset test. Finally, the consultant can provide the actual strategies for transferring assets and he or she can arrange for trusts or income conversions to allow for the best possible transfer of assets to beneficiaries thus avoiding taxes, family disputes and Medicaid penalties.
Advisors Who Wish to Be Consultants for Aid and Attendance Now Have a Handbook to Learn How
Up until now, the knowledge for applying for the aid and attendance pension benefit has been a well-kept secret, known only to a handful of practitioners nationwide. The National Care Planning Council has recently published a first-of-its-kind handbook to teach practitioners how to help their clients obtain this benefit. For more information please contact us.