Turning to the financial test in VA eligibility planning, there is much confusion in this area.
Unlike the VA Compensation program, whose eligibility tests focus on a veteran’s degree of disability and whether or not it was connected to his or her service to our country, the Pension program also focuses on the veteran’s income and assets.
When one applies for the pension benefit, the VA screener’s job is to determine whether or not the veteran or surviving spouse has sufficient assets and income to meet his or her basic needs, including needed medical and care expenses.
A common misconception is that there is some “bright line” test used by the VA for determining how many assets an applicant may have to qualify for benefits. The most common asset limit figure floating around is “$80,000” This is untrue as there are many persons with fewer than $80,000 assets whose applications have been denied.
Instead, the VA screener estimates an applicant’s medically related expenses over their expected lifetime and, in that light, looks at the applicant’s assets and anticipated income over the same expected lifetime. When it is determined the veteran does not have sufficient income and assets to cover the essential medical expenses, eligibility is approved.
However, that is not the end of the analysis. Once basic eligibility is established, the VA screener must then determine the amount of the benefit. In Part I of this primer, we identified the MAXIMUM benefit under each pension program. However, the actual benefit could be less than the maximum benefit. It is determined by looking at the applicant’s income in light of his or her unreimbursed medical expenses. When the shortfall is less than the maximum benefit for the applicable program, the veteran may receive something less than the maximum pension benefit.
Despite its twists and turns, the VA Pension benefit can be of critical assistance in helping families cope with the high costs of care for the elderly with benefits that can exceed $2,000 per month.
While many VA clients who initially contact our office do not immediately qualify for these critical benefits, working together, we undertake an effective and lawful series of steps to help them achieve eligibility. In the next part, we will focus on some of these strategies.
WARNING: This Primer series is for educational purposes only and is only a general discussion of the topics. It is not a substitute for personalized legal advice based upon one’s individual circumstances and goals. For such advice, seek the counsel of an experienced and qualified elder law attorney accredited to practice before the VA.
- Living Trusts and Incapacity Planning - March 31, 2020
- Estate Planning and Charitable Giving — Key Points - March 29, 2020
- Over-Funding Your Retirement Plan: A Potential Estate Planning Problem - March 27, 2020