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Change Coming the VA Benefit Aid and Attendance

David Silver teaches The Legal Environment of Business in ECU's Department of Finance. Dave is also a Partner with The Graham.Nuckolls.Conner Law Firm in Greenville, specializing in Elder Law

About a year ago in this space, I described a program available to wartime veterans through the Veterans Administration ("the VA") called Aid & Attendance ("A&A"). The VA is on its way to unilaterally making significant changes to A&A, but no one appears to be debating or publicizing this imminent change that will take away a benefit from wartime veterans.

A&A is a program that pays up to $2,120 per month to an eligible veteran (or up to $1,149 per month to the widow/widower of a veteran) who is in need of aid and attendance from a health care giver. This amount of money, coupled with the veteran's or widow(er)'s regular income, is often sufficient to allow that person to stay safely at home for an extra few years. As with everything, there are eligibility rules and limitations for A&A.

First, the veteran (or widow) must be over 65 and actually be in need of aid and attendance from another person. If the veteran can drive and/or take care of him/herself, then the veteran will not be eligible for A&A. It is allowable for the aid and attendance to be provided by a child as long as there is an adequate written caregiver agreement between the parent and child.

Second, the veteran must have been discharged from the military other than dishonorably and served at least 90 days of active duty, with at least one of those days being during wartime. The official wartime dates are as follows: 12/7/1941 - 12/31/1946, 6/27/1950 - 1/31/1955, 2/28/1961-8/4/1964, 8/5/1964 - 5/7/1975, 8/2/1990 - present. There is no requirement that the veteran had to be on the front lines, peeling potatoes in North Carolina would be sufficient. However, for the 2/28/1961 - 8/4/1964 time period, the veteran had to actually have been in Vietnam.

Third, there is an income limitation. The veteran's (and spouse's) income minus unreimbursed medical expenses (like the cost of a caregiver) is subtracted from the A&A benefit to be received. If this net income exceeds the A&A benefits, then there is no benefit. However, when a veteran truly needs A&A, the cost of the caregiver usually exceeds the Veteran's income.

Finally, there is an asset limit. The veteran (and spouse) is allowed to have $80,000 of countable assets (this number could be less than $80,000 depending on age and the mood of the VA employee that day). Not all assets are "countable" towards that $80,000 limit, such as a residence, household furniture and a vehicle.

There is currently no look-back period for gifts or uncompensated transfers made by the veteran prior to applying for A&A. This means that the veteran (or widow) could give away assets to a child or a trust just prior to applying for A&A in order to meet the $80,000 asset limit.

Congress considered adding a look-back period in a bill proposed in 2012 and another in 2013, but did not pass either bill. This year, the VA is acting to change the rules to A&A on its own without Congress' direct involvement. Among other changes, the VA's currently proposed new rules will raise the allowable asset limit to $119,220, but will also impose a three-year look-back period for gifts and uncompensated transfers. While the current lack of a look-back period does create the potential for abuse, it also allows wartime veterans the ability to leave a farm or some hard-earned savings to their children while still being able to get help to pay for home care or assisted living when they need it the most. Whatever your individual viewpoint might be on this matter, I hope you would agree that it is a topic that warrants discussion and consideration.

Unless a groundswell of opposition to the VA's imminent changes emerges out of nowhere, it appears as if the look-back period for A&A will soon become a reality. If you or your loved one is a war time veteran, a widow(er) of a wartime veteran, are currently in need of aid and attendance from a caregiver, and have countable assets that exceed $80,000, you should immediately investigate applying for A&A before the new rules go into effect.

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