The winds of change are blowing over the VA landscape. I’ve written about this in the past and the time may soon be here. These are changes that you need to understand.
Over the years, many of our clients have been able to qualify for an Improved Pension (sometimes called Aid and Attendance Benefit) to help pay for the cost of long term care, whether that be in an assisted living facility or nursing home or to enable them to stay home longer. This VA benefit has helped many people meet the high cost of care and stretch their dollars.
In order to be eligible for the VA benefit, as a rule of thumb, claimants had to have assets totaling less than about $80,000 (not counting their home or car). They also had to meet the VA income rules. While giving away assets triggers a five year look-back under the Medicaid rules, under the VA rules there is no look-back period for gifts or asset transfers.
All of that may be about to change under new VA legislation making its way through the House and Senate.
While the legislation has not yet been voted on, there are commonalities in the bills which tell us that a change in the law is near. Among the biggest proposed changes are the following:
• A penalty with a three year look-back for asset transfers under the VA rules.
• Under the new rules, transferring money into a Vet Trust or into an annuity will also trigger the three year look-back period.
• What’s more, penalties caused by an asset transfer from a now-deceased spouse will carry over to the surviving spouse.
As with so many bills that wind through the legislative process, no one can know for sure what the final result will be until the House and Senate have each voted and then reconciled their respective bills and then President Obama must sign it. Our best guess is that the new legislation will probably make its way to a vote early next year and it appears likely that it will become the law of the land at that time.
For that reason, people who are eyeing VA eligibility would do well to get their plans in place now before the anticipated law changes. Any new law will be prospective only, meaning opportunities still exist now under the current laws. If you have would like to discuss this or need further information, please feel free to give us a call at (973) 994-2287.