Veteran’s Benefits – The Hidden Benefit

The discussion of long term care and government benefits to pay for that care most often leads to the topic of Medicaid, however, there is another benefit available to qualified veterans of the U.S. military through the Veterans Administration that can be a source of funds to pay for assisted living and home based care.  Eligible veterans and their widowed spouses may be eligible for a non-service connected pension, as much as $1801 per month for veterans, $976 per month for widowed spouses.  The program is commonly known as the Aid and Attendance program and the applicant must be deemed permanently and totally disabled.  But if you’re thinking that it’s probably too hard to prove a disability that’s not necessary the case.  The VA presumes that someone over 65 years of age and housebound or in an assisted living facility is permanently and totally disabled.

As is often the case with government benefits, the rules can be confusing.  Similar to the Medicaid program applicants must meet certain income and asset limits.  The pension amount is determined by a specific formula.  Unreimbursed medical expenses are subtracted from gross income.  That number is then subtracted from the maximum pension amount to determine the applicant’s pension amount.  It is important to understand that the cost of the assisted living facility and home health aides is usually counted as an unreimbursed medical expense.  In many cases, it becomes easy to qualify for the maximum pension amount.

There is also an asset limit, approximately $40,000 for a single individual, $80,000 for married couples.  Unlike the Medicaid program, however, there is no lookback period or penalty for transferring assets.  This means that one can transfer assets to get below the asset limits and immediately qualify for Aid and Attendance.

However, things are not that simple.  (They rarely are when it comes to the long term care system and government benefits).   Transferring assets can result in additional benefits from the VA but those same transfers will result in ineligibility for Medicaid.  Now, that’s not to say that one should forget about Aid and Attendance.  It does, however, require a carefully drafted plan so that should the applicant need the next level of care down the road (ie. nursing home care) the applicant will be able to qualify. 

Consulting with a knowledgeable elder law attorney who will help a family plan for the next level of care, not just the care that is needed now, is advisable.