VA Benefits and QITs – Part 1

We have many clients who first qualify for the VA Aid and Attendance benefit to help pay for their long term care and then when their remaining assets are spent down, they must apply for Medicaid.  As I have written about previously, Medicaid has a strict income cap ($2349 in 2020).  If an applicant’s income exceeds that number, Medicaid eligibility can only be achieved if a qualified income trust (QIT) is used to pass thru some of the income before sending it to either the facility providing care or in the case of a married couple to the healthy spouse.

The QIT is also known as a Miller trust and is important to Medicaid eligibility.  Even if you do everything right, if you fail to use the QIT when necessary it will result in a Medicaid denial.  It is clear, however, from several Medicaid Communications, that the VA Aid and Attendance benefit is not counted as income in this calculation.  In other words, if income is above the income cap only by including the Aid and Attendance benefit,a QIT is not necessary.

Yet, nearly 6 years after the change in Medicaid programs in New Jersey that resulted in the use of QITs, some Medicaid offices still deny applications for failure to use a QIT when one is not necessary.  I had just such a case recently that required me to file a fair hearing appeal to challenge the denial.

Next week I’ll tell you the details of that case.