Veterans and spouses of veterans – you may want to pay close attention. A new rule was proposed by the Department of Veterans Affairs in January of this year that may cause you an extra headache or two when it comes to applying for needs-based benefits. The pension program that would be affected by the change is for low-income veterans that are 65 or older.
Why the VA wants change
The goal of the proposed rule is simply to protect the integrity of the pension program by establishing new requirements regarding how asset transfers and net worth are looked at. This VA pension program is meant to help those in financial need, however, because of certain loopholes, even the wealthy can manipulate their way into extra money each month.
A case was identified where a recipient of VA benefits had just transferred over a million dollars into an irrevocable trust less than 3 months before applying for the pension. The VA was aware of these assets when the pension claim was approved but completely avoided adding this trust into the person’s net worth. What’s worse is that this isn’t the only way to essentially cheat the system. It’s because of the prevalence of cases like these — where those who can afford to support themselves and their families, whether long-term care is involved or not — that this new rule was finally proposed.
What the VA proposed rule would do
Now, veterans filing for the program will have their net worth during the prior 3 years evaluated to ensure no large amount of assets were transferred and that they have a “genuine need” for these benefits. That means providing 36 months’ worth of bank statements and tax returns. What was already a long and tedious process will now result in even longer administrative delays. So veterans and their families aren’t exactly welcoming this proposed rule, and many will be impacted if the rules are implemented.
If money was gifted to a church, or even to a family member for an emergency, it could count against you and the proposed rule would penalize you with (up to) a 10-year waiting period to qualify. Live on more than two acres of land? Even though primary residences are exempt when determining need, no matter the location or the value, this land would be considered a resource, potentially making you ineligible. Net worth limits will be set at $119,220, including all annual income and assets.
Though the Veterans Administration may mean well by trying to ensure that only those who truly need financial help receive it, these proposed restrictions might ultimately do more harm than good.
If you have any questions or concerns regarding veterans benefits or to see how the proposed rule changes impact your situation, please contact the Law Office of Christina Lesher PC at 713-529-5900 or online. We’ll be more than happy to answer your questions and provide the guidance you need.