Veterans (VA) Benefits for Long Term Care
Certain benefits are provided to veterans of the armed forces that can assist with long-term care needs. Many non-lawyer VA advisors do not consider the other legal consequences associated with their planning advice in other areas of law such as Medicaid eligibility, income, estate and gift tax law. Certain strategies that are beneficial in qualifying for VA benefits can be disastrous if Medicaid eligibility is needed at a later time. A lawyer with full knowledge of VA eligibility requirements, Medicaid eligibility, income, gift and estate tax consequences can provide more comprehensive and beneficial legal advice to veterans.
Nursing Home Care
Most veterans will be able to receive free medical care at a VA hospital. This benefit is probably responsible for the misconception by most veterans that they will receive free nursing home care. In general, veterans will not receive free nursing home care. In Montgomery County, Ohio the VA Medical Center, located at 4100 West Third St., Dayton OH 45428, provides free medical care to veterans. The VA skilled nursing home is also located at the same facility. In addition, other nursing homes in the Montgomery County area are under contract with the VA to provide a limited number of beds for qualifying veterans.
The only veterans that are entitled to free nursing home care are as follows: 1) a veteran with a service-connected disability rating of at least 70%; 2) a veteran whose service-connected illness caused the need for skilled nursing home care. For any such veterans, they will be able to reside in the VA nursing home at no charge regardless of their income or resources.
Non-Service Connected Benefits
- Improved Pension Benefit
The most important type of benefit that can assist veterans with long term care needs is the improved pension benefit. Veterans or widows of veterans are entitled to an improved pension to offset the cost of necessary health care. The three types of this pension are called the low income pension, housebound benefits and aid and attendance benefits. The following are the general requirements for the housebound and aid and attendance benefit:
- The veteran must have served at least 90 days of active duty service one day of which must have been during a wartime period. In general wartime periods include the following: World War I, World War II, Korean War, Vietnam conflict, Gulf War.
- The veteran must have received a discharge other than dishonorable.
- The claimant must have limited income and assets available.
- The claimant must have a permanent and total disability at the time of application.
- The disability was caused without willful misconduct of the claimant.
- The veteran or widow signs and files an application with the Veterans Administration.
- Low Income Pension The low income pension is similar to the federal SSI benefit. In addition to the above general requirements, the claimant must be within the permissible income limits.
- Housebound Benefits
This benefit is provided to a veteran or widow of a veteran who is determined to be disabled and essentially confined to a home. This can be proven in one of the following ways:
- a single permanent disability rated as 100% disabling under the VA schedule and confined to a dwelling.
- a 100% disability with another 60% disability, regardless of whether or not the person is confined to a dwelling.
- Aid and Attendance Benefit
Aid and attendance benefits are available to a veteran or widow of a veteran who meets one of the following conditions:
- The claimant is blind.
- The claimant is living in a nursing home or assisted living facility.
- The claimant is unable to dress him or herself or keep him or herself clean and presentable; or is unable to attend to the wants of nature; or has a physical or mental incapacity that requires assistance on a regular basis to protect him or herself from daily environmental hazards.
- Income Limits For purposes of the income limits, the applicant’s countable income is all of their income, their spouse’s income and income of dependent children. Benefits will be denied if the countable income exceeds the limits. These limits are set forth in the VA Improved Disability Benefits Pension Rate Table and varies for each person. However, the countable income is reduced by unreimbursed medical expenses before making this determination. Such expenses would include doctors fees, dentist bills, prescription glasses, Medicare premium and copayments, prescription medications, health insurance premiums, transportation to doctors offices, therapy and funeral expenses. More significantly, the cost of home healthcare, assisted living cost and skilled nursing home bills are also included.
- Asset requirements There are also eligibility standards for the above veterans benefits relating to a person’s net worth. The standard is whether the person has “sufficient means” to pay for their own care. The net worth of both the veteran and the veteran’s spouse are considered under this standard. However, the value of the person’s home, furnishings and car are excluded. The VA law does not designate a specific dollar amount for the net worth standard. The determination of excess net worth is a question of fact for resolution after a consideration of all the facts and circumstances of each applicant. The relevant factors considered are as follows: income from other sources, family expenses, the claimant’s life expectancy and convertibility into cash of the assets. A commonly used measure and an amount that is specifically listed in the VA regulations is $80,000 or less of assets.
Comparison of VA to Medicaid
The aid and attendance benefit is most appropriate and helpful in a situation when the person has stable care needs with a cost of care that slightly exceeds their monthly income. The maximum amount possible is approximately $2000 per month. This may be very beneficial in an assisted living situation. However, if the person needs full nursing home care this amount will be insufficient to cover the full cost of care. Even if the aid and attendance benefit is appropriate at the present time, one must consider the likelihood that full nursing home care may be needed in the next five years. If so, then one must be careful not to advise any planning options that would jeopardize Medicaid eligibility during the next five years. For example, it may not be worthwhile to set up an irrevocable trust to get $2000 a month if the person will end up in a nursing home two years later. The transfer of assets to this trust would cause ineligibility for Medicaid for a five year period.
The VA pension program and Medicaid programs are both federal programs. However the VA pension is a national program with one set of rules and standards whereas Medicaid is a joint federal state program that varies from State to State.
The VA does not have any transfer penalty or five year lookback as do the Medicaid rules. Thus, a transfer to an irrevocable trust or other vehicle that would not be counted as an asset under the VA rules could be done just prior to the application for VA benefits.
© 2015 Michael Millonig, LLC