New VA Rues for LTC Go Into Effect This Month
“It’s going to be harder for veterans to qualify for a benefit that’s already little known.”
There are some new regulations for the Aid and Attendance program, a service that helps qualifying veterans cover long-term care.
Think Advisor’s recent article, “VA Is Tightening Rules on LTC Benefit for Veterans,” reports that these changes finalized by the Department of Veterans Affairs will place “an asset limit, a lookback period, and asset transfer penalties” for those who apply for VA pension benefits that require a showing of financial need. Aid and Attendance is at the top of the list of those benefits. This program can help veterans who require long-term care.
The program previously had income restrictions to qualify for the benefit, but now the new rules will add more administrative hoops. These new regulations limit veterans to a net worth limit of $123,600—the same as a Medicaid applicant’s spouse may keep. However, this dollar figure includes both the applicant’s assets and income. There are also revisions to policies for qualifying medical expenses to determine IVAP (the veteran’s household income minus all unreimbursed medical expenses).
In addition, the new rules place a three-year lookback period now on applicants. Therefore, if a person has transferred assets to protect themselves within that timeframe, they’ll be penalized by being denied benefits for up to five years. One exception is for transfers to a trust for a child who cannot “self-support.”
There are also new transfer penalties for any gifts and/or transfers that were made at less than fair market value (FMV).
The use of immediate annuities and planning strategies concerning gifting are also being limited.
The new rules went into effect on October 18.
Veterans should talk to their estate planning attorneys about any pending planning strategies and have them re-evaluated, in light of these rule changes. The report says, “The VA will disregard asset transfers made before that date. Applicants may still have time to get through the process before the rules are in place.”
Reference: Think Advisor (September 26, 2018) “VA Is Tightening Rules on LTC Benefit for Veterans”