As of October 18, 2018, new rules will go into effect that will change eligibility guidelines for VA pensions. The changes apply to all types of VA pensions.
VA pensions are available to wartime veterans and their surviving spouses. The money is tax-free and can be used for any purpose. The Basic pension is available to wartime veterans who are either 65 years old, live in a nursing home, receive Social Security disability benefits, or have a total and permanent disability not related to military service.
In addition to the Basic pension, there are the Aid & Attendance pension and the Homebound pension which function as an add-on to the Basic pension and have additional eligibility requirements.
All of these pensions have additional requirements that test for an applicant’s financial need. The new rule changes affect these financial eligibility guidelines.
As part of the new guidelines, applicants’ total assets will have to be under an asset cap of $123,600 for 2018 applicants. The asset cap includes the assets of both the veteran and their spouse. While certain assets, including a primary residence, do not count toward the asset cap, the asset cap does include most other financial assets such as, bank accounts, investments, and additional real properties. Under the previous rules applicants were evaluated on their need on a case-by-case basis.
The new guidelines also include a look-back period when evaluating an applicant’s compliance with the asset cap. Under the look-back rule, any assets transferred out of the applicant’s name in the previous three years for less than their fair market value, i.e. gifts and below market transfers, will be added back when evaluating if an applicant is under the asset cap. The look-back rule will only apply to transfers made after October 18, 2018.
VA pensions also have an income cap that restricts eligibility. The new rules do not change the amount of the cap, but increase the number of items that can be deducted from an applicant’s income to fit under the cap. These new deductions will include expenses for service animals, independent living fees, expanded caregiver expenses, and health care related expenses.
Applying for a VA pension is a complex process. Applicants should work with an experienced attorney to help guide them through the complicated requirements. An attorney can work with applicants to develop a plan to make sure that an applicant meets the new eligibility requirements and avoids any potential pitfalls.
To start your VA pension application process, please call Martha C. Brown & Associates at (314) 962-0186.