Dear Mr. Miller:
I think I waited too long. My husband and I have been residing at an assisted living facility for a few years. We’ve been able to handle the costs up until about 6 months ago. That’s when he started needing more help–much more help. He can’t walk anymore, can’t take a shower and can’t dress without someone helping him. It’s too much for me to handle by myself. And, obviously, the facility charges more for that assistance.
He’s a veteran of the Korean War. I know there is VA Aid & Attendance that he could get. I was going to apply for him but just never got around to it. I just called an attorney and he said the VA program rules just changed this month and unless we are destitute we can no longer qualify.
Help! We need this money to be able to continue to survive.
Rules Change Effective Date
Net Worth Defined
Look Back & Penalty Periods
What are the potential solutions?
Give It Away & Wait
Hire Family Member as Caregiver
Partial Give Away & Shorter Wait
Consult Qualified Attorney Before You Act
Rules Change Effective Date: The person you called was at least partially right; the rules did change as of Oct 18, 2018. But I would disagree that one must be destitute. There are a number of available strategies that have been time tested in the analogous Medi-Cal arena.
Net Worth Defined: 1.Your net worth can not exceed $123,600 (increased with the cost of living). It used to be somewhere around $30,000 depending on your age and costs of care. Net worth is now considered to be your assets (other than your house, car, personal effects) and your annual income. Income is your actual gross income less your unreimbursed medical expenses. Medical expenses will, if the application is done right, usually include the costs of the assisted living facility, in home care, skilled nursing, medical insurance, drugs, etc.
Here’s an example: you have a $500,000 house and $200,000 in savings and securities. You have monthly income of $2500 and medical expenses of $4000 including the facility charges. You have no income for VA purposes as the medical expenses are more than your gross income (and negative amounts are ignored). The house does not count so you have $76,400 (200,000 – 123,600) too much. You are ineligible UNLESS we do something. See the below strategies.
Look Back & Penalty Periods: 2.You can no longer give away your assets the day before you apply. That approach will no longer work. There is now a 36 month look back period (similar to Medi-Cal’s 30 month look back period). The look back period runs backward from the date of application (with some exceptions). Any gifts made during that period will cause a penalty period to be applied during which you cannot receive this VA benefit. The penalty period is calculated by dividing the amount of the gift ($76,400 in our example) by the maximum pension VA could pay you (for a married individual with only one dependent, i.e. the spouse, for 2018 that is $2169). That results in a penalty of 35 months (we round down).
3. There are other changes but those two are the main ones.
Hire Family Member as Caregiver: 3.Assuming you have family members other than your wife, depending on the circumstances you may be able to hire them (and pay them) to help care for you. There are a lot of technicalities on this approach so you want a competent elder law attorney assisting you.
Partial Give Away & Shorter Wait: 4.You could give away to other family members (not your wife) about $38,000 and use the other $38,000 (76,000-38,000) to sustain yourself until the (now much shorter) 17 month penalty period (38,000/2169) runs its course. There are a number of calculations that go into this approach and a number of potholes to circumvent so don’t try to do this approach yourself.
Consult Qualified Attorney Before You Act: Bottom line, yes, now it is more difficult for many people to qualify but there are a number of approaches still available. Which one is right for you and the technicalities and potholes involved with each one make meeting with a qualified attorney imperative. Yes, the VA Rep or Veterans Service Organization Rep can give you basic information as to whether you are or are not eligible as you stand at that particular point in time. But if you are not eligible off the bat, they can’t help. Why? Because they are not attorneys and most of the solutions require an attorney’s analysis, execution, and coordination with Medi-Cal (so if you need that latter benefit in the future you haven’t created further problems).