IN Peters Township December 2018/January 2019 | Page 37

INDUSTRY INSIGHT LONG-TERM CARE SPONSORED CONTENT NEW RULES MAKE IT HARDER FOR VETERANS TO QUALIFY FOR LONG‑TERM CARE BENEFITS T he Department of Veterans Affairs (VA) has finalized new rules that make it more difficult to qualify for long-term care benefits. The rules establish an asset limit, a look-back period, and asset transfer penalties for claimants applying for VA pension benefits that require a showing of financial need. The principal benefit for those needing long-term care is Aid and Attendance. The VA offers Aid and Attendance to low-income veterans (or their spouses) who are in nursing homes or who need help at home with everyday tasks like dressing or bathing. Aid and Attendance provides money to those who need assistance. Currently, to be eligible for Aid and Attendance, a veteran (or the veteran’s surviving spouse) must meet certain income and asset limits. The asset limits aren’t specified, but $80,000 is the amount usually used. However, unlike with the Medicaid program, there historically have been no penalties if an applicant divests him/herself of assets before applying. That is, before now, YOUR SYMBOL OF PROTECTION Are you worried about losing your home or life savings to the cost of long term care? Are you a veteran or spouse of a veteran? If the answer is yes, we can help. What's at risk? Only everything you own Protecting People, Property, & Life Savings 724-942-6200 PittsburghElderLaw.com you could transfer assets over the VA’s limit before applying for benefits and the transfers would not affect eligibility. This is not the case anymore. The new regulations set a net worth limit of $123,600, which is the current maximum amount of assets (in 2018) that a Medicaid applicant’s spouse is allowed to retain. However, in the case of the VA, this number will include both the applicant’s assets AND income. It will be indexed to inflation in the same way that Social Security increases. An applicant’s house (up to a two-acre lot) will not count as an asset, even if the applicant is currently living in a nursing home. Applicants will also be able to deduct medical expenses, which now include payments to assisted living facilities as a result of the new rules, from their income. The regulations establish a three-year look-back provision. Applicants will have to disclose all financial transactions they were involved in for the three years prior to their application. Those who transferred assets to put themselves below the net worth limit within three years of applying for benefits will be subject to a penalty period that can last as long as five years. This penalty is a period of time during which the person who transferred assets is not eligible for VA benefits. There are exceptions to the penalty period for fraudulent transfers and for transfers to a trust for a child who is unable to “self-support.” Under the new rules, the VA will determine the penalty period in months by dividing the amount transferred that would have put the applicant over the net worth limit by the maximum annual pension rate (MAPR) for a veteran with one dependent in need of aid and attendance. For example, assume the net worth limit is $123,600 and an applicant has a net worth of $115,000. The applicant had transferred $30,000 to a friend during the look-back period. If the applicant had not transferred the $30,000, his net worth would have been $145,000, which exceeds the net worth limit by $21,400. The penalty period will be calculated based on $21,400, the amount the applicant transferred that put his assets over the net worth limit (145,000 minus 123,600). The new rules went into effect on October 18, 2018, and the VA will disregard asset transfers made before that date. Veterans or their spouses who think they may be affected by the new rules should contact an elder law attorney immediately. Carrie Conboy is an associate attorney with the elder law firm of Zacharia Brown P.C. Zacharia Brown is one of the oldest, most established elder law firms in western Pennsylvania. The practice focuses on Medicaid eligibility, Veterans Benefits planning, estate administration, and estate planning including wills, powers of attorney, living wills, and trusts. Pittsburgh-area office locations include McMurray, McKeesport and Wexford. Phone: [phone] Website: www.pittsburghelderlaw.com E-mail: [email protected] PETERS TOWNSHIP ❘ DECEMBER 2018/JANUARY 2019 35