and Related Benefits and Issues
© NVLSP 2014
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VA Pension Program Designed to provide supplemental income to wartime
vets who are either: 1. 2.
Totally and Permanently disabled Who are over the age of 65
Pension is a needs-based program similar to
Supplemental Security Income (SSI) from the Social Security Administration (SSA) © NVLSP 2014
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VA Pension Program Differs from VA’s comp program because the total and
permanent disability does not need to be connected to the Vet’s service in order to receive the pension benefit Vets 65 and older are presumed to be permanently and
totally (P&T) disabled for purposes of receiving pension benefits
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Three Pension Programs – Improved Pension Improved Pension: eligible vets and survivors get the
maximum annual pension rate (MAPR) reduced by recipient’s income As of 12/1/13, MAPR for vet with no dependents: $12,652 Higher MAPR for vets with dependents If income higher than limit, pension totally offset
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Three Pension Programs – Section 306 and Old Law Pension Section 306 Pension: earned income of spouse not
counted but unearned income (i.e. Social Security) is counted Operated from 7/1/60 – 12/31/78
Old Law Pension: operated before July 1, 1960
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Improved Pension In effect for all claims filed after 12/31/78 Eligibility: 90 consecutive days of service, 1 of which during period of war; or total of 90 days active service during one or more periods of war; or at least 1 day of wartime service resulting in discharge for SC disability. Note: Vets who enlisted for first time on or after 9/1/80 required to complete 24 months of continuous service or full period for which vet was called/ordered to active duty. © NVLSP 2014
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Improved Pension In effect for all claims filed after 12/31/78 Eligibility (continued): P&T or unemployability (not due to willful misconduct); and Limited income & net worth Special monthly pension (SMP) available for vets who
require Aid and Attendance (A&A) or meet housebound requirements
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P&T Disability VA must presume vets P&T for pension if: Vet in nursing home for long-term due to disability Vet determined disabled for SSA benefits Vet unemployable as result of disability to continue during life Vet suffering from permanent disability making impossible to be gainfully employed or any disorder that the Secretary determines P&T
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P&T Disability No P&T requirement for vets 65 or over Vet 65 or over who meets military service &
income/net worth requirements is eligible as if P&T
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Income Calculations All income included unless specifically excluded All spousal income included Exclusions: Public or private welfare Value of maintenance payments VA pension program payments Unreimbursed medical expenses in excess of 5% MAPR Child’s income
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Net Worth No precise figure, instead based on facts of case VA uses rule of thumb: $80,000 Calculated as market value, less encumbrances, of all
real estate and personal property excluding dwelling and personal effects
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Possible “ Look Back” Period Potential future development – Congress may
introduce a “look back period” of 3 years Current bills - H.R. 2341 and S. 748, “Veterans Pension
Protection Act”; hearings held in June 2013; still pending If passed – this would make important changes to 38
U.S.C. § 1552 governing financial eligibility for the pension program © NVLSP 2014
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Possible “ Look Back” Period Would make any vet who transferred assets for less than market value within some specified amount of time prior to applying for a pension benefit ineligible for the VA pension for a “penalty period” where they are ineligible for pension benefit
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Possible “ Look Back” Period In May 2012 the GAO issued a report and offered
several recommendations to the VA Vets must be more specific about their asset transfer
prior to applying for a pension. VA should “establish more specific criteria for what is considered a reasonable period of time for pension claimants to use up their financial resources before becoming eligible for pension benefits.”
GAO - the ability of “veterans to transfer significant
assets prior to applying for a VA pension…seems to circumvent the intended purpose of the program and wastes taxpayer dollars.” © NVLSP 2014
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Possible “ Look Back” Period In Congressional testimony, VA said that it supports in
principle the “look back” and “penalty period” VA had concerns, however, with the way the legislation
was written, as it relates to the how the length of the penalty period is calculated As of now, all legislation relating to the “look back”
period is currently pending © NVLSP 2014
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IRS Disclosure to VA VA uses income matching program with IRS to
identify discrepancies If find discrepancy, VA required to notify vet before
reduction VA has option in outrageous cases to ask for treble
damages © NVLSP 2014
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Advising Elderly Vets Advocates for elderly vets need to carefully plan actions a
vet should take because entitlement to VA benefits may impact non-VA benefits Entitlement to VA monthly disability payments due to
entitlement to SC comp, NSC pension, and VA medical care can have an impact on estate planning, efforts to protect assets, incapacity planning, and long-term care planning © NVLSP 2014
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Advising Elderly Vets Advocates are advised to suggest elderly clients to
consult with an elder law attorney because elderly vets may need legal assistance with advance directives, living wills, heath care surrogates, etc. Advocate should, at request of client, consult with an
elder law attorney to best serve vet or vet’s surviving spouse
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Factors for Advocates to Consider Under current law, there is no “look back” - VA looks
only at assets from date of application, not past assets; Medicaid has look-back period for assessing assets
But see previous slides re proposed legislation
Medicaid look-back period is 60 mos. For transfer
(gifting) of assets made on or after 2/8/06
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Factors for Advocates to Consider IRS imposes gift tax on gifts exceeding $14,000/person
per year & lifetime limit of $5.34M State gift taxes should be considered
Medicaid imposes penalty period if gifts not made to
certain people/trusts During penalty period, individual not eligible to receive
Medicaid benefits
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Factors for Advocates to Consider Possible to eliminate Medicaid penalty period by
showing: Intended to dispose of assets at fair market value or
valuable consideration; Assets transferred for purpose other than qualify for med assistance; or All assets returned
Possible to eliminate Medicaid penalty period with
give-back or return of gift © NVLSP 2014
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Factors for Advocates to Consider Most medical expenses of claimant can be deducted
from income Vet who needs nursing home care because of SC
condition entitled to free VA home care Vet at 70% for SC condition entitled to free VA home
care
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Factors for Advocates to Consider Vets permitted to file claims for increase to SC
conditions VA pays minor burial benefit of $700 to some vets;
burial benefit of $2,000 for vet’s death caused by SC condition Vets who receive VA compensation benefits or vets
who have received a Purple Heart eligible for free VA medical care © NVLSP 2014
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Factors for Advocates to Consider Vet or surviving spouse doesn’t have to be in nursing
home to receive increased pension because of A&A No requirement vet or surviving spouse in nursing
home to get NSC pension + A&A
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SMP Long-Term Care NSC pension benefits available to offset or cover most
of cost of long-term care Vets in need of nursing home care, assisted living or
home care entitled to VA pension + A&A even if income higher than limits by deducting almost all of care costs
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SMP Long-Term Care Award of VA pension + A&A covers some cost of
nursing home case and most cost of home care & assisted living Vets can reduce net worth by transferring interest and
control of assets prior to application
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SMP Long-Term Care VA General Counsel held intent of transfer not issue
for VA consideration Children and spouses of elderly vets should consult
with elder law attorney before taking transfer action Also be aware of possible legislation imposing “look
back” and therefore regulating asset transfers
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Pension + A&A Increasingly middle class benefits because vets with
significant income and assets eligible due to high costs of long-term care
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Dependency and Indemnity Compensation (DIC) An individual who qualifies for DIC is: A surviving spouse A surviving child A surviving parent
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Dependency and Indemnity Compensation (DIC) Eligible surviving spouse is first in line to receive DIC
benefits DIC benefits may be increased to reflect surviving
children
To qualify as a surviving spouse you must be a valid or
deemed valid spouse of vet at time of death
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Dependency and Indemnity Compensation (DIC) In addition, a surviving spouse may have to satisfy one
or more of 3 additional requirements: 1.
1 year of marriage to the vet;
2.
continuous cohabitation with vet during the marriage; and
1.
in limited cases, no remarriage after vet’s death.
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Dependency and Indemnity Compensation (DIC) If there is no surviving spouse, then a surviving child is
next in line for DIC To qualify as a surviving child: must be a biological child; or adopted child; or a stepchild of a veteran
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Dependency and Indemnity Compensation (DIC) Child must also be unmarried and of a qualifying age Under the age of 18 OR Between the ages of 18 and 23 if pursuing a course of education) OR
Child who became permanently incapable of self-
support before reaching the age of 18. A child permanently incapable of self-support is known
as a “helpless child.” © NVLSP 2014
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Dependency and Indemnity Compensation (DIC) Dependent parent may also apply for DIC. Eligibility requires parental relationship to vet, and Parent’s financial dependency or income eligibility.
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Dependency and Indemnity Compensation (DIC) May apply for monthly DIC from the VA for: 1.
A death that occurred during the vet’s service
2.
The SC death of a veteran – requires evidence
3.
The death of a vet whose SC disability was totally disabling for 10 years prior to death © NVLSP 2014
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Dependency and Indemnity Compensation (DIC) No time limit for filing a DIC claim However, if a DIC claim received by the VA within 1
year of the vet’s death and the survivor is ultimately granted benefits… the survivor will be entitled to receive retroactive
benefits back to the first day of the month following the month in which the vet died
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Burial and Memorial Benefits Intended to assist survivors in meeting the funeral costs
associated with vet’s death VA can provide the following burial benefits for eligible
claimants: A burial expense allowance for non-SC deaths Up to $700 for deaths on or after 10/1/2011 (if hospitalized by VA at time of death), or $300 (if not hospitalized by VA at time of death) A burial expense allowance for SC deaths and deaths that occurred in service Up to $2,000 for deaths on or after 9/11/2001, or up to $1,500 for deaths prior to 9/11/2001 © NVLSP 2014
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Burial and Memorial Benefits VA may also provide the following burial benefits for
eligible claimants: A plot or interment allowance Burial in a national cemetery Free headstone or reimbursement for privately
purchased headstone Payment for transporting remains
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Questions?
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