New VA Pension Benefit Rules

As of October 18, 2018, the new VA Pension Benefit Rules are now in place. These new rules make it much clearer for claimants to understand the financial eligibility rules when applying for the VA benefit, specifically the VA Aid and Attendance Benefit, that assists eligible Veterans and their surviving spouses with paying for long-term care.

The stated intent of these new rules is “to maintain the integrity of the pension program” and respond to GAO recommendations, which specifically included making people more aware of the pension benefits. In this article, we will cover the new Net Worth rules. Next month, we will cover the new look-back and penalty period.

Net Worth and Transfer Rules:

In the past, unlike the federal Medicaid program, the VA pension program did not have definitive eligibility figures. With these new rules, there is finally an exact, maximum amount of assets that an applicant may own in order to be eligible for benefits. Net Worth for VA pension purposes will be equal to the maximum community spouse resource allowance (“CSRA”) amount, which is currently $123,600. The CSRA is scheduled to increase each year and follows the same increase as the Social Security benefit increase.

The new Net Worth CSRA of $123,600 is equivalent to the current Medicaid “Community Spouse Protected Amount” or “CSPA.” However, unlike Medicaid, for which the CSPA is the amount protected for the “Community Spouse,” for married couples, the CSRA applies to all applicants, regardless of marital status. This means that a single individual Veteran can have $123,600 of assets in his/her name and still be eligible for the VA Aid and Attendance benefit.

It is important to note how “Net Worth” is defined for VA purposes. Net Worth includes all income and assets. The term “assets” is defined as the fair market value of all property owned by claimant and any dependents minus any mortgages and other encumbrances. This means that the assets of any dependents, such as children or parents, will be counted when calculating Net Worth. Including the assets of dependent children and parents in the calculation of Assets is very different than the Medicaid program which does not include assets that do not belong to the applicant or applicant’s spouse.

The home that the applicant resides in will be excluded from the asset calculation and not considered part of the applicant’s Net Worth. Additionally, the applicant may keep a “reasonable lot area,” meaning, not more than 2 acres, unless the additional acreage is unmarketable. However, unmarketable is not defined in the new rules.

Also excluded from the calculation are personal effects and family transportation vehicles. Since “vehicles” (plural) is used, it seems that perhaps the applicant and dependents may be able to keep more than one vehicle without the value of the additional vehicles adding toward the total asset amount.

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