On Memorial Day we honor military veterans, and especially the wartime sacrifices they made to preserve our liberty. Laws have been passed to entitle veterans to special benefits and pensions. However, the United States Department of Veterans Affairs (the VA) has been inefficient.
A recent Senate press release said that the average wait time for first time disability claims is between 316 and 327 days. The number of unpaid claims over a year old has increased, despite Congress giving the VA a 40% increase in funding. Time magazine reported that the VA and the Department of Defense have been unable to implement a unified record keeping system, despite the investment of more than $1 billion over four years.
While much of the publicity of the VA backlog has focused on the service-related claims of veterans returning from Iraq and Afghanistan, claims of veterans who served during World War II, the Korean War or the Vietnam War are being delayed too. Some of our clients have had claims paid within six weeks, while others are still waiting after one year.
Older veterans who served on active duty during a war are eligible for a special pension, which can provide more than $25,000 per year to reimburse medical expenses that are not covered by Medicare. Surviving spouses, who did not divorce the wartime vet or remarry after the vet’s death, are eligible for about half that amount.
Financial limits apply and a detailed application is required. Qualified applicants must be aged 65 or disabled, have significant dementia, or have a well-documented need for help with two Activities of Daily Living (ADLs). The ADLs are: bathing with a sponge, bath, or shower; dressing; toilet use; transferring in and out of bed or a chair; urine and bowel continence; and eating.
Persons who receive care in a licensed Personal Care Home or Skilled Nursing Facility can easily document their need for help with ADLs. Those who live independently might need more proof than the basic medical form, which is completed by a physician.
Neal Delisanti is the Director of Cumberland County Veteran’s Affairs Office, which is separate from the VA. Delisanti and his assistant, Sharon McLaughlin, are a great source of free information about Veterans’ benefits (717-240-6178). They can process a claim efficiently for those veterans who have less than $80,000 in total assets other than their home, along with significant expenses for help with their ADLs.
The VA’s current rules allow Veterans who have more than $80,000 to give away their excess assets or convert assets into income. However, the gifting of assets violates the rules of the Medicaid program, which offers more financial help than the VA, and can be necessary to pay for care in a Skilled Nursing Facility. Because an unexpected stroke or orthopedic injury can require permanent relocation to a Skilled Nursing Facility, it is best to get help from an elder law attorney to consider Medicaid rules before making any gift or annuity purchase to qualify for the VA benefits.
Despite warnings from the America Association of Retired Persons (AARP) and others, bad advice is still given to veterans who want to qualify immediately for this special pension. There are two common mistakes that veterans make.
Some veterans give their assets to their adult children, assuming that they will be able to get them back if they are needed. But if the veteran’s child gets divorced, becomes bankrupt, is sued, injured, or gets into an unexpected situation which causes the assets to be encumbered, other family members can become liable for the future cost of the veteran’s care. There are too many unforeseeable issues to use the word never, as in “my child(ren) would ‘never’ allow my assets to be lost or encumbered.”
A second mistake, which is encouraged by annuity salespersons, is to convert excess assets into allowable income through the use of an annuity. The VA is tolerant of annuities and has few restrictions. Unfortunately, most annuities which are acceptable to the VA can cause a vet to be ineligible for Medicaid. Financial consequences are expensive.
Our previous articles have explained why the purchase of an immediate annuity is generally not a good investment for a person who is old enough to receive Social Security. Immediate annuities which are compliant with Medicaid regulations should be used for such persons. However, because such annuities pay lower commissions to salespersons and are issued by B-rated insurance companies, they are not offered by investment advisors.
Confusion and frustration can occur because the regulations between the VA programs and the Medicaid program are different. Senate Bill 3270 was introduced in 2012 to add restrictions to the VA requirements. However, even if adopted, that legislation would not resolve all the confusion and contradictions between the VA pension and Medicaid.
A difference of opinion exists about what level of benefits should be extended to wartime veterans. Elder law attorneys know how the current laws can be applied through the use of trust planning so that the combination of a veteran’s wartime service and a documented need for care can be enough to entitle the veteran to immediate eligibility for the benefits. Although some persons believe that veterans should spend their assets on care to below $80,000 before qualifying for the pension, the present law does not actually require that.
It is illegal for any person or organization to charge a fee to file the basic VA claim application; and it is unethical to claim to have an inside track in doing so. The Cumberland County Veteran’s Affairs office can get priority attention if needed. Our friends inside the VA have advised us how to involve an applicant’s Congressional office if a claim has not been paid within six months.
We encourage caregiving families of wartime veterans or their surviving spouses, who presently have unreimbursed medical expenses for help with ADLs, to inquire immediately to discover how they can qualify now to get the benefits their veteran earned from wartime service.