Shalloway and Shalloway, P.A.

VETS & WIDOWS FACE NEW V.A. REGULATIONS CREATING NEW QUALIFICATIONS, PENALTIES

Veteran and his son

As proposed by the Veterans Administration, veterans applying for V. A. needs-based benefits may have to deal with new rules. The proposed new rules would establish an asset limit, a look-back period and asset transfer penalties for claimants applying for V. A. needs-based benefits.  At this time, there is no prohibition on transferring assets prior to applying for needs-based benefits.   An example of these needs-based benefits would the V. A.’s Pension and Aid and Attendance program.

The Veterans Administration tries to explain the new proposed regulations in the January 23, 2015 Federal Register. These proposed changes are in response to the 2012 Government Accountability Office (GAO)report which recommended changes to the current regulations “to maintain the integrity of Department of Veterans Affairs needs-based benefit programs.”

The proposed rules would set a thirty-six month look-back period and a penalty period of up to ten years for anyone who disposes of assets specifically to qualify for a V. A. pension. The penalty period would be calculated based on the total assets transferred during the look-back period to the extent that they would have exceeded a new net worth limit that the new rules would also establish.

Another reason for the new rules is cited as “to reduce opportunities for attorneys and financial advisors to take advantage of pension claimants.” The penalty period would be based on the total assets trans-ferred during the look-back period to the extent that they would have exceeded a new net worth limit that the rules also establish.   The proposed net worth limit would be equal to Medicaid’s maximum community spouse resource allowance (CSRA) that was in effect at the time the final rule is published and would be indexed for inflation.

The net worth of the claimant would be determined by adding the claimant’s annual income to his or her assets. These calculations by the V. A. would not include a claimant’s primary residence, including a residential lot area not to exceed two acres as an asset. In the event that the home is sold, net profit would be considered assets unless the profit was invested in another home in the same calendar year of the sale. A penalty period would start the first day of the month that follows the last asset transfer. The divisor would be the applicable maximum annual pension rate in effect as of the date of the pension claim.

The proposed rule also defines and clarifies what the Veterans Administration considers to be a deductible medical expense for all of its needs-based benefits. The proposed rule also includes statutory changes relating to pension beneficiaries who receive Medicaid provided nursing home care.

These proposed rules appear to be an effort to circumvent the U.S. Congress. Similar legislation proposed in the Congress has been stalled for at least two years.

To read the proposed rules in 80 Federal Register 3840-3864 (23 January, 2015), go to: http://tinyurl.com/elr-VA rules

Shalloway & Shalloway, P.A., is located in West Palm Beach, FL and serves clients in Palm Beach, Broward, Dade, Okeechobee, Martin and St. Lucie Counties.

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