VA AID and Attendance
Many veterans and their families assume that there are no benefits for veterans unless they were either wounded in combat or suffered a service-connected disability. This is incorrect.
If you are an honorably discharged veteran who served at least one day during a period of wartime and if you are in an assisted living facility or are spending a significant amount each month for care in your home, then you may quality for benefits under the Veterans Administration Aid and Attendance program. This program is one of the VA's best kept secrets.
Aid and Attendance is available to a veteran who is disabled, and has the additional requirement of needing the assistance of another person in order to avoid the hazards of his or her daily environment (in other words, the veteran needs someone to help him or her prepare meals, bathe, dress, and otherwise take care of himself or herself).
The formal name for this benefit program is the "Non-Service Connected Disability Improved Pension" and the "Non-Service Connected Death Pension." It is commonly known as "Aid and Attendance". This disconnect between the official name for the program and every day language has caused much confusion. This confusion is one of the reasons that veterans can greatly benefit from having an advocate, such as an experienced Elder Law attorney, navigate the system for them.
The amounts of the Aid and Attendance benefit for 2010 are shown in the chart below. The amounts are usually adjusted annually.
Annual Benefit Amount
- Married Veteran $23,396.00
- Single Veteran $19,736.00
- Widow (er) of Veteran $12,681.00
The service requirements for the veteran are:
The veteran had to have served on active duty for at least 90 days. At least one of those days had to be during a period of war as defined for the program; see below. The veteran had to receive a discharge other than dishonorable.
NOTE: Service in combat is not required, only that the veteran was on active duty anywhere during wartime.
"Wartime Period" as defined for the Aid and Attendance program is as follows:
- Period of War Beginning and Ending Dates
- World War II December 7, 1941 through December 31, 1946
- Korean Conflict June 27, 1950 through January 31, 1955
- Vietnam Era August 5, 1964 throug May 7, 1975; for veterans who served "in country" before
- August 5,1964, February 28, 1961 through May 7,1975
- Gulf War August 2, 1990 through a date yet to be set by law or Presidential Proclamation
Medical Needs Test
All veterans over the age of 65 are considered disabled for the Aid and Attendance program. In addition, the applicant must have a medical need for assistance or supervision due to their disability. The applicant must be in need of the "aid and attendance of another person." This must be proven through medical evidence. This is accomplished primarily by a doctor's evaluation of the veteran or the surviving spouse. There is a specific form that must be filled out. However, it is important that the form be reviewed by someone familiar with the Aid and Attendance program prior to submission to the VA because if the applicant's medical needs are not outlined properly, benefits can be denied.
The household income of the veteran or the surviving spouse cannot exceed the "Maximum Allowable Pension Rate." In plain English this means monthly income cannot exceed the applicable monthly benefit amount. Unfortunately, often when veterans find this out, they conclude that their income is too high to be eligible for Aid and Attendance.
But the insider secret that most veterans do not know and that the VA often does not tell the veteran or surviving spouse is that they can reduce gross income by any un-reimbursed medical expenses when determining whether they meet the income test. This includes in-home care if the applicant cannot be left home alone, or the cost of assisted living if the applicant is residing in an assisted living facility. Other common medical expenses are: Medicare premiums deducted from the veteran's social security each month, Medicare supplemental insurance premiums, prescription drug insurance and co-pays.
The income test can be expressed as the following formula:
Gross Annual Household Income Minus Un-reimbursed Medical Expenses (Annualized) Equals Net Income for Veterans Administration Purposes ("IVAP" in VA jargon)
Another insider secret is that payments made by the veteran or surviving spouse under a "personal care contract" can be considered an un-reimbursed medical expense and deducted from gross income. A personal care contract is a contract between the veteran or surviving spouse and a family caregiver where the caregiver provides certain services in return for compensation.
Millions of Americans are currently caring for an elderly family member without receiving compensation. Most do not realize that the care they are providing is just as valuable and worthy of payment as care given by a for-hire service. The thought does not even enter their minds because they are providing the care out of love and affection. But the point of entering into the personal care contract is not for the caregiver to make money; the point is to create a "legal expense" where one did not exist before for the purpose of lowering countable income in order to be eligible for the Aid and Attendance benefit. Many of our clients to whom we recommend this strategy do not spend the money paid to them under the personal care contract; they hold it for the family member in case he or she should need it during the rest of his or her life.
The Asset Test
It is generally believed that, as a rule of thumb, a veteran's household assets cannot exceed $80,000 if married or $50,000 if single. However, there is no specific asset limit in the VA regulations. In the end, the decision as to allowable assets is a subjective one made by a VA service representative. This subjective decision-making process is called "age analysis." It is meant to take into consideration the life expectancy of the veteran and to extrapolate the veteran's income needs over that life expectancy. Therefore, it is often the case that an older person is allowed to keep fewer assets than a younger person. We generally recommend that our clients keep assets equal to 18 to 24 months of monthly income shortfall. For example, if the veteran, after considering his or her income and benefits, is going to be short $2,000 a month then he or she could have up to $48,000 in assets.
The home, personal property, and one automobile are exempted from the asset test. Included in the asset test are cash, savings and checking accounts, IRA's, CD's, cash value of life insurance, stocks, bonds, annuities, investment real estate, vacation homes, and all other forms of investment.
If the applicant has too many assets, assets can be gifted. Unlike Medicaid, there is no penalty imposed by the VA if the applicant gifts assets. However, the applicant must keep in mind that the VA is not going to pay the full cost of nursing home care. Therefore, if the veteran should go on to a nursing home and needs to apply for Medicaid within five years, the gift made for VA purposes can cause Medicaid disqualification. This is because Medicaid imposes a five year look-back period and imposes penalties on gifts made within that look-back period. An elderly veteran cannot lose sight of the fact that he or she may need Medicaid to pay for a nursing home one day. Coordinating the asset protection planning to maintain eligibility for both VA Aid and Attendance and Medicaid is tricky business. An experienced Elder Law attorney can coordinate both VA benefits and Medicaid benefits to preserve eligibility for both programs.