For a number of years, Roger Bennett has been accredited to represent veterans — and their surviving spouses and dependents — in benefit claims before the Veterans Administration (VA). Because Roger focuses on elder law, all of his cases have involved the kinds of VA benefits that may help a veteran or surviving spouse finance the cost of an assisted-living facility.
When asked about his clients’ needs, Roger said, “I’ve repeatedly found that they have already purchased some kind of annuity or have set up some kind of trust that was supposed to help them qualify for VA benefits, but really only put money in the pocket of the annuity agent or the attorney who prepared the trust. I’ve seen more inappropriate plans than appropriate.”
Roger explained that VA pension benefits — which have undefined resource limits for applicants — have been available even if a veteran gave away excess resources immediately before applying.
“Many veterans did [give away resources],” Roger added, “just to make certain that their resources were far enough under the blurry resource limit for them to qualify.”
The activity did not go unnoticed. The Government Accountability Office (GAO) noted an increase in the number of claims for needs-based VA benefits and, in a report released in May 2012, the GAO recommended that Congress enact a look back and penalty period. In response, bills were presented to Congress in 2012, 2013, and 2014. Had they passed, the bills would have allowed the VA to penalize gifts suspiciously close to the application.
This year, the VA proposed a regulation that would create a three-year look back. “Gifts within three years before the application could result in a penalty period of ineligibility,” Roger explained.
In response to the proposed changes, the National Academy of Elder Law Attorneys (NAELA) shared a memorandum that argued the look back period would require congressional preauthorization and would be successfully challenged in court without such preauthorization. The memorandum also criticized the poor implementation of the fundamentally sound idea to make the eligibility rules clear. Other major objections included:
- The presumption that transfers were made in order to become eligible for VA benefits.
- The proposal for calculating the penalty period for gifts disproportionately penalized surviving spouses.
- The proposal to limit expenditures for in-home healthcare to $21 per hour and almost exclusively for help with “basic activities of daily living” would deny quality care in lower-cost settings.
- The method for calculating the net worth of a veteran and spouse is significantly more restrictive than comparable methods used by Medicaid.
- Acreage limitations on home sites of veterans receiving benefits would result disproportionately in the denial of benefits to veterans in rural settings.
In addition to the objections raised by NAELA, the VA received more than 850 comments on the proposal. As required by the Administrative Procedures Act, the VA must consider all input before publishing a final rule with the proposed implementation date.
“The best current information is that the VA hopes to have that final rule published in February,” said Roger. “Meanwhile, the VA is not tipping its hand on what the revised regulations will look like. All we know is that penalty-free transfers before applying for benefits are likely coming to an end.”
Because the regulations can change quickly, Roger urges veterans and surviving spouses to seek counsel. “It is vitally important to get your VA advice from somebody who’s keeping up with the rapidly changing scene,” he said.
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