Medicaid can be a great resource to help seniors pay for the cost of long-term care.  Sometimes, a couple or individual may have too much money to qualify for Medicaid or may only need a small amount of extra income to cover the cost of their care.  This is especially true if the senior is living at home or in an assisted living facility.

Another great resource for this group of seniors is VA Aid and Attendance benefits.  VA Aid and Attendance is a program that provides additional income to seniors whose medical expenses exceed their income.  It is formerly called VA Pension with an Aid and Attendance rating.  For purposes of this article, we will refer to it as VA Aid and Attendance.

A senior may qualify for VA Aid and Attendance benefits if he or she had qualifying military service. Additionally, the surviving spouse of a veteran may be able to qualify for Aid and Attendance benefits.

There are four main eligibility tests for VA Aid and Attendance benefits:

1. Service Test: The senior or the senior’s spouse must have been a “wartime veteran.”  This means that the veteran served 90 days or more of active duty with at least one day during a period of war time.  The veteran must not have been dishonorably discharged.  Today’s seniors may have served in World War II, the Korean Conflict, the Vietnam Era, or the Gulf War.  The chart below shows the relevant dates for each period of wartime.

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	February 28, 1961 through May 7, 1975 for veterans who served in the Republic of Vietnam during that time.  For all other veterans, the period of war is August 5, 1964 through May 7, 1975
Gulf War	August 2, 1990 through a date to be set by law or Presidential Proclamation

 

 

2. Disability Test: The veteran or the surviving spouse is considered “disabled” if he or she is 65 years or older.  However, to receive an increased monthly payment, the veteran or surviving spouse must either be housebound or need regular aid and attendance.

 

A housebound claimant is self-explanatory:  if the claimant is substantially confined to his or her dwelling and immediate premises and the confinement is likely to continue for his or her lifetime, he or she is considered housebound.

 

To qualify for the Aid and Attendance benefit, the claimant must need assistance with Activities of Daily Living (ADLs), such as bathing, feeding, dressing, toileting.  Other ways to qualify for Aid and Attendance are: if the claimant is bedridden, if the claimant is in a nursing home due to mental or physical incapacity, or if the claimant is blind.

 

3. Income Test: The VA considers countable family income for VA Aid and Attendance benefits.  Countable family income is the income received by the claimant and his or her dependents.  To the extent the claimant’s out-of-pocket medical expenses exceed his or her income, the VA benefit will supplement the income, up to the maximum benefit rate.  The greater a claimant’s need for assistance, the greater his or her monthly benefit will be.  To receive the maximum amount, the claimant’s net countable income must be $0 (that is, his or her unreimbursed medical expenses exceed his or her income).   The chart below shows the current Aid and Attendance maximum benefits.

 

If you are a…	Income for Veterans Affairs Purposes (IVAP) IVAP must be less than…	Maximum Allowable Pension Rate (MAPR) Maximum monthly payment is…
Single Veteran	$21,962 per year	$1,830
Veteran With Spouse/Dependent	$26,036 per year	$2,169
Two Veterans Married to Each Other	$34,837 per year	$2,903
Surviving Spouse	$14,113 per year	$1,176

 

 

4. Asset Test: Unlike Medicaid regulations, the VA regulations do not provide for a specific asset limit.  The general rule of thumb is that the household assets may not exceed $80,000.  The VA consults a life expectancy table and compares the claimant’s life expectancy to his income.  Certain assets, like the home, a vehicle, household goods and personal effects, are exempt assets for VA purposes.

 

If a veteran or the surviving spouse meets all four prongs, he or she can qualify for the monthly benefit to supplement his or her income.  This can be especially helpful to a senior who has moderate income and needs additional funds to pay monthly expenses.

For example, if a senior lives in assisted living, which costs $3,500 per month, and the senior has income of $2,500 per month, the VA Aid and Attendance benefit may be sufficient to make up the negative cash flow.  The senior will not need to apply for Medicaid, and he or she can still maintain some assets.  There is no estate recovery by the VA.

Additionally, the VA does not currently have a lookback period.  Medicaid has a five-year lookback, and any gifts or transfers of assets made within five years of the Medicaid application could penalize the individual and cause him or her not to receive Medicaid benefits for a period of time.  However, a senior can transfer assets and make gifts but still qualify for VA.

Many times, making transfers to qualify for VA benefits can be a part of a Medicaid five-year plan.  A senior may make transfers to reduce his or her assets below $80,000 and receive VA benefits with the intention of waiting five years before qualifying for Medicaid.  If five years pass from the date of the transfer, the transfer will not create a penalty for Medicaid eligibility.

If a senior residing in a nursing home qualifies for Medicaid, his or her VA Aid and Attendance benefit will be reduced to $90.  The individual will be able to keep this $90, plus $50, for his or her personal needs.  (See Medicaid 101).

Many seniors do not realize that the VA Aid and Attendance benefits are an available resource to help pay for the costs of long-term care.  The VA website has a database of accredited VA attorneys.  These attorneys, including the attorneys at Taps & Sutton, can provide guidance and help families plan for VA benefits.  VA accredited attorneys can also help an individual file a claim for benefits.