Help for Veterans & Their Families

Article submitted by Frank Scotto at (303) 793-3371 or email him at fscotto@lifecertain.com

In my financial planning practice, I frequently meet seniors who have health issues that make it difficult to live independently. If medically appropriate, most seniors, given the choice, prefer to live at home or in a community like an assisted living facility (ALF) rather than a nursing home. However, many seniors cannot afford home health care or the monthly cost of an ALF, and Medicare has limited home health care benefits. Medicaid provides very little in home and community-based assistance. This can make planning difficult.

There is a resource available for wartime veterans that is not used nearly enough. Its availability is like classified information; few know about this excellent potential source of funds for paying for health care help (either at home or in an assisted living facility) for seniors, who are veterans, or for widows and spouses of veterans. For those veterans and widows who are eligible, these benefits are need-to-know information.

This Veterans Affairs benefit has nothing to do with having a service-connected disability. I am discussing non-service connected benefits. More specifically, I am discussing the "aid-and-attendance" or "housebound" program that is available to a veteran who requires the assistance of another person in order to avoid the hazards of his or her daily environment.

Under this program, a married veteran can receive a maximum of $1,743 per month in benefits, and a single or widowed veteran can receive up to $1,470 per month and an unmarried, surviving spouse can receive up to $945 per month. These benefits will be received income tax free.

Service Requirements
In general, to qualify, a veteran must have 90 days or more of active duty under other than dishonorable conditions, one day of which was during wartime.

Disability Requirements
A veteran must be determined to be "permanently and totally disabled." The VA generally will accept a letter from the person's doctor as to the veteran's disability.

The letter, with complete medical diagnosis, should state that the person has an incapacity that requires care or assistance on a regular basis to protect the claimant from the hazards or dangers incident to his daily environment.

He or she needs to only show that they are in need of aid and attendance on a regular basis. A patient in an assisted living facility is presumed to have this need.

Net Worth Requirements
The VA considers the financial assets of the applicant and will deny the application if the net worth is such that part of it could be consumed for the applicant's care. As a general rule, $50,000 is the asset threshold. The home is not counted as an asset.

In other words, the VA will rarely deny a claim if assets are less then $50,000. There is no penalty period for transfer of assets, so assets above $50,000 can be transferred to family members without a "look back" period. The application simply asks for the assets of the applicant on the date of application and does not inquire as to previous transfers.

Income Requirements
The general rule is that even if the applicant fulfills all of the above requirements, the application will be denied if the veteran's countable income exceeds the maximum annual pension rate, which is currently $1,743 per month for a married veteran in need of aid and attendance.

Countable income is all income of any kind attributable to the veteran. However, in computing the income of the applicant, certain items can be deducted from income. Specifically, un-reimbursed medical expense paid by a veteran or spouse may be used to reduce a veteran's other income.

Many items constitute unreimbursed medical expenses. Included in this list are: doctor's fees, dentist fees, eye glasses, Medicare deduction, co-payments, prescriptions, transportation to doctors, therapy, and health insurance and funeral expenses.

Also included in un-reimbursed medical expenses are the costs of the ALF or in-home aid, as long as there is a need for assistance verified by medical evidence. Obviously, these can make up a big portion of the un-reimbursed medical expenses.

Using the VA Benefit to Pay for an Assisted Living Facility
For example, Mr. and Mrs. Veteran live in Alfreda Assisted Living Apartments. They have income of combined social security of $1,900 per month and assets of $50,000. Mr. Veteran is in need of an aide in the home because he needs the help and attendance of another person on a regular basis. The aide costs $600 per week or $2,400 per month.

Additionally, Mr. and Mrs. Veteran have un-reimbursed medical expenses as follows:

• $150 for health insurance
• $50 per month for transportation
• $700 per month for prescriptions
• $2500 per month facility expense

With their un-reimbursed medical expenses reaching a total of $3,400 and their income being only $1,900 per month, they have a deficit of $1500. Therefore, they would be entitled to the full $1,743 per month.