Veterans who served during a period of wartime and are age 65 or older may receive a “pension” to help offset the costs of long term care. In order to qualify, however, a veteran’s income and assets may not exceed certain limitations. Currently, there is no penalty assessed against a veteran who transfers a substantial portion of his assets to family members or others in order to meet the asset limitation. However, in January of 2015, the VA issued proposed regulations that substantially change the way the VA will review asset transfers.
VA Proposing Penalties for Assets Transferred Below Market Value
The VA is proposing the imposition of a penalty for any assets transferred “for less than fair market value” in the 36 months preceding the submission of an application for pension benefits. As a result of this penalty, the veteran will be disqualified from receiving pension benefits for a period of time that is determined by the value of the assets transferred. Accordingly, the greater the value of the assets transferred, the longer the veteran have to wait before qualifying for a pension. The maximum penalty period that may be imposed by the VA is ten years.
Asset Limits for Veterans Pension Benefits
When evaluating a veteran’s net worth for pension purposes, the VA considers the assets of the veteran and the veteran’s spouse. While there is currently no specific limit on the amount of assets that a veteran and his spouse may own and still qualify for benefits, it has traditionally been assumed that a married veteran should have less than $80,000 in assets, while a single veteran may own no more than $40,000. The proposed regulations, however, establish a fixed net worth limit of $119,220. In addition, the veteran’s annual income is added to the value assets owned in calculating net worth.
Long Term Care Planning Addresses Long Term Care Concerns for Veterans
There is currently a great deal of uncertainty as to if and when these new regulations may become effective. What is certain, however, is that advanced planning is becoming more important for seniors who are concerned about the costs of long term care. To learn more about how you can protect your hard earned savings from the costs of long term care, call Joseph Motta at 440-930-2826 or email Joseph@JosephLMotta.com