A question that is frequently asked is whether a veteran is entitled to any long term care benefits. The answer is that a veteran who served during wartime in World War II, Korea or Vietnam is entitled to a benefit known as Aid and Attendance. The veteran need only have served one day during wartime and did not have to be deployed into the war zone to be eligible for this benefit. An honorable discharge is also a requirement. World War II ranges from December 7, 1941 to December 31, 1945. The Korean War started on January 27, 1950 and ended on January 31, 1955. The war in Vietnam for those who were not deployed to Vietnam began on August 8, 1964 and ended on May 7, 1975. For those in the military who were engaged in country, the war began on February 21, 1961. After Vietnam, the requirements to qualify for this benefit changed. The veteran had to be deployed to the war zone and comply with different requirements. To secure the benefit, the veteran or the spouse of the deceased veteran who was living with the veteran at the time of his death and who is not remarried must be at least age 65.
The benefit that is available to the veteran is significant. The veteran is eligible for a benefit of up to $21,446 per year. If both the veteran and the spouse are in need of aid and attendance, then they may be eligible for up to $25,448 per annum. Keep in mind that the spouse of a deceased veteran is eligible for a veteran's benefit of $13,794 per year if they are not in good health. The veteran or the spouse will need a physician to verify the state of their condition to qualify for this benefit.
Unlike the Medicaid rules which has a five year look back period, the VA rules have no such requirement. As a result, assets can be transferred to family members in order to satisfy the asset requirements under the VA aid and attendance rules. It is wise for couples to have assets other than their home and automobile that total less than $80,000. For a single person a safe harbor would be to retain assets of less than $50,000. The family home in which they are living and the automobile are exempt resources. There is no limit on the value or on the equity of the veteran's primary residence. Remember, in order for the surviving spouse to be eligible for this benefit they must have been married and living together at the time of the veteran's death. The spouse of the deceased veteran will be ineligible for the aid and attendance benefit if they remarry.
There are also income limitations that can significantly reduce the benefit available to the veteran or the veteran's spouse. The way that the income of the family is calculated allows for the reduction of that income for any expenses that are related to the cost of care of the veteran or the veteran's spouse. One way to help to reduce the family's income is to enter into an agreement which I call a care management agreement with a family member who manages the caregiving activities for the family. This expenditure coupled with medical and health related expenses can dramatically reduce the family income and allow the veteran to claim the maximum benefit available. This agreement must be in writing and specify exactly whch caregiving activities the family member is providing. A study should be done in the veteran's local community to determine the amount of fair compensation that should be paid to the family member. If the veteran or the spouse is in an assisted living facility or nursing home, the entire cost of this care would be available to reduce the family's income. Any payment received by the caregiver is subject to income taxes.
Veterans and their families should explore this benefit since it can go a long way toward providing sufficient cash flow to help the veteran and the spouse remain in the home for as long a period as possible. It can help the family afford the cost of an assisted living or nursing home facility.