27 May 2011|
Memorial Day, originally called Decoration Day, is a day of remembrance for those who have died in our nation's service. As we have just had our weekend of remembrance and barbeques, I thought it appropriate to talk about veterans benefits for those who served and their families.
Veterans benefits fit into two groups: Veterans Health Agency and Veterans Benefit Agency. Many of us are aware of Veterans Health Agency through VA Hospitals and clinics. But many of us may not be aware of the variety of and complexity of financial benefits available to veterans and their families under the Veterans Benefit Agency.
The Veterans Benefit Agency has two main financial compensation programs. One is for service-connected disabilities, which are available only to the veteran, and also includes Dependency and Indemnity Compensation for surviving dependent family members (spouse, children, and parents) of a deceased veteran. The second program is a welfare program for the veteran or his or her surviving spouse and does not require that the disability of the Veteran be connected with military service.
The first program is for the veteran who has sustained a total and permanent disability that is connected to active military service during a time of war. This program is more liberal, as it covers injuries and illnesses while on leave as long as the vet was not engaged in criminal or wrongful activities. The benefit is determined based on the level of disability of the vet, and can be claimed at any time. For the survivors (dependent family members, including a spouse, children and parents), benefits are available under the Dependency and Indemnity Compensation (DIC) program.
DIC benefits are payable for dependent family members of a deceased veteran who died either while on active military duty or due in part to a service connected disability. The disability of the vet must have been rated 100% service connected before death.
The second benefit is actually two different programs. The first is a Housebound Supplement (the best kept secret of all Veterans Benefit Agency programs) and the other is an Aid and Attendance Supplement for the veteran and his or her spouse who is in a nursing home, or needs assistance with the basic activities of daily living (ADLs) or is blind. Neither of these benefits require a service-connected disability; you just have to be disabled or age 65 or older and―this is why this is a welfare program―financially needy.
Financially needy means we must test to see if the veteran and his or her spouse and other members of his or her household have income and asset levels below certain levels. Assets that you own or control count here, as well as the age and life expectancy of the veteran or spouse and if there is an income deficit after paying for nursing care, medical care, etc. Because life expectancy is measured by VA tables (not IRS or life insurance tables) there is no real limit on the amount of assets (which is often stated as $80,000 for married couples and $50,000 for single people, but because of life expectancy and income deficits these limits can be higher or lower).
Planning techniques often include gifting, but you cannot give assets to your spouse, or any relatives who live in the same household as the vet or spouse. One big hazard is that unlike Medicaid (the welfare program jointly operated by the states and the federal government), there is no “look-back” periods for gifts. Because of this, many so-called “application assistance services” that sell insurance products like annuities may cause you to be disqualified for Medicaid. Medicaid has a look-back period on gifts (up to 60 months in most states) and Medicaid is a bigger payer, especially for nursing home care. So, do not apply for these benefits without understanding that the need for and eventual qualification for Medicaid is almost always necessary.
A major problem with applying for Veterans Benefit Agency programs is that federal law does not allow anyone to charge a fee in connection with the “preparation, presentation or prosecution” of VA claim for benefit. Because of this, consider the following:
When considering any of these benefits and whether you qualify for them, look to a Veterans Administration accredited attorney, who is an independent practicing lawyer who has been accredited by the VA to do pre-planning for your application for benefits and to do appeals should your application be denied. As mentioned earlier, there are some “annuity salesman” out there who say that they will help you to apply for benefits “for free.” Beware―annuities pay from 3% to 15% commission to the agent or salesperson, so they have a big incentive to market this to you. An attorney charges by the hour, so you know exactly what it is costing you to pre-plan. Plus an attorney who is also familiar with Medicaid laws in your state will be taking in consideration whether or not Medicaid planning and application is also going to be needed now and in the future.
Veteran’s Service Organizations (VSO) will help you to apply for free, but can’t help you with pre-planning to get qualified and cannot represent you in an appeal. Most attorneys who are accredited by the VA for pre-planning and appeals may not help you to make out the application for any of these benefits, so the attorney may still refer you to a VSO after pre-planning once you are ready to make an application.
Because it takes a year or longer to get these benefits going, you want to do all you can to avoid having your application denied. Thus, pre-planning is critical.
Some home care companies will help you to apply for benefits, and may even provide services to you while your claim is being processed. Ask lots of questions, such as if you are you stuck with only using them for your services after your claim has been approved, or if you have to use the entire benefit to pay this company for home care, or whether you have the option to use some of it to pay for transportation, medicine, and other home care services.
I hope all of you enjoyed Memorial Day and the weekend just past. Don’t forget to stop and thank a recruit, a reservist, an active duty military person, a veteran, or his or her surviving family for their service, as this holiday is for remembering the ultimate sacrifice these men and women have made to keep us safe and free.