• Medicaid Planning Medicaid Applications Long-Term Care

  • Nomination of Guardians for Minor Children

  • Wills And Trusts Powers Of Attorney Health Care Documents

  • VA Aid and Attendance Pension Eligibility Planning Claim Filing

2018 VA Aid and Attendance Pension Rule Change

The Veterans Administration (VA) has changed their non-service connected pension benefit (sometimes called “Aid and Attendance”) eligibility rules. These changes will take effect October 18, 2018.

NET WORTH LIMIT

The new net worth limit will be the maximum Community Spouse Resource Allowance (CSRA) that is used by the Medicaid program. Currently, this is $123,600.

The old rule considered life expectancy, negative monthly cash flow, and other similar factors. Often an $80,000 limit was referred to even though this was never supported by the rules.

Now that there is a set net worth limit, there will be less confusion concerning who is eligible. Hopefully this will help make the application process quicker. All claimaints will need to have $123,600 or less in order to qualify. If they have more than this limit, they will need to decrease their net worth to be eligible for pension.

LOOK-BACK AND PENALTY PERIODS

There will now be a period of ineligibility imposed if a claimant makes an uncompensated transfer during the 3-year lookback period. An uncompensated transfer might be moving money into an irrevocable trust or an immediate annuity.

If a claimant made an uncompensated transfer during the 36-month lookback period, the penalty period will begin the month after the last transfer occurred. The maximum penalty period will be 5 years (60 months).

The penalty period will be determined by taking the total of the uncompensated transfers during the lookback period and dividing it by the Maximum Allowable Pension Rate (MAPR) in effect on the date of the pension claim at the aid and attendance level for a veteran with one dependent. This MAPR is currently $2,169.

For example, if a claimant had gifted his son $32,550* two years before filing the “Aid and Attendance” claim, he would be ineligible for pension for the next 15 months ($32,550/$2,169=15 months).

*Only transfers above the net worth limit will be penalized.

PURCHASING AN ANNUITY
A quick way to gain eligibility for VA pension used to be purchasing an immediate annuity. However, now assets moved into an annuity to spend down net worth will be penalized if the annuity cannot be liquidated. Also, the monthly income from the annuity will be considered income.

Therefore, purchasing an immediate annuity is no longer an attractive option.

IRREVOCABLE TRUSTS

Irrevocable trusts have been used to reduce net worth as well, but now those transfers will be penalized if made within 36 months of filing a claim.

While the new rules make irrevocable trusts less immediately effective, they will still be an effective planning tool. A claimant can create a trust, transfer assets to it, and then wait 36 months to file a claim. As long as their assets are below the limit at the time of the claim, they should be approved.

SPENDING DOWN NET WORTH

If a claimant has more than $123,600, but does not have enough excess assets to justify creating an irrevocable trust, they should focus on spending their assets down.

Unfortunately, “in the absence of clear and convincing evidence showing otherwise, an asset transfer made during the look-back period was for the purpose of decreasing net worth to establish pension entitlement.” This means that any transfer not made for fair market value will be penalized, if the amount is over the CSRA limit.

The good news is that purchases for fair market value for the veteran or surviving spouse are allowed. This means that purchases of home repairs, vehicles, medical equipment, clothing, electronics, vacations, etc. are all permissible as long as they are used for the claimant (you can’t buy a cruise ticket for your son).

SUMMARY

  • Net worth limit is $123,600 (2018).Claimants that transferred assets within the last three years (36 months) will now be subject to a period of ineligibility (“penalty period”)
  • Immediate annuities will be penalized if purchased within the three-year lookback period
  • Transfers to irrevocable trusts will be penalized if within the three-year lookback period
  • Allowable ways to spend down assets are to spend them on items or services that are purchased at fair market value for the veteran or surviving spouse

This is a very significant change in the VA rules that will affect many veterans and surviving spouses that are in need of in-home, assisted living, or nursing home care.
Now more than ever, it is important to consider long-term care insurance and work with an elder law attorney to design an appropriate plan before the need for long-term care arises.

If you need assistance, please contact Golowin Legal to schedule a one-hour meeting to discuss your goals.

These rules were published in the Federal Register as “Net Worth, Asset Transfers, and Income Exclusions for Needs-Based Benefits” on on September 18, 2018.

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Add QIT Authority to Power of Attorney

Since August 1, 2016, all Ohio Financial Powers of Attorney (FPOA) should specifically allow the attorney-in-fact to create a Qualified Income Trust (QIT), also known as a Miller Trust, to allow the person creating the FPOA to qualify for Ohio Medicaid.

Very few FPOAs include this provision because there was no need for it until 2016. Now, however, any Medicaid applicant with monthly income above 300% of SSI ($2,205 in 2018), will not be eligible for Medicaid without a QIT.

If the Medicaid applicant is not competent and cannot create their own QIT, then someone else must do it for them. The problem is, that person must have legal authority to do so by either being the attorney-in-fact under the incapacitated person’s FPOA or by being named guardian by the probate court.

Medicaid recipients in nursing homes, assisted living and those receiving Home and Community Based Services (HCBS), such as PASSPORT, are all affected.

Make sure you update your FPOA to include this provision! Call Golowin Legal today to set an appointment.

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Medicaid Qualified Income Trusts (QIT)

In 2018, if a Medicaid applicant has monthly income of above $2,205, they must set up a Qualified Income Trust (QIT) and meet all other eligibility criteria to receive Medicaid benefits. This catches many applicants off guard because they may have zero savings but be ineligible for Medicaid solely because their Social Security and/or Pension monthly total is over $2,205.

A QIT (sometimes called a “Miller Trust”) is a legal arrangement that allows the Medicaid applicant to put some of their income into the QIT, which is then generally used to pay for the applicant’s medical expenses. When a QIT is properly set up and managed, the income placed into it is not counted when Medicaid eligibility is determined!

A QIT must be:

  • Irrevocable
  • Funded by income only
  • Cannot contain other assets
  • Name the State as beneficiary upon death

Once the QIT is set up, a QIT bank account will need to be established. Then, each month the Medicaid applicant will transfer some of their monthly income to the QIT and the Trustee will use the money placed into the QIT to pay for medical expenses (or other permissible expenses) in the same month the money is placed into the QIT.

QITs are not very complex to establish, but can be confusing to implement correctly. If you need assistance establishing and implementing a Qualified Income Trust for yourself or a loved one, contact Golowin Legal today at (614) 453-5208.

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2018 VA Aid and Attendance Pension Rates

What are the 2018 VA Aid and Attendance Pension rates?

For 2018, the Maximum Allowable Pension Rates (MAPR) for the VA Basic Pension, Housebound, and Aid and Attendance ratings have increased from 2017.

As indicated below, the maximum monthly pension payable to a married veteran in need of Aid and Attendance is $2,169 per month. The maximum monthly payment to a surviving spouse is $1,176.

See the table below:

Maximum Allowable Pension Rate (MAPR) Approx. Monthly Benefit
Veteran

(Basic Pension with no dependent)

$13,166 $1,097
Veteran

(Basic Pension with one dependent)

$17,241 $1,436
Veteran

(Housebound with no dependent)

$16,089 $1,340
Veteran

(Housebound with one dependent)

$20,166 $1,680
Veteran

(Aid and Attendance with no dependent)

$21,962 $1,830
Veteran

(Aid and Attendance with one dependent)

$26,036 $2,169
Each additional child $2,250 $187
Surviving Spouse

(Basic Pension with no dependent)

$8,830 $735
Surviving Spouse

(Housebound with no dependent)

$10,792 $899
Surviving Spouse

(Aid and Attendance with no dependent)

$14,113 $1,176
Surviving child $2,250 $187
Veteran Married to Veteran

(Both Aid and Attendance)

$34,837 $2,903

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Beware of This Deed Scam!

Have you received an official looking letter that says you need to spend money to order a copy of your deed?  Don’t get suckered by this common scam!

Get the details on this deed scam on my Elder Law Blog.

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