Long term care planning for veterans
By Mary Markovich
Affordable VA Accreditation Training
Finding ways to pay for long term care expenses is a critical part of estate planning. Many people over 65 years of age have not purchased long term care insurance. For veterans and the surviving spouses of veterans living in an assisted living facility or nursing home, or those who need in-home care, financial help may be available. The Veterans Administration has an underused pension benefit commonly called Aid and Attendance.
The Aid and Attendance program provides tax-free money to veterans who need assistance performing activities of daily living. Even veterans whose household income is above the legal limit for a VA pension may qualify for the Aid and Attendance benefit if they have a sufficient amount unreimbursed medical expenses based on their household income.
The veteran’s pension benefit may be available to veterans age 65 and older or those 100 percent disabled. Certain criteria must be met, such as serving at least 90 days in active service, with at least one of those days occurring when the U.S. was at war or in an official conflict. The veteran does not have to have service-related disabilities to qualify. Surviving spouses or dependents may also be eligible.
The VA permits accredited agents and accredited attorneys to counsel and gather information for veterans who may be claimants for VA pension benefits. All pension claimants must meet an asset test and an income test.
Asset test: The veteran, age 65, must have less than $80,000 in countable household assets. As with the Medicaid rules, the primary residence, vehicle, burial plans and term insurance are excluded.
Income test: The veteran's household income is reduced by the unreimbursed medical expenses. The household income, less the unreimbursed medical expenses, must be less than the maximum annual pension rate (MAPR).
The MAPR is $23,396 annually for a veteran with a dependent, $19,736 for a single veteran, and generally, $12,672 for a single surviving spouse, with some exceptions.
As a simplified example, for illustration only: John, a veteran age 81, and Mary, his spouse age 80, have the following:
- John and Mary have a combined Social Security income of $19,200 annually
- John has pension income of $12,000 annually
- Mary has an income stream from an annuity of $9,600 annually
Total household income = $40,800
- John pays $28,800 a year for home health care
- John and Mary pay $2,304 a year for Medicare
- John and Mary pay $1,200 for incontinence supplies
- And, John and Mary pay $ 2,880 a year for supplemental insurance.
Total household unreimbursed medical expenses = $35,184.00
Total annual household income ($40,800) less total household unreimbursed medical expense($35,184)
Subtotal $ 5,616
MAPR ($23,396) less subtotal ($5,616)
Approximate veteran pension $17,780