Life Care Planning: What is the VA Improved Pension Program? Who Qualifies for it?

Attorney Sandra W. Reed

What is the VA Improved Pension Program?

The VA (Veteran’s Administration) Improved Pension Program was mandated by Congress to assist veterans and the spouses of veterans who have a disability which is not connected to service in the military.  Veterans and their surviving spouses who are eligible for a pension may also be able to obtain an additional monetary amount if they require the aid and attendance of another person or they are housebound.  This so-called “Aid and Attendance” benefit is designed to offset part of the cost of in-home care givers, assisted living care and skilled nursing care.

In contrast to Medicaid benefits, the VA benefits are payable to the claimants, not to the care-giving facilities,.  However, they are not taxable to either the veteran or the surviving spouse.  The amount of benefit increases annually with Social Security.

Who Qualifies for the VA Improved Pension Program?

The applicant must meet four requirements to qualify for the Improved Pension VA benefits.

The Service Wartime Requirement

A veteran must: (1) have completed active service in the military for a minimum period of 90 consecutive days, with at least one day during a wartime period; (2) have been discharged under other than dishonorable conditions; and (3) be over 65 years or age or have a total disability if prior to age 65.  For a surviving spouse to receive benefits, the marriage to the qualifying veteran must have ended in the death of the veteran rather than in divorce.  Service during the war period does not require the veteran to have served in a war zone. 

The wartime period for World War I begins in April 6, 1917 and ends on November 11, 1918.  The period for World War II is December 7, 1941 through December 31, 1946.  The Korean War spans June 27, 1950 to January 31, 1955.  The Vietnam War period covers veterans who served in the Republic of Viet Nam February 28, 1961 through August 4, 1964 or those who were on active duty from August 5, 1964 through May 7, 1975 anywhere.  The Persian Gulf Wars began on August 2, 1990 and continue to the present.

The Medical Necessity Requirement

The veteran or his surviving spouse must have a doctor’s directive stating he or she is mentally incompetent, legally blind or is in need for assistance with at least one of the following: (1) transfers from one place to another; (2) bathing or dressing; (3) toilet use or personal hygiene; (4) eating or escort to meals; (5) medication administration.

The Income Limit Requirement

To receive the maximum benefit, the veteran or surviving spouse must be able to show that the total of his or her unreimbursed medical expenses (UME) are equal to or greater than his or her gross income. Unreimbursed medical expenses are those that must be paid out-of-pocket.  They are those expenses not covered by Medicare, a Medicare Supplement Insurance Policy.  The cost of health insurance premiums is counted as a UME.  Any out-of-pocket expense of assisted living, long-term care costs and/or home health care costs is counted as UME.   

The Asset Limit Requirement

In applying for benefits, the veteran or surviving spouse must list all funds in bank accounts, the value of stocks, bonds, mutual funds, annuities and any other property other than the residence and a reasonable lot area.  There is no set total which disqualifies an applicant.  The VA website www.benefits.va.gov states that the VA will review the total and “will determine whether assets are of a sufficiently large amount that you can live off of them for a reasonable period of time.” This determination is based upon age, care expenses and life expectancy.

As the law stands today, those with assets substantial enough to prevent their meeting the asset limit, can give away assets in order to meet the limit without incurring a penalty.  This is in contrast to Medicaid rules, which penalize the applicant for having given away property during the 5 years before applying for benefits.  This means that veterans can more easily plan to meet the asset requirement before applying to the VA for benefits.

VA Pension Benefits and the “Welfare” Misconception

It has been a common misconception that non-service- connected pension benefits represented a form of welfare for wartime veterans.  This is far from the case today because many veterans and their surviving spouses who have significant income and assets are still eligible for VA needs-based pension plus “Aid and Attendance” because of the high cost of long-term care.

The Application Process

Those applying to the VA for the Improved Pension Benefit should expect the process to take at least 4 to 6 months.  If granted, the benefit will be retroactive to a date determined by when the application was received.  It is important to seek assistance in completing the application.  Each form contains instructions which should be read carefully but additional assistance of persons expert in navigating the process is often needed.

Accrued Benefits

If the beneficiary dies with benefits that have accrued but have not been paid, the surviving spouse can obtain the accrued benefits by completing an application for these through Form 21-601.  Children of the veteran who qualify as under 18 years of age, or at least 18 but under 23 years of age and are pursuing an approved course of education or who became incapable of self- support prior to reaching age 18, may receive the accrued benefits.  Parents of the veteran qualify to receive the accrued benefits if, at the time of the veteran’s death, the parents were dependent upon the veteran for support.

If there is not a surviving spouse and no qualified children or parents, accrued benefits may be payable as reimbursement for the last illness and burial expenses.  If the expenses were paid from funds of the deceased beneficiary’s estate, the claim should be filed by the executor or administrator.  If the expenses have not been paid, the claim may be filed by the person responsible for the payment of those expenses.

Sandra W. Reed is an attorney with Katten & Benson, an Elder Law firm in Fort Worth, Texas.  She lives in beautiful Somervell County, near Chalk Mountain. If you have questions about this column or wish to suggest a topic of interest, Ms Reed may be contacted by phone at 254.797.0211 or by email at swreed2@yahoo.com.

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