The VA has enacted a set of rules that will make obtaining VA pension eligibility somewhat harder for families, but at least much clearer. Effective October 18th, 2018, qualifying Veterans and spouses applying for pension benefits will need to be aware of the following financial eligibility guidelines:
1. Three (3) year look-back rule (similar to Medicaid's 5-year look-back rule) on all asset transfers.
2. Resource eligibility cut-off of $123,600.00, adjusted annually.
3. Homestead is excluded from countable assets, but any acreage in excess of 2 acres is countable.
4. Any asset transfer within three (3) year will cause an ineligibility period for VA pension benefits, determined by dividing the value of assets transferred by the applicable VA pension rate.
5. Exceptions to the transfer penalty include transfers to trusts for children deemed unable to support themselves and for transfers when the applicant's assets were already below the applicable threshold.
6. Annuities are required to be liquidated, if possible, or will be treated as income. Annuities unable to be liquidated will be penalized as a transfer if they were purchased within the three (3) year look-back period.
As always, the details are a bit more complex, but the main takeaway here is that solutions used previously to qualify for VA pension benefits may no longer work. As always, consult a knowledgeable elder law attorney before engaging in any gift-based planning to qualify for public benefits.