Aid and Attendance is a benefit that is available through the Department of Veterans Affairs (VA) to a qualifying veteran whose net worth is not “excessive” and who:
- is bedridden, or
- requires the aid of another person to perform activities of daily living, or
- is a nursing home resident, as a result of mental or physical incapacity, or
- is blind or nearly blind in both eyes.
https://benefits.va.gov/benefits/.
Once VA Aid and Attendance eligibility is established, the monthly benefit amount is calculated as the difference between the veteran’s countable family income and the annual pension limit (the “MAPR”), payable in monthly installments.
In general, the VA is much more liberal than Medicaid in the treatment of transfers of assets. Medicaid law mandates periods of ineligibility, or “penalty periods,” in cases in which a Medicaid applicant divests himself of assets for less than fair market value in an attempt to render himself “needy,” and therefore eligible for Medicaid. Under VA benefits law, however, if it is “clear that the grantor has relinquished all rights of ownership, including the right of control of the property,” a gift “to someone other than a relative residing in the grantor’s household” will reduce the corpus of the grantor’s estate, for VA purposes. 38 C.F.R. §3.276. Consequently, any gift of an applicant’s funds will reduce the applicant’s net worth for VA purposes, and will not result in a period of ineligibility for VA benefits. Stated simply, an applicant will qualify for VA Aid and Attendance benefits as a result of the gift.
Thus, following the gift of a portion of his or her assets, an applicant will qualify for Aid and Attendance benefits, which will also be used to pay for all or a portion of the applicant’s long-term care expenses during the Medicaid ineligibility period resulting from the gift. Once the Medicaid penalty period expires and the applicant is eligible for Medicaid, his VA Aid and Attendance benefit will be reduced to $90.00 per month. 38 C.F.R. 3.551(i).
Further, since the proposed gifts are often designed to replicate the applicant’s testamentary plan, the interest that is preserved through the proposed transfers ultimately will be distributed as it would otherwise through the applicant’s testamentary plan.
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