How Does The VA Treat Continuing Care Retirement Communities In Evaluating Claims For Pension Benefits?

Following is an exchange posted on a electronic bulletin board devoted to the discussion of issues involving pension and compensation claims submitted to the Veterans Administration (VA):

Q – How does the VA treat a resident of a continual care retirement community (CCRC) with regard to assets, income, and medical expenses when evaluating a claim for pension benefits filed by the resident?

CCRCs charge a substantial initial up-front payment from an applicant for residency.   Many CCRCs never charge anything else, drawing from this initial payment IF the resident later needs nursing or medical services. Some CCRCs take this initial payment, but charge extra for care if needed later. In the second scenario, the extra fees charged would definitely be considered an “unreimbursed medical expense” by the VA in evaluating an application for VA pension . However, I am uncertain how the VA would treat the first scenario, since the initial payment, once made by the resident, is then owned by the CCRC and no longer owned by the resident.

In nearly every case, the initial payment belongs to the CCRC and is refundable to the resident ONLY if the resident leaves….and even then, the CCRC usually refunds only a portion of the initial payment. I think that the VA would look at this arrangement as being much like a promissory note (since it can be refunded). If this is the case, the initial payment to the CCRC would most likely be considered an asset, since promissory notes are considered an asset.

A – I think the answer would depend on the wording of exactly WHAT the initial payment is for. If it is for “care” and the CCRC is willing to give you a letter confirming that fact, I believe that the VA should count the initial payment as a medical expense. On the other hand, if the initial payment is an “entry fee” or “rent” or “registration”, then it would not be considered to be a medical expense.

On the second question, I would say yes, the initial payment would be considered to be a cash asset if the resident has the ability to get it back from the CCRC. I believe that the VA would only count the portion that could be returned to the resident as an asset.