Treatment of Joint Accounts By The VA In Adjudicating Applications For Home-Bound Or Aid and Attendance Pension Benefits

(The following discussion, taken from a listserv, or electronic bulletin board, is between accredited professionals involved in assisting veterans in prosecuting claims for Home-Bound and Aid and Attendance Pension Benefits from the Department of Veterans Affairs (VA))

Question: My understanding has been that, when one or more persons are listed as joint-owners on a veteran’s bank account and are not residing with the veteran, the VA is to attribute only a pro rata portion of the account to the veteran. Please correct me if I am wrong. If I am right, could you please send me the regulation that covers this.

Answer: Your understanding is correct. Moreover, the joint-owners of the bank account can live together and the pro rata rule still applies, provided that the account was set up prior to the date of application.  In addition, the other owner must keep detailed records and not be using he or her pro rata portion of the account to pay for any of the unreimbursed medical expenses (UME) declared on the veteran’s pension claim; otherwise, it is not the veteran’s UME and cannot be used to offset the veteran’s income.  This regulation is set forth in the M21-1MR as follows:

M21-1MR, Part V, Subpart iii, Chapter 1, Section I

65. Asset Transfers and Life Estates: Effect on Net Worth
and Income, Continued

c. Transferring a Partial Interest in Property

If a claimant transfers a partial interest in property to a person who is outside the claimant’s household, the claimant’s net worth and income are reduced in proportion to the percentage of the asset transferred.

d. Example 1: Transferring a Partial Interest in Property to Person Outside Household
Situation: A veteran has a $10,000 certificate of deposit (CD). The veteran adds a nephew who does not live in the veteran’s household as joint owner.

Result: The legal effect of this transaction is to give each joint owner an undivided one-half interest in the CD. The value of the CD is reduced to $5,000 for net worth purposes.

e. Example 3: Partial Interest in Property: No Transfer Involved
Situation: A veteran and an adult (non-helpless) child who lives in the same household are joint owners of a $10,000 CD and were joint owners before the date that the veteran became entitled to pension.

Result: Each owner has an undivided one-half interest in the CD. The value of the CD is $5,000 for net worth purposes and only one-half of the interest earned is counted as income in determining the veteran’s income for VA purposes (IVAP).

Question: That’s what I thought.  Unfortunately, I have a decision from the VA saying that 100% of the balance in a bank account is attributable to the veteran, notwithstanding the fact that a bank account is jointly-owned by the veteran and another person. As a result, the veteran is not qualified for pension benefits.  What would you advise as the best action at this point?  Thanks in advance

Answer: If I was confronting the denial, I would send the VA a statement in support of claim, quoting the M21-1MR, with a copy of the financial statement highlighting the joint names as co-owners along with a letter from the bank stating that the other person is a true owner with full ownership rights and when the account was set up as joint ownership.  I would also include in the statement in support of claim that the other person is not using any of his portion to pay for any of the declarable UME of the claimant. If that did not work and it resulted in a denial, then I would file a Notice of Disagreement (NOD) and start the appeal process.