VA Pension Planning Under the New Regulations: Two Years in the Rearview Mirror

On December 1, 2020, Donald D. Vanarelli, Esq. ( presented at the 22nd Annual Elder and Disability Law Symposium held via ZOOM Webinar by the New Jersey State Bar Association Elder and Disability Law Section and the New Jersey Institute for Continuing Legal Education.

Mr. Vanarelli spoke on planning to attain eligibility for pension benefits from the Department of Veterans Affairs (VA). Unlike VA compensation benefits, VA pension benefits are not limited to veterans who were injured while serving in the armed forces. Rather, veterans who served for as little as 90 days and are over age 65 or disabled are potentially eligible for a VA pension.

The VA pension benefit is one component of a disability benefits program available to compensate veterans for non-service-connected disabilities. Like the VA compensation program, the pension program is based upon disability. However, unlike the VA compensation program, the pension program is also based on income and financial need, and the veteran’s disability must be total and permanent (but need not be “service-connected”).

According to the Department of Veterans Affairs website, pension is a monthly benefit paid to financially needy wartime veterans. To be eligible for a pension, the veteran must meet the following requirements:

  • Age 65 or older, OR
  • Totally and permanently disabled, OR
  • A patient in a nursing home for long-term care because of a disability, OR
  • Receiving Social Security Disability Insurance, OR
  • Receiving Supplemental Security Income, AND
  • Low income and limited financial resources, AND
  • No recent asset transfers.

Until 2018, there was no transfer penalty associated with gifts to third parties. Therefore, VA planning to accelerate pension eligibility was a relatively simple matter. If a VA claimant made a transfer to a person outside the claimant’s household, and relinquished all rights of ownership and control, the claimant’s net worth would be reduced by the amount of that transfer.

On September 18, 2018, the Department of Veterans Affairs (“DVA”) revised the federal regulations that govern eligibility for VA pensions. Among other things, those regulations established new requirements for the evaluation of net worth and asset transfers.

Key changes, planning techniques and takeaways are outlined in the paper below, which Mr. Vanarelli presented at the Symposium.

The paper I presented at the 22nd Annual Elder & Disability Symposium is annexed here – [gview file=””]

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