Understanding Aid and Attendance: Navigating Veterans' Benefits with Attorney Bob Mannor

Want to understand the intricacies of the Aid and Attendance benefit program? Our host Attorney Bob Mannor,  walks us through the ins and outs of this potentially life-altering benefit for elder veterans. Nested under VA's improved pension program, this benefit could be the answer to your worries about independent living, assisted living and nursing home expenses, or even in-home care. Bob, an accredited expert by the Veterans Administration and a nationally board certified elder law attorney, also elaborates on the special criteria that could unlock these benefits.

Now, here's a teaser - did you know that changes in asset rules and gifting can significantly impact your Aid and Attendance benefit? Bob explains these changes, giving you an in-depth understanding of grandfathering assets gifted before October 18th, 2018, the exemption rules for a house and two acres, and the new modifications to the income annuity rule. He also offers valuable insights on the types of assets allowed, how to stay qualified, and the potential consequences of transferring assets. Don't miss out on this opportunity to arm yourself with knowledge on maximizing veterans' benefits.

Host: Attorney Bob Mannor
Producer: Savannah Meksto

Transcript

Savannah Meksto: 0:01

You're listening to Advice from your Advocates, a show where we provide elder law advice to professionals who work with the elderly and their families. Today's webinar will discuss a potentially life-changing but not well-known Veterans benefit called Aid and Attendance. Before I pass the mic to Bob, I'd like to first cover a few details. Now, why should you listen to what the folks at Mannor Law Group have to say? We are a nationally recognized and respected elder law and estate planning firm. All three of our attorneys are accredited by the Veterans Administration to assist veterans with claims and appeals.

Savannah Meksto: 0:43

Attorney Bob Mannor is nationally board certified as an elder law attorney by the National Elder Law Foundation. He's one of only 19 attorneys in Michigan to achieve this designation. Bob is also a leader among elder law attorneys in Michigan. He was chair of the State Bar of Michigan Elder Law and Disability Rights Section and past president of the National Academy of Elder Law Attorneys Michigan Chapter, and Mannor Law Group has been honored by readers of our local paper as the best or favorite law firm for the last eight years in a row. Now, without further ado, I'd like to welcome Attorney Bob Manor.

Bob Mannor: 1:23

Hi folks. So this is a really good benefit for folks that qualify, and it's a benefit that is for veterans. But a lot of veterans don't realize that they might be eligible for it, because it's not just for veterans that were injured during service or anything like that. It's also not just for veterans, it's also for potentially spouses or widows or widowers of veterans, in other words, the surviving spouse of a veteran. So we're going to go through the terms here and talk about it, but before we do that, let's kind of clarify this from the standpoint of the veterans' benefits as a whole, because there are probably three different areas that the VA can provide some long-term care benefits, because we're looking at this in the standpoint of a long-term care context, and so the one that we're going to be talking about today is the aid and attendance. But let me just quickly go through the other two.

Bob Mannor: 2:21

So the other two are certainly any veteran that has a service-connected issue, and this is particularly true for Vietnam veterans or some of the that served in Korea that actually served in Vietnam or in Korea and during the time periods that the Agent Orange was used, and so there are so many diseases that we're seeing in the elderly population that are tied to this Agent Orange and they can get some really substantial benefits as part of that. I have a whole other presentation on that If you want to go back and look at that on our website. We're not going to be talking about that today, but anybody that has a service-connected and we got to look towards that because it's not always obvious. So Parkinson's or Parkinsonism now is even considered a service-connected disability for anybody that served in an area that was exposed to Agent Orange, even diabetes and things like that. The other one, which is often overlooked, is if you're eligible for discounted or free medical services, and not every veteran is. A lot of veterans assume that they can get free or discounted medical services through the VA medical, and it's not everybody is. But if you are eligible for free veterans medical with health services, the VA has more flexibility in offering some home care help, whereas under Medicare and your insurance generally that's just going to be short-term skilled care. With the VA they can actually authorize a home care person that is paid through the VA. So really great opportunities to think about.

Bob Mannor: 4:10

Not the topic for today. Today we're going to be talking specifically about this aid and attendance benefit. So I always like to talk about well, what does it pay for? Well, it doesn't really pay for anything, and that's what I mean by that is it's actually a reimbursement program. They actually call it a pension of all things.

Bob Mannor: 4:27

Most people call it aid and attendance, but the VA calls it a pension, or sometimes they call it improved pension. And why is it a pension? Well, it was designed after the Civil War and they were worried because there was a lot of veterans that didn't have any income. And so they said, well, our veterans of a wartime period are going to get a minimal income if they don't have any other source of income, and that's the key. And so then it kind of fell out of favor because once health security came in, most elderly folks would have some form of income because they had social security and that was going to kind of offset this veterans improved pension. And then in the 90s they actually changed it to say, well, for veterans of a wartime period, we're going to look at their income as income minus medical expenses, and that's how this all came about and why it's considered a pension program. Is it's actually a reimbursement? It's an income because you're spending all your money on long-term care services. You're spending all your money on medical services, home health aid, assisted living, nursing home, whatever it is you're spending all your income. So your income for VA purposes is zero. So it can help pay for independent living.

Bob Mannor: 5:34

There's a couple of special rules with regard to that I'll come back to. You can certainly pay for assisted living, nursing home, in-home care and if you do it right, you can even pay a family member. There's two things that are you need more information about regarding you know who, you who, what the money can be used. To consider a medical expense, first of its independent living, you have to have the doctor's statement specifically identify the independent living as a Protected environment. So we really want the doctor's statement to specifically say hey, they're in this independent living, they need to be there because it's a protective environment. The second thing is you have to be paying for two ADL. So, especially if you're an independent living, you have to be paying in addition to just your rent. Can't just be rent. If you're just paying rent, you're not gonna. It's not gonna be counted as a medical expense. But if you're paying rent and you're paying for assistance with two activities of daily living dressing, bathing, toileting, eating, getting around, you know those types of things, then you know showering, then you can the the rent will count as a medical expense. Also, with regard to paying a family member or any kind of in-home care, I highly, highly, highly recommend that you have a lawyer like us draft what's called a care contract, specifically and most importantly, if it's a family member, because, well, the VA does not require that Medicaid currently does. Now I'm hoping that Medicaid rule changes someday, but currently Medicaid requires that if you're gonna pay a caregiver at home, we need to have notarized contract. There's a bunch of rules we have to follow, so just be aware of those couple of things.

Bob Mannor: 7:20

Okay, so basic rules about this program. One of the basic rules is you have to have 90 days of active duty. What's interesting about that is only one day has to have been during a more time period. So this is for wartime vets and I'm gonna get to those dates in just a second here. But there has to have been 90 days of active duty and that's important because a lot of times I've actually seen a few cases where somebody just had exactly 90 days of active duty and then they got a medical discharge or something like that, or they had a family you know Discharge or whatever. It is general discharge, but if you got to that 90-day mark then you're qualified. It can even be where it was 45 days here, and then another situation is 45 days here.

Bob Mannor: 8:09

An example of that might be if you were in the Army reserves or if you were in the National Guard and the National Guard get called up for federal active duty. So if it is active, if it is National Guard or if it is reserves, you have to have been activated for 90 days and it has to be federal activation. So if it was, you know, back in the 70s and 60s, national Guard usually didn't get activated by the federal government. In fact people used to say, well, they went into National Guard to avoid having to get drafted. That's them, you know. Sometimes that was maybe true, sometimes it wasn't. But the idea is that National Guard doesn't count unless it's federally activated. Nowadays, if you're in the National Guard, it's pretty good chance you're gonna get activated by the federal government and you're gonna get active duty for federal, federal duty. I've also had Situations actually this has come up a lot when somebody served more than 90 days of active duty and they don't think that they served during a wartime period at all.

Bob Mannor: 9:09

They served maybe between Korea and Vietnam or you know. Just the dates of service don't comply, you know, don't line up with the dates of service of what they consider active duty or wartime. I'm sorry, and one of the things we look at is well, if you did, were you in the reserves where you're in the National Guard afterwards and where you ever called up? So there is a A lot of folks around here that were in the reserves or National Guard in 1968 or 1969 and they were not active duty at the time but then they were called up because of riots. So there were riots in 68-69 and the federal of the you know National Guard reserves were a lot of them were called up for 10 days and that counts because you only have to have one day during a wartime period. 68-69 was wearing the Vietnam era and so if, because they were activated for 10 days, even though they otherwise didn't serve during wartime period, it counts because they served for 10 days in 1968 or whatever, have to have a discharge other than dishonorable. So any discharge other than dishonorable it's dishonorable.

Bob Mannor: 10:20

We'd have to get that changed before we could apply for this benefit, and sometimes there's ways to change that and there's attorneys that can help with that. A medical discharge, a general discharge, anything like that. This is generally for folks over age 65 and so in theory you could get it if you're not 65, but then you'd probably qualify under the disability rules. So if you're over age 65, you don't have to prove disability or anything like that. All right, so here's the dates that we were talking about. We don't really see I'm not sure that there's any World War I veterans left. Maybe there are some widows, possibly over World War I that could still qualify, or widowers, in theory, world War II. We have the dates listed there and you'll notice those are not the dates that line up with the history, but they always have some cleanup afterwards, like some time, that they count as part of the wartime period, even after the war was officially over.

Bob Mannor: 11:19

The Korean conflict we see from June of 1950 through January 1955. And then Vietnam has a special rule that if you served during this time period you qualify. If you served between August of 64 and May of 75. However, there's some additional dates for those people that actually served in Vietnam. So we had our advisors, advisors that carried guns and shotguns, presumably starting in February of 1961. Technically, we weren't part of the Vietnam conflict at that time because they, for whatever reason. So if you served in Vietnam, or if you're a client or the person you're looking at, your patient, your resident were to have served in Vietnam between February 61 and August of 64, they would also qualify, even if they didn't serve after August 5th of 64. Everybody else that did not serve in Vietnam but they served in Germany or they were in Korea or they were wherever else, then they have to have served at least a single day between August 5th 1964 and May 7th 1975. This does not relate to that other thing where at service, connected disability, age and orange exposure, anything like that. This is specifically for this aid and attendance benefit.

Bob Mannor: 12:41

Okay, so what is the VA eligibility measure? Well, we have to have a medical need as determined by your doctor, not by the VA's doctor. So, unlike some of the other programs through the VA where you have to go to a VA doctor, this does not require you to go to a VA doctor. You can use your personal doctor. Your doctor certifies that you have a medical need, that you name the regular aid and attendance of another person.

Bob Mannor: 13:06

We are gonna you have to look at income. Now. Income's usually easy to deal with. A lot of times I'll have veterans say, oh, I can't qualify because they make too much income. Well, that's not true. You just don't spend enough Because remember, the way that the VA calculates income is income minus spending. So if you're spending $6,000 on assisted living or memory care or someplace like that a month and your income's less than $6,000 a month, you may have really good income. You may have $5,000 in income. You'd still qualify for this program. In fact, if you had $6,000 in income and you're spending $6,000, you'd still qualify for this program. In other words, we're just basically saying that in order to get the maximum benefit, your medical expenses or your long-term care expenses have to be more than what you bring in from your pension and social security.

Bob Mannor: 13:50

And then assets. We're gonna talk about assets here. Before we talk about assets, let's talk about the numbers. So these are the numbers. If you're a veteran and you have a dependent, usually a spouse, you can qualify for tax-free, $2,295 every month. And if you're a single veteran, you can qualify for $1,936 every month, tax-free, surviving spouse $1,244. And then we have this unusual category Well, the veteran's healthy, the veteran's still alive. So my spouse number is the veteran has passed away, veteran's still alive and healthy, doesn't need care, but their spouse needs care. So let's say a veteran's healthy and the spouse has dementia or something like that, well then the veteran can qualify for $1,520 as reimbursement of the money that they're spending on their spouse. If it's the veteran that needed the care, they'd get $1,936, I'm sorry, if the veteran needed the care, they get the $2,295 because the veteran and the spouse. But if it's the spouse that needs the care and the veteran's healthy, it's $1,520. These are all tax-free.

Bob Mannor: 15:00

I just heard, I just read an article earlier today that it's expected that these are gonna go up by about 6%. So people always love it when they seems like they're getting a raise in their social security or their veteran's benefits and that's great. It also generally means that inflation, that the value of your dollar, is going down, and that's why you're getting a raise is because the inflation, and so what's gonna? They're trying to keep up with cost of living, and so I have heard. Obviously, this isn't official, we won't know until about November 1st, but the article I read said it's very likely that it's gonna be in the 6% range of the increase that will occur for next year. All right, so then I promised you we'd talk about assets here, right? So here's what you can keep.

Bob Mannor: 15:52

These rules changed dramatically as of October 18th of 2018. So almost three years ago and that three years is important, we'll talk about that. So almost three years ago, they drastically changed these rules. Before this, they were not very clear on how much money you could still have and qualify for this. In fact, they basically said well, we're going to look at all these factors. There's your age and what your actual health is and what your diagnosis is and what your life expect, all of this stuff.

Bob Mannor: 16:25

And I used to say, well, in theory, what they would tell you is they're going to put all that in a can, stir it up and then pull out a number and I know that sounds kind of funny, but I mean that's the way they described it. The VA described it. So we kind of knew, generally, if you're married, that somewhere between $60,000 and $80,000. If you were single somewhere between $30,000 and $40,000. So those were the rules of thumb, but the VA would never say those numbers. They would just say well, if you have too much, you can apply and we'll deny you. So this is better in that regard, and that not only did they increase the number substantially, they defined it. So, just like the other stuff, this will be adjusted for inflation.

Bob Mannor: 17:16

You can have a house with up to two acres. Well, what if you have a house with three acres? Well, the house and two acres are going to be exempt, and then the other acre is going to have to be counted into the other assets. So you can have a house and two acres. That's exempt. You can have cars. You can have multiple cars. Unlike Medicaid, they don't say how many cars. In fact, they even say family cars. So in theory the thought is at least the way the VA wrote this rule you could have cars for your kids. I'm not saying that's a good idea or that I would recommend that, but it seems to be what is implied by the wording of the rule with regard to this. So you can have cars, multiple cars, you can have a house in two acres and you can have $130,733 in other assets, and that would include bank accounts or investments, other things.

Bob Mannor: 18:14

Big change is they do not allow gifting. So prior to October 18, they didn't have a look back like Medicaid does. So they didn't have a gifting rule. You could gift and then apply for benefits. So now what they said was that they were going to grandfather anybody in that had made a gift prior to October 18, 2018. So they say the look back is three years, but technically the look backs only three years, up until October of 18, 2021. And then we'll say it's three years. In other words, we still have it's actually two years and 11 months, and how many ever days it is that you're watching this video but as of October 18, 2021, it'll be a three year look back because anything happened before that was grandfathered in. So when I say no transfers, no gifting.

Bob Mannor: 19:06

If you put your kids in the house, they're going to penalize you. If you took money out and gave it to your granddaughter, they're going to penalize you. There is not an exemption In theory, and under Medicaid, there's an exemption if you didn't do it for Medicaid purposes. In other words, you never expected to go to a nursing home. They happened to give a nice gift to your granddaughter was getting married and gave a few thousand dollars. The Medicaid has a rule that says well, if you can prove that it wasn't for Medicaid purposes, then VA does not have that rule. They basically it's a strict liability. You gave it away, you added your kids names to the deed, to the house. You got a problem. You're going to have a penalty. Now the house deed. Hopefully the kid would give the house back and we can fix that and still have it exempt. So this is a big deal.

Bob Mannor: 19:57

With regard to the house, though, we do have some planning opportunities because, if you think about it a lot of times, somebody needs to qualify for this benefit. They have the house. They might be eligible, but they move into an assisted living or independent living Now they have an empty house. Would make sense maybe to sell the house, but now if we sell the house, it's gonna put them over assets. If you have something like that, send them our way, send them to us, and we can help them with that and help them stay qualified and not be disqualified from the proceeds from the sale of the house.

Bob Mannor: 20:30

So the other big one is no income annuities after October 18th 2018. An income. Annuity is where you take money $100,000, whatever it is and you put it into this investment that pays you back a monthly income stream, okay. And they said, if you do that, we're going to penalize you. You took $100,000 and you put it into a monthly income stream that's gonna pay you $1,000 a month. They're gonna treat that as if it was a $100,000 gift. Doesn't really make a whole lot of sense. They have their rationale behind it.

Bob Mannor: 21:03

There was a bunch of people selling these annuities that were selling annuities to veterans that didn't need annuities and it was probably a poor product, a poor financial product for veterans, and they were kind of trying to combat that. There was a bunch of people out there selling annuities to veterans tell them they need to get this annuity in order to get veterans benefits, which was not true, but there was a whole bunch of people doing it, and so the VA. One of the reasons why they changed the rule was because they wanted to stop these people from selling inappropriate investments to veterans and then telling them that's what they needed to do to get these veterans benefits. Why annuities? I can't say for sure, but I have a suspicion and that's because they get a big commission on annuities. The salesperson got a big commission on annuities and they get their entire commission up front. Most financial products they get an ongoing commission and so they have a reason to continue to be your financial advisor. With annuities like this, the salesperson would often get a big commission up front and then have nothing after that, so they have no incentive to actually help you out in the future. They sold the thing, they got their money, they abandoned you basically, or at least that was the problem or the concern that was had.

Bob Mannor: 22:21

Okay, so that's the two big things. First of all, they've increased the dollar amount. They've clarified you know you can't have 100 acres. Before it wasn't 100% clear as to how much acreage you could have, so now they said a house of two acres. What's weird about that, of course, is you could have a $2 million house on two acres and it's exempt. Seems a little odd. That's the rule. That doesn't work for Medicaid purposes. That does work for VA purposes. And then so the two other things is no gifting, there's three year, look back, and not always income annuities.

Bob Mannor: 22:56

All right, a couple of myths. A lot of times I've heard these things. I'm a veteran, but I can't get this benefit, this pension because I didn't get hurt during service. Nope, that's not required. That's a different program. That's what the VA calls compensation. You'll hear people say I've got 20% from the VA or I get 100% from the VA. That's compensation. Service-connected disability-service-connected illness, agent-orange, hearing loss, PTSD, whatever it is. They tie that to your service and that's a different program altogether. I did not serve in combat not required. A lot of the folks that we get the aid and attendance benefit for never served in combat and some of them never left the United States. They served in a non-combat area. They never really had to carry a gun. It doesn't require you to serve in combat for this program. You just have to serve during a wartime period, those dates that we talked about earlier.

Bob Mannor: 23:56

Income is too high? Nope, can't be, you're just not spending enough. The VA defines income for this program as income minus medical expenses or income minus long-term care expenses. So if your home health aid costs more than your social security check, if your assisted living or home health aid plus independent living costs more than your social security and pension check, then your income for VA purposes is zero. So I do hear people say all the time oh, I have too high of income. Sometimes people mix up those words income and assets, and for this program, for Medicaid, there's a clear distinction between income meaning what you have coming in every month, your pension and social security and assets, which is a whole different set of rules, and I have too many assets. We just went through those asset issues there, all right.

Bob Mannor: 24:46

So last thing to think about is can you protect assets? Is there anything that we can do as lawyers to protect assets? And there are a few things a lot less things than I could do back before October of 2018, but there's still a number of things. Now. If you have $1 million unless you buy a $1 million house, there's not a heck of a lot I'm going to do. I could do, except if we do the planning three years in advance. So legal planning can still be done, but I say up to three years in advance, because if you only have $300,000 and you're spending $5,000 a month and your income is $2,000, we're going to do the math. We're going to figure out, ok, what things can we do to not have to wait the three years to qualify for veterans benefits, and there are options. It gets a little bit more complicated, but that's why you have lawyers because it gets complicated and we figure out all the math and we figure out whether we can protect assets and if we protect assets, will we get qualified faster than the three years? And the answer is yes.

Bob Mannor: 25:46

If you're in that example that I just gave you, so if you're under $500,000 of accountable assets meaning the house doesn't count, the cars don't count, things like that it's probably worth a review. You're up to $1 million in assets. If you want to apply for this program, we can protect assets, wait three years and then apply. But if your low asset already, if you have a less than $130,000 in assets, then this is a program that you just have to look at. You have the medical need, are you spending money on care and assets aren't going to be a problem.

Bob Mannor: 26:23

So let's see if we have any questions. And if we don't have any typed in questions, then Savannah is going to tell us how you can get your questions answered in the future here. So she's going to give you a couple of different options for getting questions answered. I know I think we maybe have a few social workers on the call and we're watching this video. We always want to be able to be helpful if it's something that a social worker has a question about this. Please follow up with us. Savannah is going to give you some details about how to do that.

Savannah Meksto: 26:59

Thanks, Bob. As Bob mentioned, we do have a couple of easy ways for you to contact our team. Whether you're a social worker, as he mentioned, or you just want some help, we're here. I have our phone number and a link. Our 1-800 number is 1-800-990-6030. You can call that number and talk to our team. We'll ask you a few questions, get some more information, and then you can ask us questions too. We are here to help. You can also email info at mannorlaw. com, and that's just I-N-F-O-@-M-A-N-N-O-R-L-A-W dot com. Thanks again, everyone, for joining us today and we look forward to seeing you next time. Thanks for listening. To learn more, visit mannorlawgroup. com and we'll see you next time.