A national organization of elder law attorneys on March 17 filed a 27-page letter with the VA arguing why the department should not make proposed changes to rules for a pension program for low-income veterans aged 65 and older.
The VA wants the rules tightened up to ensure that the benefit, established to help low-income veterans and survivors, is not manipulated by those who would unload or conceal assets in order to qualify for the pension. Notably, the VA wants to link veterans’ eligibility for the program to their net worth over the prior three years.
“[The National Academy of Elder Law Attorneys] understands why VA is seeking to stop pension poachers and prevent wealthy veterans from transferring assets in order to qualify for the veterans pension program, and fully supports that objective,” the organization states in its position paper. “NAELA believes that only those veterans truly in need of federal support and assistance should have access to this needed program.”
“But there’s an important disconnect occurring in how this proposed rule will affect veterans and their surviving spouse who are legitimately eligible for this program.”
NAELA officials said the rules change presumes that any transfer made during the three-year look-back period – including donations to places of worship or charity organizations – was done for the purpose of becoming eligible for the pension. The proposed rules change also offers little recourse for appeal to explain the legitimacy of any transfers in that three-year window.
“The final rule should require that transfers only made for the sole purpose of qualifying for VA pension be penalized,” NAELA states. “If the claimant can show by a preponderance of the evidence or a prior pattern of gifts that a transfer was not made for the purpose of qualifying for VA pension but for a completely unrelated purpose, no penalty should be imposed.”
On March 20, Military.com incorrectly published an article stating that NAELA intends to sue the VA over their concerns with the proposed rules change. Nancy Sween, NAELA’s spokeswoman, said the organization opposes the proposed rules change, but “is not considering any form of litigation if this rule is enacted, nor has NAELA ever made such a claim.”
Among the most serious limitations for veterans or survivors resulting from the proposed change are those for allowable medical expenses, NEALA said.
“VA claims it will save about $134 million over five years by imposing the three-year look-back compared to $313 million from limitations to medical expenses,” NAELA said in its position paper. “These limitations include capping the deduction for in-home health care to the national average wage for home health aides and prohibiting the deduction of expenses incurred at an independent living facility where they are not providing health care services or custodial care.”
The group said those changes will only further impoverish veterans and survivors, placing many in need of long-term care into an institution sooner than they prefer.
“And studies show that keeping veterans and others in need of long-term care in the community, rather than forcing them into institutions, costs less,” NAELA said.
The proposed rules change follows a 2012 General Accountability Office report that recommended the assistance be means-tested, as are other federal programs.
In 2011, the GAO report stated that the VA paid out about $4.3 billion in pension benefits for about 517,000 recipients to include veterans or their survivors. These benefits were extended to low-income veterans age 65 and older as well as veterans under age 65 that are permanently disabled due to military service.
GAO said about 314,000 of the recipients were veterans and 203,000 were survivors. About 329,000 of those recipients were over 65, with an average age 71 for veterans and 79 for survivors. On average, veteran claimants received $9,669 annually and survivors $6,209.
The GAO claimed that its investigation found evidence that some wealthy veterans had been able to transfer or hide assets in order to become eligible for the pension. GAO officials warned in its report that the pension program could not be sustained without ensuring that only those veterans and survivors for whom Congress enacted the program were served by it.
-- Bryant Jordan can be reached at bryant.jordan@military.com.
