The VA Pension Benefit (Aid and Attendance) is a benefit available to wartime veterans aged 65 and over who have medical expenses and need help paying them. The benefit has been around since the Spanish American War and we’ve helped a lot of veterans qualify for the benefit. Because of abuses of the system by folks like unscrupulous annuity salesmen deceptively portraying themselves as “veterans’ benefits advisors”, Congress is considering legislation to change the rules surrounding the benefit.

Congressional Investigation

Sometime last year, Congress requested that the Government Accounting Office (GAO) investigate abusive sales tactics used on aging veterans and the VA’s policies regarding these activities.

The GAO investigated the situation by using undercover agents posing as the children of aging veterans. Some of these telephone conversations with financial products purveyors and others are available for you to listen to on the GAO’s website.

The report detailed the lack of clear guidance from VA and inconsistent decisions regarding who qualifies and who doesn’t. If you listen to the recorded calls, you can hear the financial salesmen on the phone talking about obtaining assets for clients with over $1,000,000 in assets. That definitely seems like abuse to me of a means based benefit program meant to help less wealthy folks with their medical expenses.

The GAO also suggested that Congress take action by implementing loopback rules and penalties similar to Medicaid. The report also contained a letter from VA indicting that VA was working on asset transfer regulations that should be completed by December 2013.

What’s Next

The Senate Special Committee on Aging held a hearing on June 6, 2012 to consider the report. The hearing included testimony from the US Department of Veterans’ Affairs, the GAO, a representative from the American Legion and the CEO of one of the sham veteran’s benefits companies. The day of the hearing, Senator Richard Burr (R, NC) and Senator Ron Wyden (D, Oregon) introduced a bill to impose a lookback period similar to Medicaid of 36 months and impose penalties for transfers that violate the rules. The period of ineligibility proposed by the statute would be calculated by dividing the total amount of benefits transferred by the amount of VA benefit the applicant would otherwise receive. So, for example of John Q. Public transferred assets worth $300,000 to his son on June 15, 2012 and then applied for VA benefits on August 10, 2014, the penalty period would be 148.5 or 149 months. Because the penalty is capped at 36 months, Mr. Public would be ineligible for a period of 36 months.

The statute would not take affect for twelve (12) months after enactment and it seems unlikely to me that there will be much chance of anything happening in an election year, but stranger things have happened. We’ll keep you informed as the situation develops. If you’re a veteran considering applying for the Aid and Attendance benefit, now is the time to act.