Aid and Attendance is a wonderful program that can help elderly veterans and their surviving spouse pay for long-term care in their home, assisted living facilities and, if properly documented, other senior living facilities.  As such, it can help elders avoid quickly depleting their savings on home care and assisted living costs, which results in the only care option then being having to move to a nursing home and qualifying for Medicaid.  You can obtain additional information about the program here .

Unfortunately, legislation is pending in Congress that, if passed, will have the effect of restricting eligibility for the United States Department of Veterans Affairs Aid and Attendance program.  The following is a summary of the proposed legislation:

• The legislation would create a 36 month look back period.  Currently, the VA only looks back to the first day of the month in which the application is submitted in order to determine if the veteran/spouse meets the program's asset qualification criteria.

• The new legislation would create a penalty period if, during the 36 month look back period, the veteran or spouse made an outright transfer of assets, transferred assets to certain trusts, sold assets for less than fair market value, or made gifts to family members.

• The penalty would be that the veteran/spouse would not qualify for the benefit for a period of time.  The period of time would be the amount transferred divided by the applicable VA benefit. The result of that equation would be the number of months no benefit would be received.

• The legislation provides that the purchase of an annuity or other financial instrument or investment within the 36 month look back period is considered a transfer resulting in a penalty.  Certain annuities can be an important part of many seniors financial planning in retirement, so it is a shame that Congress would penalize senior veterans and their spouses who may be engaging in normal retirement planning.  

• The effective date of the legislation would be one year after it is enacted.

It is unknown if this legislation will actually be enacted.  Both the Senate and the House of Representatives would have to pass it, but the legislation is being worked on in both houses of Congress.  If it is passed, then the President will have to sign it.  Since the legislation is being presented and marketed as protecting veterans, it may be the type of feel good legislation that an otherwise unproductive Congress feels they should pass or finds easy to pass.  The effect will be to reduce the number of ways to pay for long-term care for Veterans and their surviving spouses.

My recommendation is that if a veteran or surviving spouse may need this benefit now or in the next 6 months, they should meet with an elder law attorney who is an accredited agent soon in order to determine if they should apply under the current law.  If the new law is passed, certain planning opportunities will be lost.

With the new legislation pending, it is important to note that a correct and complete application must be submitted the first time.  It can take the VA 9 months or more to notify an applicant of an incomplete application or to deny an incorrect application.  If a proper application is not submitted now, the veteran/spouse may have to re-apply under the less favorable new law.  You can read about the issues with incorrect and incomplete applications here.

For additional information about the Aid and Attendance program, you can request a copy of my report on the program by clicking here.