VA, CONGRESS CRAWL TOWARD ENDING ABUSE OF VET PENSIONERS
In 2012, the Government Accountability Office found more than 200 financial planning firms and estate law offices enticing veterans or their survivors into costly annuities or irrevocable trusts intended to hide or reallocate their assets so they qualify for VA pensions that the claimants wouldn’t be eligible for otherwise.
Since then, the Department of Veterans Affairs and the Congress have been crawling toward actions to stop the abusive practices, which twist the intent of the pension benefit in ways to help some veterans, put others in financial binds, and generate fees or profits or streams of residents for the schemers.
The crawl toward reform continues. VA is still working on a draft rule first released for public comment in January 2015. Final publication of the “Net Worth, Asset Transfers and Income Exclusions for Needs-Based Benefits” rule was expected this past summer. However, it remains “in VA’s internal concurrence process,” said a VA spokesman Wednesday.
Meanwhile, the House veterans’ affairs subcommittee on disability assistance and memorial affairs held a first ever hearing last month on legislation to address financial abuses of the pension program. The Veterans Care Financial Protection Act (now HR 3122) was first introduced in 2014.
The VA pension program exists to help veterans in financial distress if they served at least a day of wartime service, at least 90 consecutive days on active duty and earned an honorable or a general discharge. To be eligible for the basic VA pension, veterans also must have only modest annual incomes or none at all.
They can qualify for more VA financial help, however, if they are disabled and unable to leave their homes unassisted, or they have unmet daily living needs or they face exorbitant medical, assisted care or nursing home costs. The additional financial help is called the VA Aid and Attendance benefit.
“It’s an absolute lifeline for veterans who have significant health problems,” John Katz, the American Legion’s assistant director for pensions at the VA regional office in Philadelphia, told me late last year. “Many people who laid their lives on the line for their country are incapable today of taking care of themselves without housebound benefits or aid and attendance, in addition to the non-service connected [VA] pension. For them there’s no other way they’d survive.”
About 303,000 wartime veterans and 220,000 survivors draw VA pension benefits. Veteran advocates believe thousands more would qualify if they knew the program existed and applied. What has raised the profile of pensions recently, however, have been the reports of abuse and target marketing by unscrupulous financial planners, lawyers or even care facilities seeking vets who are ill or elderly.
The pension is a needs-based benefit with need determined using thresholds on annual incomes and on assets or net worth. For example, a wartime vet with no dependents can qualify for all or a portion of the basic pension benefit if he or she has income, including social security, less than $12,907 annually. If income is $10,000, for example, the benefit would be calculated by the maximum annual pension rate of $12,907 minus $10,000, for a total of $2907 annually.
Click here to read more...