Understanding the VA’s 3-Year Look-Back for Pension Benefits

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For wartime veterans and their families, the VA Pension with Aid & Attendance can be a crucial financial resource for managing the high costs of long-term care. However, the application process includes a strict financial review known as the 3-year look-back period.

Understanding this rule is essential for any family considering applying for this benefit. Let’s break down what it is and how it works.

What is the 3-Year Look-Back Period?

Effective October 18, 2018, the VA implemented a 36-month (3-year) look-back period for pension claims. This means that when you apply for benefits, the VA will scrutinize any assets you have transferred (given away or sold for less than fair market value) within the three years immediately preceding your application date.

The purpose of this rule is to prevent applicants from giving away their assets simply to meet the VA’s Net Worth Limit for eligibility.

How the Look-Back and Penalty Period Work

If the VA finds that you transferred assets during the look-back period to qualify for the pension, they will impose a penalty period—a certain number of months during which you will be ineligible for benefits.

  • Calculating the Penalty: The penalty is calculated by taking the total value of the transferred assets and dividing it by a specific number set by the VA. For 2025, this divisor is $2,873 (the maximum monthly pension rate for a veteran with one dependent). The result is the number of months the penalty will last.
  • Maximum Penalty: The penalty period cannot exceed five years.
  • When the Penalty Starts: The penalty period begins on the first day of the month following the date of the last asset transfer.

It’s important to note that any transfers made before the rule’s start date of October 18, 2018, are not subject to this look-back.

What Assets Are Counted?

The VA has a Net Worth Limit that an applicant’s assets cannot exceed. For 2025, this limit is $155,356.

When calculating your net worth, the VA includes assets like bank accounts, stocks, bonds, mutual funds, and vacation homes. However, they do not count certain assets, including:

  • Your primary residence (on a lot of up to two acres).
  • Your personal vehicle.
  • Personal belongings like furniture and clothing.

Transferring assets that are not counted toward the net worth limit (like your primary home) will generally not result in a penalty. However, these rules can be complex, and professional guidance is highly recommended to avoid costly mistakes.

The Importance of Proper Planning

Navigating the VA’s look-back rule and financial eligibility requirements can be incredibly tricky. A mistake made during the application process can lead to a lengthy penalty period, denying your family access to benefits when they are needed most.

An experienced elder law attorney who is accredited by the VA can analyze your unique financial situation, determine the best time to apply, and help you understand all of your options for legally and ethically qualifying for the benefits you have earned.

If you have questions about your eligibility for the VA Pension with Aid & Attendance, contact our office today at (919) 256-7000 to schedule a consultation.