May Day for War Period Veterans: What We Don’t Know
Denied VA Benefits? You Might Not Have the Whole Story.
For wartime veterans and their families, navigating the U.S. Department of Veterans Affairs (VA) to secure long-term care benefits can be a frustrating journey. Many families who apply for the VA Pension program are initially denied and are often given incomplete information, leaving them to believe they have no other options. This is especially common when it comes to the VA’s strict financial eligibility tests.
The Common Scenario: A Denial Based on Assets
Consider a typical situation: A wartime veteran and his spouse have been diligent savers, accumulating a nest egg of a few hundred thousand dollars. When they apply for the VA Pension to help with long-term care costs, their application is denied because their assets exceed the VA’s limit. The VA’s denial is technically correct, but it’s only half the truth.
What the VA often fails to explain is that there are legal and ethical strategies that can be used to restructure assets, allowing a veteran to meet the financial requirements while preserving their life savings.
Understanding the Three Tests for VA Pension
To qualify for the VA Pension, which provides a reimbursement for long-term care expenses, a veteran must meet three tests:
- Service Test: The veteran must have served at least 90 days of active duty, with at least one day during a recognized period of war, and have a discharge other than dishonorable.
- Asset Test: The veteran’s household must have countable assets below a certain limit set by the VA (for 2025, this is $155,356).
- Income Test: The veteran’s household income, after deducting unreimbursed medical expenses, must be below the maximum pension rate.
Failing either the asset or income test will result in a denial, but this is often where professional planning can make all the difference.
The Solutions the VA Won’t Tell You About
In the example above, the couple was denied because of their nest egg. However, an experienced elder law attorney could have advised them on strategies to pass both the asset and income tests, such as:
- Creating a VA-Qualified Trust: Moving assets into a specific type of irrevocable trust can convert them from “countable” to “non-countable” for VA purposes, allowing the veteran to meet the asset test.
- Using a Care Contract: A formal agreement to pay a family member for care can be counted as a medical expense, which reduces the veteran’s income for the income test.
The Critical Connection to Medicaid
It is crucial to remember that VA planning and Medicaid planning are deeply intertwined. A strategy that helps you qualify for VA benefits could unintentionally jeopardize your future eligibility for Medicaid, which is the primary payer for nursing home care in the U.S. This is why it is essential to consult an attorney who has a deep understanding of both systems to create a comprehensive long-term care plan.
If you have questions about your eligibility for Veterans Benefits or need to create a plan that also considers future Medicaid eligibility, our experienced attorneys can help. Call our office at (919) 256-7000 to schedule a consultation.