The Department of Veterans Affairs has issued final regulations regarding net worth, asset transfer and income exclusions for needs-based veterans benefits programs. The regulations adopt the Community Spouse Resource Allowance from the Medicaid program as the net worth limit for eligibility for needs-based veterans benefits programs. In 2018, the Community Spouse Resource Allowance is $123,600.
The regulations include several provisions about calculating net worth. These provisions include the claimant’s primary residence is excluded as an asset, the income and assets of a child living in the primary residence are counted in the applicant’s net worth, assets of the claimant’s spouse are counted even if the claimant does not live with the spouse and assets of a guardian are counted for a surviving child’s claim, an income deduction for disabled veterans, and both the principle and distributions from individual retirements accounts are counted. The regulations do not distinguish between liquid and non-liquid assets.
The regulations also implement a penalty for transfer of assets for less than fair market value. The maximum penalty is 5 years of benefits eligibility. Assets transferred as a result of fraud, misrepresentation or unfair business practice related to sale or marketing of financial products or services are not considered transferred for less than fair market value.
Amounts paid by a veteran, veteran’s spouse or surviving spouse on behalf of a veteran’s child for unreimbursed medical expenses are deductible if expenses exceed 5 percent of the veteran’s benefit amount. In addition, expenses for institutional care and in home care are deductible.
The pension rate is reduced when a pension recipient is receiving Medicaid-covered nursing home care. The regulations implement a statutory change that this provision applies to surviving children. The regulation also adds that this provision should not cause an overpayment of benefits unless there is willful concealment of information. (83 Fed. Reg. 47246, September 18, 2018.)