By: Paul Lorrah
Learn how you can receive tax-free income to pay for your care costs
Long-term care costs can add up quickly. For veterans and their surviving spouses who need in-home care, assisted living care or nursing home, help may be available. The Veterans Administration (VA) has an underused pension benefit called Aid and Attendance that provides money to those who need assistance performing everyday tasks. Even veterans whose income is above the legal limit for a VA pension may qualify for the Aid and Attendance benefit if they have large medical expenses for which they do not receive reimbursement.
Aid and Attendance is a pension benefit, which means it is available to veterans who served at least 90 days, with at least one day during wartime. The veteran does NOT have to have service-related injuries or disabilities to qualify.
Veterans or surviving spouses are eligible if they require the aid of another person to perform an everyday action, such as bathing, feeding, dressing, or going to the bathroom. This includes individuals who are bedridden, blind, or residing in a nursing home.
To qualify, the veteran or spouse must meet the current asset guidelines. In addition, the veteran's income must be less than the Maximum Annual Pension Rate (MAPR).
Following are the MAPRs for 2017:
- Single veteran - $21,531
- Veteran with one dependent - $25,525
- Single surviving spouse - $13,836
- Surviving spouse with one dependent - $16,506
How it works. The amount a person receives depends on his or her income. The VA pays the difference between the veteran's income and the MAPR. John, a single veteran, has income from Social Security of $16,500 a year and a pension of $12,000 a year, so his total income is $28,500 a year. He pays $20,000 a year for home health care, $1,122 a year for Medicare, and $1,788 a year for supplemental insurance, so his total medical expenses are $22,910. Subtracting his medical expenses from his income ($28,500 - $22,910), John's countable income is $5,590. John could qualify for $15,941 ($21,531 - $5,590) in Aid and Attendance benefits.
Don't forget Medicaid
When planning and applying for VA benefits, be sure to plan for Medicaid as well. Medicaid benefits will pay 100% of costs involved with assisted living and skilled nursing care, so when an individual's finances [even with VA benefits] is not enough to pay for the care they need, it will be time to apply for Medicaid benefits. Medicaid has a 5 year look back with their eligibility, which means any planning strategies used such as transfers, trusts, etc, when applying for VA benefits may impact your Medicaid application if not done properly.
When planning for VA benefits be sure to consult a professional that is a specialist in both VA and medicaid benefits.
For the VA's Guide to Long-Term Care, click here.
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