There are several government benefits available to seniors who need help paying for extended care. However, the qualifications and requirements for these benefits can often be complicated and confusing, leaving many people unsure of how to qualify or whether they are applying for right benefit for their family.
When seniors and their families first meet with me, I like to find out about their current care needs, how much they are paying for care, their income, and their concerns for the future. This helps me determine whether they are eligible for the VA pension or Medicaid and allows me to focus on any future family changes or problems that we may need to plan for. After we talk about their concerns, I help the family match their care needs with their financial situation and create a plan that will preserve their assets, protect their family and get them the care that they need. Every family is unique and the plan for your family should be unique as well.
Two of the most important benefits available to seniors are Medicaid and the Department of Veterans Affairs (VA) Aid and Attendance Pension. While the programs may seem similar, the eligibility requirements and the benefits are quite different.
VA Aid and Attendance Pension
The VA pension is available for veterans and their surviving spouses. It pays a monthly dollar amount and that money can be used to help pay for a nursing home, assisted living rent, adult day care, in-home care, including when a child is caring for a parent, and other medical expenses. For a married veteran, the maximum pension is $1,949 per month. A single veteran may receive a maximum of $1644 per month and a surviving spouse may receive $1056.
In order to be eligible, the veteran must have served 90 days of active duty in the military, with one day during a period of wartime. The VA has established specific dates that constitute a “wartime period,” but generally veterans who served during World War II, the Korean War, the Vietnam War, and the Persian Gulf War will be eligible. Veterans also must not have been dishonorable discharged.
Next, the veteran or surviving spouse must show that they need the assistance of another person in order to perform daily tasks, such as eating, bathing, dressing, cooking, taking medications, or driving. Veterans and surviving spouses needing assistance or a protective environment to stay safe because of dementia may also qualify for the benefit.
Finally, in order to receive the pension, all applicants must meet the asset restriction. Unlike Medicaid, the VA does not have a set asset limit for this pension. Instead, the VA will look at many factors to determine if assets are too high. The VA does not include the value of the home or a car.
Even though there is an asset limitation, the VA does not penalize for transferring assets outside of the veteran or spouse’s name, if done correctly. This means that there are many planning options available to help families become eligible for the benefit. However, you must be careful. When assets are transferred to secure eligibility for VA benefits, the family must have a plan ready in the event that their loved one needs Medicaid in the future to pay for extended nursing care. Medicaid imposes a penalty for assets that are gifted away or moved into certain types of trusts and I strongly suggest that you work with an experienced elder law attorney before making any gifts or transfers.
When should you consider VA Aid and Attendance?
I generally recommend that families apply for Aid and Attendance when they have medical expenses that exceed a large portion of their income and using the pension would help bridge that gap. For example, if Mom and Dad have a monthly income of $2,500, and they move into an assisted living facility that costs $3,500 per month, I would recommend that they apply for the VA pension. For a married veteran, the maximum pension is $1,949 per month. Therefore, the VA pension, combined with their income, would give them enough money to pay for their assisted living community. Further, in many states there is little or no Medicaid help for assisted living, making the VA benefit even more valuable.
What if your loved one is in a nursing home? Typically, the cost of nursing home care is often so high that the VA pension does not pay enough to cover that cost, even when combined with your loved one’s monthly income. However, if your parent is going through a Medicaid penalty period or needs time to spend down assets before he can be eligible for Medicaid, the VA pension can be of great help during that transitional period.
What is Medicaid?
While Medicaid is also designed to help with the cost of long-term care, it differs from the VA pension. Medicaid does not pay a monthly pension. Instead, Medicaid directly pays the care provider, i.e. the nursing home.
Many people believe that they can only get Medicaid once they have spent all of their money in the nursing home, but this is absolutely not true. To be eligible for Medicaid, the applicant may only have $2,000 in countable assets. However, not all assets are “countable” assets. In Virginia for example, non-countable assets include up to $2,000 cash, your home (under certain circumstances), one car, personal property, certain funeral and burial funds (including a pre-paid funeral or burial), certain property used in a trade or business, some life insurance (up to $1,500 cash value), and certain annuities.
Further, even though the Medicaid applicant may only have $2,000, we still have many options for legally sheltering and protecting assets. Unfortunately, Medicaid does not pay for everything that someone needs while they are in a nursing home. Therefore, it is important to be able to keep some assets for the benefit of the Medicaid applicant so that they can have what they need, as well as those things that bring them comfort and enjoyment. Typically, a married couple can protect most, if not all, of their assets and have one spouse become eligible for Medicaid. A single person can typically protect half of their assets and then become eligible Medicaid. Never assume that your parent or loved one is not eligible.
When should you consider Medicaid?
I typically recommend Medicaid when someone needs extended care in a nursing home. This is because the cost of the nursing home is generally so high that the person’s income, even coupled with the VA benefit, is not enough to pay for the care without depleting their assets.
I may also recommend Medicaid for home care when the household income is high, but the person requiring care has a low income. The VA considers the total household income, while Medicaid typically only looks at the income of the person needing care. For example, if Dad has a monthly income of $4,500, and Mom’s monthly income is only $500, it may not be wise to apply for the VA pension. To get VA benefits, Mom and Dad would have to spend a large amount of their income each month on Mom’s care. If they can’t afford that much care or if Mom doesn’t need that much care, I may recommend that Mom apply for Medicaid home care benefits. Because Medicaid only looks at Mom’s income, in many states Mom would qualify regardless of Dad’s high monthly income. However, it is important to make sure that Mom still meets the asset requirement for Medicaid, which may require sheltering assets before she could become eligible.
While these benefits are complex, they can be a tremendous help for your family and you should never assume that your loved one cannot qualify. Caring for a senior parent can be difficult, but taking the time to fully explore all of the benefit options is worth the effort so that your loved one can preserve their assets, protect their family and get the care they need.
Angela N. Manz, Attorney at Law
The Law Office of Angela N. Manz
Virginia Beach, Virginia 23452