Article 38-Estate Planning Series: The Assets a Veteran Can Own to Qualify for the Improved Pension Benefit

In recent weeks I have been addressing the improved pension benefit, a tax free cash payment that may be available to senior age veterans.  This benefit is “need based,” meaning applicants (which can include the spouses of deceased veterans) must show their income and their net worth (meaning their assets minus their debts) do not exceed certain thresholds.  This column will address the assets that an applicant may own. 

Qualifying for the improved pension benefit is similar to qualifying for Medicaid long term care assistance.  However, the standards are quite different.  For example, when applying to Medicaid, assets of a spouse may not count against the applicant’s threshold.  However, when applying for improved pension benefits, the assets of the spouse are included.

Additionally, unlike Medicaid, there is no hard and fast number that a veteran’s assets must fall below to qualify.  Instead the Veterans Benefit Administration tries to determine whether the applicant’s financial resources are sufficient to meet the applicant’s basic needs without assistance from the VA.  If so, the application will be denied.   However, currently, a net worth under $80,000 is often viewed as the threshold that will more likely result in approval of the application for improved pension benefits.  

Another relevant factor will be how easily the applicant’s assets can be converted into cash.  The easier it is to convert assets to cash, the more problematic it may be to obtain approval.

So what assets count in determining an applicant’s net worth?  Essentially, any assets except the 1) applicant’s home, 2) motor vehicles used for family transportation and 3) normal household objects and possessions.   Other assets of the veteran will likely be counted.  Thus, if the veteran’s remaining assets total less than $80,000, he/she may have a strong claim for improved pension benefits.

Next column, I will address the income limits for a veteran to claim improved pension benefits.

© 2015 Steven J Wright