Article 41-Estate Planning Series: How the VA is Changing the Rules for Veterans to Receive the Improved Pension Benefit – Part 1

Written by Wright Law on . Posted in Estate Planning

For veterans struggling with low income and/or high out of pocket medical costs, the improved pension benefit can be an important source of assistance.  It is my hope that the information provided in the last few columns can help veterans who have sacrificed so much for us. 

However, before moving on to other planning issues, I need to explain some changes that are likely coming.  I do not know for sure when these changes will occur, but the changes could be effective as soon as February 2016.

This column is based on information the VA has been publishing.  However, the VA can (and likely will) make changes until the final regulations are published.  It is my hope that some advance notice may help veterans prepare for these changes.  Still, be careful about making any changes to your retirement or estate planning until the final regulations are published.

There are three primary areas I expect will change:

First, I anticipate that the VA will adjust the net worth (assets minus debts) threshold to a specific number.  In a prior column I stated that there is no specific net worth limit which will automatically qualify a veteran for pension benefits; although a net worth less than $80,000 has been considered an informal threshold.

It appears the net worth limit will soon be set at $119,200.  This amount applies to the veteran, or if the veteran is married, to the veteran and his/her spouse. 

It is likely not a coincidence that this amount ($119,200) is also the amount used to help determine if a Medicaid applicant qualifies for Medicaid assistance.  This amount is currently the maximum “community spouse resource allowance” (CSRA), or the amount of assets the spouse of a Medicaid applicant can own without disqualifying the Medicaid applicant.  This number, whether used for veteran pension benefits or Medicaid assistance, will be indexed for inflation.

I will provide additional important information about this and other likely changes in my next article.

 © 2015 Steven J Wright  

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