VA Aid and Attendance Under GAO Scrutiny

For seniors who are veterans, and their surviving spouses, needing a little extra care, the VA Improved Pension with Aid and Attendance Supplement can be a godsend. The program provides a cash benefit to offset at least some of the cost of that aid and attendance, including health insurance premiums, deductibles and co-pays for regular, ongoing treatment, the cost of an assisted living facility, or the cost of care at home, even if provided by a family member. While it may not be enough to cover the cost of expensive memory care for veterans with low incomes, it can bridge the gap for many families in a way that will allow them to remain at home or afford respite care or an assisted living facility. And unlike Medicaid, the Veteran, especially if he is single, does not have to completely impoverish himself before qualifying.

Because the program is intended to be needs-based, the Government Accountability Office (GAO) recently conducted a study to determine whether wealthy veterans have been transferring assets in order to qualify. They found that, due to weak oversight and a lack of rules similar to other means-tested programs, this has been allowed to happen. For example, there are many classes of assets, such as annuities and trusts, that the application form does not ask about. And for the assets they do ask about, the VA frequently does not request supporting documentation, such as bank statements or tax returns. And unlike Medicaid, there is no “look-back” to determine if assets have been transferred, and no penalty period assessed even if the VA were to determine that there had been a transfer.

The GAO also found improper practices by other parties associated with the program. Some Veterans’ Services organizations have given improper advice, and some financial services organizations have pressured veterans to purchase specific types of annuities by implying that it is necessary to enable them to qualify.

As a result of the GAO’s recommendation, a bipartisan group of senators has introduced S.3270, which would impose a 3 year look-back for asset transfers. While it is unlikely that Congress will act on this bill before this year’s election, it does indicate that changes may be coming.

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