On January 23, 2015, the VA issued proposed new regulations that would impact the application process and eligibility determination for Veterans and their surviving spouses. Some of the proposed regulations include:
- A 3 year look back period for gifts/transfers of assets. Surprisingly, transfers to Revocable Trusts would trigger a complete denial of eligibility, even though the applicant has control over the Trust assets.
- If the applicant made a gift/transfer of assets then the applicant would be ineligible for benefits unless the entire gift/transfer is returned to the applicant within 30 days of the application filing date. This provides a very short time for the applicant to get the gift back, so, timing of the application would be crucial. Additionally, this “all or nothing” approach means that the applicant can do nothing to shorten the penalty period once it is imposed; it does not matter if the applicant can “partially cure” the gift/transfer and get back some of the transferred/gifted funds.
- Penalizing the Veteran, or his/her surviving spouse, up to ten years for making transfers/gifts of assets for less than fair market value. Additionally, the VA established the presumption that a transfer/gift was made for purposes of qualifying for VA benefits unless the applicant can prove otherwise by clear and convincing evidence.
- Establishing a maximum net worth of $119,220. Unlike Medicaid, the VA’s definition of net worth would include annual income. This would allow an individual with low income to have more savings in his/her name than an individual with a higher income.
- Establishing that the home property is exempt to the extent that acreage is no greater than 2 acres. Any additional acreage must be sold, which may be difficult to do if acreage is slightly greater than 2 acres.
These proposed changes present significant consequences to Veterans and their spouses. To have your thoughts heard about these proposed changes you may submit comments before March 24, 2015. All comments must reference that they are in response to “RIN 2900-AO73, Net Worth, Asset Transfers, and Income Exclusions for Needs-Based Benefits.” Comments can be submitted:
- Online: http://www.regulations.gov
- By Mail to: Director, Regulation Policy and Management (02REG), Department of Veterans Affairs, 810 Vermont Ave. NW., Room 1068, Washington, DC 20420
- By Fax to: (202) 273-9026