The Veterans’ Pension, Aid and Attendance, and the Department of Human Services
A two part series by Anthony Marone, Esq. of McAndrews Law Offices, P.C.
The VA Pension provides monthly payments to veterans who are disabled or over the age of 65. This payment may provide crucial funds to be used for the care of a veteran in the community. However, when the same veteran applies for Medical Assistance Long-Term Care benefits to assist with his or her medical care, he or she will find that the money received from the Department of Veterans’ Affairs causes serious complexities for receipt of those benefits. Part I of this article explains how to qualify for the VA Pension and why the veteran’s receipt of pension income could disqualify him or her from receiving Medical Assistance Long-Term Care benefits. Part II examines how conserved, lump-sum or overpaid VA Pension income could run afoul of the Medical Assistance Program’s resource limits.
The Problem of Conserved, Lump-sum, and Overpaid VA Pension Income
As stated in Part I of this article, the VA Pension and the add-on HB and A&A benefits are crucially important to pay for the care of a veteran or a deceased veteran’s dependents. However, there is a consistent delay in the VA’s processing of applications for the VA Pension and other notices of changed circumstances. This delay could cause the receipt of VA Pension benefits in one large lump-sum or require the veteran to conserve his or her VA Pension income for a possible return to the VA. In either circumstance, the veteran will likely have resources in excess of the allowable limits of the MA-LTC program. The excess resources must be correctly handled or the veteran will become disqualified for MA-LTC benefits.
The VA Pension and the MA-LTC Resource limit.
Regardless of whether the veteran resides in a nursing facility or is receiving MA-LTC Waiver Benefits, any amount of the conserved monthly payment from the VA will be considered the veteran’s resource in the calendar month after receipt. Conserved income, A&A, and/or HB benefits from the VA are considered the veteran’s resources in the calendar month after receipt. Eventually, if these funds are not properly spent, the veteran will become ineligible for MA-LTC due to resources in excess of the $8,000.00 limit.
Although this may appear to be a “good” problem to have, it is not. In a nursing facility, all of the veteran’s medical expenses, shelter expenses, food, etc. will be provided by the facility and paid for by the MA-LTC program. The veteran would not have many opportunities to spend his or her resources. Further, excess resources cannot simply be given away. Continuing eligibility for the MA-LTC program generally prohibits gifting. Therefore, careful monitoring and management of the veteran’s resources will be required to maintain his or her eligibility.
However, there is another circumstance where a veteran could receive excess resources in the form of a payment from the VA: a lump sum disbursement of retroactive benefits. Unlike the lump sum distributions for retroactive SSDI, lump-sum VA benefits are considered income in the month received and a resource in the subsequent calendar months. See, Policy Clarification PMN-18420-440. There is no period of time when the VA benefits are excluded. Id. This rule applies to the entire amount of the lump-sum payment, regardless of whether it is attributable to the VA Pension, HB benefits, or A&A. To maintain eligibility, the veteran must properly spend these resources. This is a common problem as delays in the VA’s processing of claims occur far too frequently.
Transition to a Nursing Facility and overpaid VA payments.
An issue of consistent confusion is what to do when a veteran transitions from the community, where he or she receives a monthly payment from the VA Pension with HB benefits or A&A, to a nursing facility. If the veteran is single with no dependents and receives MA-LTC in a nursing facility, the veterans’ monthly benefit will change to the $90.00 monthly A&A payment, possibly from the maximum amount of $1,794.00. Assuming proper notice is given to the VA; the VA should immediately reevaluate the case and adjust the amount paid to the veteran. However, delay is an ever present issue with the VA and the adjustment will not be immediate.
The adjustment to the veteran’s monthly payment could take six or more months. During this period of delay, the veteran will have received incorrectly paid, or “overpaid,” veterans benefits that are collectable by the VA. The veteran will receive income in the form of the VA Pension portion of the monthly payment that, according to the MA-LTC regulations, should be paid to the nursing facility to defray the veteran’s cost of care. Also, the veteran will accumulate funds that could exceed the MA-LTC resource limit. If the veteran attempts to pay the nursing facility or spend the funds, he or she could run afoul of the VA if it asserts an overpayment. If the veteran conserves the funds, he or she may be disqualified for MA-LTC. If the veteran attempts to return the funds the VA has not historically cashed the check.
When faced with this situation, the veteran, or his or her representative, should immediately segregate all the VA monies in excess of the $90.00 A&A. By segregating the funds, the veteran can satisfy a future VA overpayment claim and account to the Department for all the funds received during this transition period. The veteran can also address the Department’s income and resource issues by stating that he or she agrees to keep the funds segregated and will not access the funds until the overpayment issue is resolved. The Legal Office has unofficially taken the position that, under these unique circumstances, the Department will not consider the segregated funds available as income or as a resource until the VA overpayment is resolved.
Recently the VA has begun to resolve these overpayment issues. The VA has issued letters in a number of cases to veterans stating that it will not create an overpayment for monies paid during the transition period from the community to a nursing facility. When the veteran receives this letter, the conserved monies are clearly available.
The Office of General Counsel for the Department has given some guidance on how to deal with the overpaid funds when they become available. First, the veteran should request a Statement of Claim from Third Party Liability. This will give the veteran the amount of monies paid on behalf of the Department during the transition period. Second, all of the income portion of the VA benefits must be repaid to the Department as a pre-payment prior to death. This payment effectively solves the problem of contributing income to the facility for the veteran’s cost of care. Finally, any conserved A&A that is not used to replenish the veteran’s $8,000.00 protected resources must also be repaid as a pre-payment. Therefore, the veteran no longer has any excess resources.
This method of satisfying the Department’s issues has benefits for the veteran as well as the Department. The veteran avoids any interruption in his or her nursing facility care. He or she does not need to incur the expense of an appeal or reapplication. The Department receives the bulk of the overpaid funds and does not need to process a new application for the veteran.
Conclusion – Part II.
Unfortunately, the VA is not able to quickly react to the changing circumstances of the veterans it serves. A delay in processing the veteran’s application for the VA Pension could result in his or her receipt of a lump-sum payment that will disqualify him or her for MA-LTC benefits. A delay in processing the notice that the veteran entered a nursing facility and qualified for MA-LTC is far more complex. McAndrews Law Offices specializes in Disability law and Veteran’s issues and is readily available to assist any veteran with these complex issues. For any questions, call 610-648-9300.