Veterans Benefits for Home and Long-Term-Care: The Tax-Free Veterans Pension.

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If you are a veteran or are helping someone who is, there are a wide variety of benefits and service available to you.

According to the U.S. Census Bureau, there are more than 9.2 million veterans ages 65 or older in the United States. These Veterans, like you, served in conflicts around the world including World War II, the Korean War, the Vietnam War, and even in the Persian Gulf War.

To help you meet the challenges of aging, the VA offers a wide variety of benefits and services. While some are income-based, many programs aren’t. As the son of a veteran, I’m happy to provide this article (and others in the series) to VA Benefits for Home and Long-Term Care in recognition and honor of your service to our country.

The 2019 Veterans Pension

If you’re a lower-income veteran, the VA can help you and your family supplement your income by providing a tax-free Veterans Pension benefit.

Eligibility

To qualify for a Veterans Pension, you must have served at least 90 days of active duty, with at least one day during a wartime period. If you entered active duty after September 7, 1980, you must have served at least 24 months or the full period for which you were called or ordered to active duty (with some exceptions), with at least one day during a wartime period.

Under current law, the VA recognizes the following wartime periods to determine eligibility:

  • World War II (December 7, 1941 – December 31, 1946)
  • Korean conflict (June 27, 1950 – January 31, 1955)
  • Vietnam era (February 28, 1961 – May 7, 1975, for Veterans who served in the Republic of Vietnam during that period; otherwise August 5, 1964 – May 7, 1975)
  • Gulf War (August 2, 1990 – through a future date to be set by law or Presidential Proclamation)
  • Congress has not enacted legislation that would make the periods covering the 1983-1984 Lebanon crisis or the invasions of Grenada and Panama wartime service.

In addition to meeting minimum service requirements, you must be:

  • Age 65 or older OR
  • Totally and permanently disabled OR
  • A patient in a nursing home receiving skilled nursing care OR
  • Receiving Social Security Disability Insurance OR
  • Receiving Supplemental Security Income

As these pension benefits are need-based, your annual “countable” family income and/or net worth must be less than the amount set annually by Congress.

Countable income generally includes earnings, disability and retirement payments, interest and dividend payments from annuities, and net income from farming or business to yourself and/or an eligible dependent. However, some expenses, such as unreimbursed medical expenses, may reduce your countable income (see example below).

Net worth includes assets such as bank accounts, stocks, bonds, mutual funds, annuities, and any property other than your primary residence. While there is no pre-determined maximum net worth, the general amount used for determining eligibility is $80,000 or less in total assets, which excludes a house and one vehicle for the veteran or spouse.

Upon review, the VA will determine whether your assets are of a sufficiently large amount that you could live off of them for a reasonable period of time. If, however, it is determined that you are eligible, your benefit is calculated to be the difference between your “countable” income and the limit set by Congress. The VA generally pays this difference in 12 equal monthly payments.

Unlike Medicaid, there is no penalty if you have recently gifted assets to family. The VA looks at the value of assets on hand at the time of application. As a result, you can use this strategy to legally qualify in you have a higher net worth.

If you are currently receiving disability compensation from the VA, you cannot receive both the compensation and pension. However, you can file for the Improved Pension/Aid & Attendance (see below) based on non-service connected health issues. If your application is approved, the VA will pay whichever benefit has the highest dollar amount.

Although you must have received an honorable or general discharge to qualify for the pension, you can appeal to the U.S. Military for an upgraded discharge if you believe you received a less-than-honorable discharge because of discrimination based on religion, race or sexual orientation

2019 Veterans Pension Rates (As of December 1, 2018)

While the U.S. Congress, determines an annual income limit to begin to receive benefits, it also establishes The Maximum Annual Pension Rate (MAPR). This is the maximum amount of money payable to a veteran, spouse or child who qualifies for the pension.

Applicant(s)

Single veteran: MAPR $13,535
A veteran with a spouse or one dependent: MAPR $17,724
Two veterans married to each other: MAPR $17,724
Add for each additional child: MAPR $2,313 Monthly Rate $187.50

VA Pension Benefit Calculation

While the amount of the award depends on your income, assets and the actual costs of care you pay out-of-pocket monthly, any pension benefit awarded is calculated to be an amount equal to the difference between your countable family income and the pension limit set annually by Congress.

Here are some examples:

• The current annual income limit as of December 1, 2018, for a veteran and spouse, is $17,724. If, for example, the combined income for you and your spouse is $14,724, your VA pension would be $3,000 ($17,724 – $14,724 = $3,000), which will be paid in monthly installments.

• If your total countable family income is more than the current annual income level of $17,724, you are not eligible for a VA Pension for the current year. However, you may reapply again should your countable income falls below the current limit at that time.

A portion of your unreimbursed medical expenses (what you pay out of pocket) may reduce your countable income—and increase your pension benefit. This may include assisted living costs, home health care, insurance premiums, Medicare premiums, ongoing prescriptions and more.

Using the example above of a combined family income of $14,724:

  • If your medical expenses are $10,000 and medical insurance pays $8,400 of that amount, your out-of-pocket medical expense is $1,600.
  • That amount of out-of-pocket medical expenses which is more than 5% of the maximum rate of pension, or $713.98 ($17,724 x .05 = $886.02), may be deducted from your total combined income.
  • Since the $1,600 out of pocket expenses is greater than $886.02, you may reduce your family income by $713.98 ($1,600 – $886.02). So, your adjusted income for VA pension purposes is now $13,527.02 ($14,724 – $713.98).
  • Your VA pension would then be calculated by subtracting your adjusted income of $13,527.02 from $17,724.00, resulting in an annual pension benefit of $4,196.98.

How To Apply

You can apply for Veterans Pension online or download and complete “Application for Pension” (21P-527EZ). You can then mail your application to the Pension Management Center (PMC) that serves your state. Listed below are the correct mailing addresses for your state:

Philadelphia VA Regional Office

Service Areas: Connecticut, Delaware, Florida, Georgia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, North Carolina, Pennsylvania, the Philippines, Puerto Rico, Rhode Island, South Carolina, Vermont, Virginia, West Virginia and all other foreign countries not listed below under the St. Paul VA Regional Office.

Department of Veterans Affairs

Claims Intake Center

Attention: Philadelphia Pension Center

PO Box 5206 Janesville, WI 53547-5206

Fax: 1-844-655-1604

Milwaukee VA Pension Center 

Service Areas: Alabama, Arkansas, Illinois, Indiana, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Ohio, Tennessee, Wisconsin

Department of Veterans Affairs

Claims Intake Center

Attention: Milwaukee Pension Center

PO Box 5192

Janesville, WI 53547-5192

Fax: 1-844-655-1604

St. Paul VA Regional Office 

Service Areas: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Iowa, Kansas, Minnesota, Montana, Nebraska, North Dakota, New Mexico, Nevada, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, Wyoming, Mexico, Central and South America, and the Caribbean

Department of Veterans Affairs

Claims Intake Center

Attention: St. Paul Pension Center

PO Box 5365

Janesville, WI 53547-5365

Fax: 1-844-655-1604

You may also visit your local regional benefit office and turn in your application for processing. You can locate your local regional benefit office using the VA Facility Locator.

Compensation & Pension Exam

Finally, if you’re planning to file or have recently filed a VA compensation or pension claim, an important part of the claim decision process may include a VA claim exam, also known as compensation and pension (C&P) exam. The VA has created useful resources to give you tips on the process and help you know what to expect during a VA claim exam. You can view a short video presentation and learn more by clicking here.

Summary

If you are a veteran or are helping someone who is, there are a wide variety of benefits and service available to you. While some are income-based, many programs aren’t. By becoming familiar with all of the benefits in this article and the other four in the series, you can take full advantage of everything you’re entitled to—making your journey along the gray mile easier and more affordable.

Tom Text

@TomJonesNBTX

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