According to Department of Veterans Affairs census estimates, if you are a veteran or a veteran’s single surviving spouse age 65 and older, you are part of a group that is approximately 13 million strong. Compared to a total of 41 million Americans 65 and older, this is about 1/3 of the senior population. And this group is growing. The VA reports that about 42% of all veterans are 65 and older, with the bulk of the Vietnam veterans, the largest veteran class, still younger than age 65.
Senior veterans and their surviving spouses are typically in receipt of four VA cash income programs – Pension, Death Pension, Disability Compensation and Dependents Indemnity Compensation – along with VA healthcare and burial benefits and state veterans’ benefits. This week we will discuss Pension, Death Pension and Disability Compensation. Next week, we will discuss the remainder of the programs.
Pension and Death Pension. Pension and Death Pension are paid to veterans and their surviving spouses, respectively, who are non-service-connected disabled. Commonly called “aid and attendance,” these twin benefits provide cash payments to veterans who served during a period of war or to their single surviving spouses. Pension helps to cover the cost of home care, assisted living and nursing home services.
In order to qualify for Pension or Death Pension, the veteran, or the veteran’s surviving spouse, must typically meet three tests, the Medical Needs Test, the Income Test and the Asset Test. A medical need for assistance or supervision due to disability is generally required to qualify for the Pension benefit. This test is can be waived for certain surviving spouses and for veterans and surviving spouses with very low income who do not have long-term care costs.
For the Income Test, the household income of the veteran or the surviving spouse cannot exceed certain amounts for certain categories of applicants. This is called the Maximum Allowable Pension Rate (“MAPR”). The household may be eligible for certain allowances in certain circumstances that would lower the household income below the MAPR, so that the veteran or surviving spouse would meet the Income Test.
In order to meet the Asset Test, in most circumstances, household assets cannot exceed $80,000. This amount is not fixed, but may vary depending upon the facts and circumstances of the case. The home, one automobile and personal property are generally exempt from the Asset Test.
Cash income payments from Pension and Death Pension range from about $700 a month to a little over $2,000 a month depending on the type of claim and the medical rating involved. Most people don’t even know of the existence of this benefit. The VA does not advertise it, and as such, many eligible people never apply.
Disability Compensation. Disability Compensation is a tax-free benefit paid to a veteran for a service-connected disability that happened as a result of active duty, active duty training, inactive duty training or injury from VA healthcare. Cash income payments for Disability Compensation range from a low of about $130 a month to a high of about $8,000 a month. A veteran cannot receive Pension and Disability Compensation at the same time and a choice must be made which benefit the veteran wants to receive.
Special benefits like grants for new automobiles, modifying existing automobiles, constructing new homes, modifying existing homes, clothing allowances and so on are payable for severe service-connected disabilities. An aid and attendance or housebound assistance allowance in the form of Special Monthly Compensation is available to a veteran who is 100% disabled.
If the veteran receiving Disability Compensation is not 100% disabled, the need for aid and attendance might possibly allow an additional assistance allowance for that aid and attendance. Also, an aid and attendance assistance allowance may be available due to the need for services to a disabled spouse of a veteran where the veteran is 30% or more disabled. It is not common knowledge these additional allowances are available and VA does not normally notify people of their existence.
Of particular note for Disability Compensation are Agent Orange claims for veterans stationed in Vietnam and who have developed presumptive health conditions such as certain forms of cancer, type II diabetes, ischemic heart disease (lack of proper blood flow to the heart) and Parkinson’s disease. Similarly for Gulf War veterans, presumptive health conditions qualifying a veteran for Disability Compensation include: 1) certain unexplained illnesses, such as chronic fatigue syndrome, fibromyalgia, functional gastrointestinal disorders and other undiagnosed illnesses, commonly called Gulf War Syndrome; 2) certain infectious diseases such as malaria and West Nile virus; and 3) ALS.
Veterans with service-connected hearing loss can also make claims and receive free hearing aids. This hearing disability rating will also get them into the VA health care system. For more information about these veterans benefits please see www.seniorvets.org.
No Fee Allowed to Help File a VA Benefit Claim. Generally, under Federal statute, no individual or organization may charge a fee for help with filing an initial claim for VA benefits. I have seen various financial arrangements for filing claims that are disguised fees in one way or another. There are attorneys who charge substantial fees for a will or other estate plan and throw in the VA claim at no charge or have the VA claim completed by an affiliated “non-profit” organization for “free”. There are annuity peddlers who sell high commission annuities and do not charge separately to prepare the VA claim. There are outfits that are charging a fee, but require that it be paid by someone other than the veteran.
It is reported that VA General Counsel treats all these financial arrangements similarly. As a general rule, anyone who would directly benefit financially from helping a veteran file a claim, whether a direct fee is charged or not, is in essence charging a fee, and violating Federal law.
Be wary of outfits with names that sound like legitimate veterans organizations. Oftentimes these organizations were just set up to lure veterans to use their services, for a fee. Work only with VA accredited individuals.
For help with veterans benefits claims, it is oftentimes best to start with your local county veterans office. In St. Clair County, it is the St. Clair County Department of Veterans Affairs in Port Huron at 810-989-6945. They can either assist you themselves or refer you to accredited Veterans Service Officers from legitimate veterans organizations, such as the VFW or DAV. Protect yourself and your veterans’ benefits.
By: Matthew M. Wallace, CPA, JD
Published edited April 14, 2013 in The Times Herald newspaper, Port Huron, Michigan as: Understanding benefits is crucial for senior vets