Tagged Under : accounting professional, Asset Testing, benefits, Daniel Stoica, DD214, declared states of war, Department of Veterans Affairs, discharge paper, DVA Improved Pension, extra income, health care, Improved Pension Benefit, Income Testing, qualifications, separation papers, tax free, tax professional, veterans
Huge effort is being made to make military veterans aware of the improved VA Pension benefit. Even the Governor of Illinois thought it was important enough to get the word out that he created a non-profit that works with other corporations, service groups and individuals to educate veterans and their families about this benefit. There are nearly 22 million veterans in the U.S. and nearly $2 billion dollars in benefits that are unused every year. Most people simply don’t know the benefits are there. They aren’t even aware that they qualify and don’t know how to apply.
The best thing about this benefit is that it gives extra income to veterans and their families when they need it, with health care. Many families care for disabled family members who served in the military. Even still, there are families who have lost nearly everything because they had to pay, out of pocket, for health care.
This benefit was put in place in 1952 and, at the time, long term care wasn’t much of an issue. Families stayed nearby. Children didn’t go across the country to go to college or for their careers. It was a much simpler time. Today, however, families are busy. People move away, children are involved in more activities. Life is more complicated now.
Today, long term care is a real part of life. Family members can’t be relied upon. And, honestly, some of us would rather not have to deal with a family member’s personal care needs.
The extra money from this benefit would be helpful when you need it. No one is going to turn down money, especially when you’ve earned it and it’s yours for the taking. This is why the Improved Pension Benefit is critical.
Qualifications for Veterans & Widows
The first qualification is a discharge from the military for anything EXCEPT dishonourable.
The veteran must also have served no less that 90 days in active duty with one day during a declared state of war. This doesn’t necessarily mean combat, it just means a consecutive 90 days of active service, you were not dishonourably discharged, and it was during wartime. You must also be completely disabled, or at least 65 years of age. These benefits have been around since 1952 and the main reason veterans didn’t utilize it is because they believed they had to be disabled in order to qualify. With this benefit, you simply need to be 65 and old OR disabled, not both.
Declared States of War
The dates of service that are recognised by the Department of Veterans Affairs are included in the “Declared States of War”:
Mexican Border Period 1916-1917
WWI 1917 – 1921
WWII 1941 – 1946
Korean War 1950 – 1955
Vietnam War 1962 – 1975
Gulf War 1990 – . . .
DVA Improved Pension
For a veteran and Spouse, if one of you receives care in a facility, you could get $22,113 per year, TAX FREE.
For a single veteran, it is $18,654/year, or $1554/month, TAX FREE.
For a surviving spouse of a veteran, it’s $11,985/year, or $998/month, TAX FREE.
This benefit is available every year as long as you receive Aid and Attendance in a long term care facility. There is a cost of living adjustment every year that increases your Social Security, usually about 3%.
The government will look at your income and assets. Your out of pocket medical expenses are deductible. If you need more care and assistance, that is a huge expense for many people. It, too, is deducted from you income. The VA looks at your assets as of the date of your application, not before. You have the option of creating an estate plan and changing your assets before you apply.
As an example, a couple earns $2500 each month and everything is going well, then, one day, the husband is in an accident and breaks his hip. Because of his age, he is forced to go to a long term care facility to heal. The cost of his facility care, medications and insurance premiums are $3200 per month. That is $700 more than their income. The money for that extra expense has to come from somewhere, and it’s usually from savings. This poor couple has gone from having a comfortable retirement with more than enough to live on, to losing it all because of one accident. Luckily, the husband was a veteran, which gave him the Improved Pension Benefit and he and his wife qualified for over $1800 per month. It made a world of difference to the both of them and neither one had to worry.
Whatever is owned by you, meaning, what is titled in your name, will be counted as an asset, except for your house and car, as long as it’s your primary residence. You can set things up, before you apply, to where many of your assets are put in a trusted family member’s name. You will not have as many assets and will qualify, but you know you still have access to the things you own. As far as the VA is concerned, what you own at the time of your application is what you have always owned.
Often times, people lose track of their discharge papers. If you cannot find them, you can apply for a certified copy. It takes about 4 weeks to arrive, but you will get them. You will also need a marriage or death certificate for the deceased veteran. These take a little more time to receive from the county or state. These don’t need to be certified copies and you can go to the courthouse to get them, as well.
If you need to rearrange your assets, that will take a bit more time. Start when you apply for your documents so you will have enough time to get your estate planning in order. The first thing the DVA will do once they receive your application is stamp it with the date of receipt, enter it into their system and give it a case number. It could, however, take up to six months for processing, but once it’s approved, the DVA will look at the time stamp and send a retroactive check from the date it was entered into the system.
Talk to an accounting professional in order to get the most up-to-date information on any impact, if any, a benefit might have on your taxes.