question about whether a house my Mom owns will disqualify her

Discussion in 'Selling of Home' started by SusanW, Nov 5, 2015.

  1. SusanW

    SusanW Newbie

    I've been reading here for a few weeks while I have been gathering information to submit for A&A for my mom. She is 70 and a widow of a WWII vet. She has dementia and lives in a continuing care community. Her expenses are $500+ above what her income is every month. Her cash reserves are depleted (<$2000 left) and we are getting ready to sell a house she owns (it's fully paid for) that is worth about $150-175K. I have all the paperwork I need for the VA, except I don't have the letter from her community in hand (all I have to do is go pick it up). When we sell the house, her only source of income will be Social Security. Until then she also gets $800/month in rent. Once it is sold, her monthly expenses will exceed her income by $1300+. As I said, she is only 70 and could conceivably live another 20 years. If we get $150K for the house, and her cost of living never increased, the money would be gone in 10 years. (edited to add her "countable" income right now while she still gets rent from the house is -$6100)

    Is it likely she would qualify now, or not until the house proceeds have been spent down? She also has long term care insurance, but hasn't qualified to draw on that yet. Does the LTC insurance affect A&A at all?

    Thank you in advance. I have so much respect for what you do here, providing an amazingly helpful service.

    Susan
     
  2. Kaylin

    Kaylin Hero Member Staff Member

    SusanW,

    If the house sells, will this money be going to your mother? If that is the case, once the house sells then it would most likely make her ineligible for Aid and Attendance because she would be drawing money from her $150k from the income she received from selling the house and this puts her far above the $80k asset limit for receiving the benefit.

    If she were to apply for the Aid and Attendance and receive the benefit now because she qualifies, the proceeds from the home would have to be reported to the VA, and it would kick her out of the pension until she spent down to a threshold making her eligible again.

    I hope this helps!
     
  3. SusanW

    SusanW Newbie

    So I am going to be seeking advice both from our financial planner (have an appointment Monday) and our estate attorney. Is there any way that makes sense legally and ethically to put some of the money from the sale of the house into an account that is dedicated to her care but not in her name? It's clear to me that she is going to outlive her financial resources and is going to need to use both her long term care insurance and the A&A benefit to pay for her ongoing care in the community where she lives.

    If the money from the house sale is going to be in her name, how long should I wait to apply for A&A? Knowing it will take several months to work its way through the system, do I apply before she is quite down to $80K or wait until she has only $80K left and then apply?
     
  4. vetadmin

    vetadmin Administrator Staff Member

    What Kaylin has said is true, but what you also need to be aware of is her LTC policy. That gives a flat fee that is covered for every day, and ONLY any money that is owed on top of the LTC that it does not cover, is what she could claim as out of pocket expenses. This fact alone is the bigger hurdle that will prevent her from showing a financial need for this pension.

    If the house sells, that income counts, and while it is being rented, that income counts.

    Be careful in what is advised to do with her proceeds from the sale.

    Your better bet is to wait until she actually qualifies financially. The VA is looking to impose a 3-year lookback with substantial penalties for those that are found to have restructured finances for the purpose of qualifying, so again, be very, very careful in what you decide to do.
     
  5. SusanW

    SusanW Newbie

    Re: question about whether a house my Mom owns...

    The attorney said talk to the financial planner. The financial planner said keep the money in my mom's name, so there is no restructuring going on.

    New info: renters are moving out in Dec. so she has already received her final rent payment. Will be speaking with a realtor ASAP. Without the rent coming in, my sister and I will have to help cover her expenses until the house sells.

    I need to redo the page of the VA form that covers financial info, and remove the part that says she receives monthly rent.

    For the spend down, I suppose I should have Mom start paying for the things I have been paying on her behalf, such as her cell phone and the cellular plan for her iPad? So if those are part of *my* regular monthly bill from AT&T (I pay for myself, her, and my two kids cells), how should I document the payment to myself from her account? My sister won't question it, but will the government?
     
  6. vetadmin

    vetadmin Administrator Staff Member

    Susan,

    Those phone bills/ipad are not allowable expenses, so it really doesn't matter.

    The VA is looking at her income, assets, and what she spends on care. You would want to remove the income from the renters, but once the house sells, you will have to update the VA, and again depending on the proceeds, she may be kicked out of the pension due to excessive funds.
     
  7. SusanW

    SusanW Newbie

    I know she may not qualify once the house sells, but just in case she does, I think I want to go ahead and apply. Being disqualified initially doesn't stack the deck against her in the future, right? And is there a place on the financial page of the form where I declare that she has Long Term Care insurance? I didn't see it.

    So once I talk with the realtor I will either go ahead and send in the application (is it better to mail or to deliver to my local office? I've spoken with the lady there.) or wait for the house to sell if the realtor thinks it will be quick.

    What I was saying about the phone/iPad costs is that if we are trying to spend down, I should probably not be paying for any of her things out of my own pocket. Yes?

    Thanks again so much. It's good to not feel alone.
     
  8. vetadmin

    vetadmin Administrator Staff Member

    Susan,

    Applying now and getting denied doesn't work against her in the future, but again with her LTC and the proceeds from the house, I think you are climbing an uphill battle right now.

    What is the rate of her LTC policy for a daily amount?

    As an example, if her ALF cost is $120.00 a day, and the policy pays $110.00, then she is only out $10.00 a day, $300 short for the month for the policy to cover. With the house and such a small amount not covered, and then factor in her monthly income, which is probably more than the $300.00 shortfall from the policy, she is going to have an incredibly difficult time showing a "financial need" for the pension.

    Yes, she should be paying her own bills, but don't think phone bills are going to go a long way in her spending down.
     

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