90 year old dad, Korean vet

Discussion in 'Eligibility Questions' started by Norma, Mar 20, 2018.

  1. Norma

    Norma Newbie

    Korean vet, former TWA Captain
    Dad is homebound, legally blind, wears hearing aid, permanent catheter and is confined pretty much to his recliner. Great sense of humor and positive attitude.
    Has a wife but she doesn't do much to care for him.
    His goal is to stay in the house and die in the house. Trying to make that possible.
    Since September 2017, we have a great live in caregiver for him, that costs $750 a week or $3250 a month on average. The contract we drew up states that "Ron" is for my dads care only. Ron is paid for 5 days work. On the weekends, a Caregiving service fills in (not spending the night) with two visits a day, costing $650 a month.
    Elder attorney is working on the Aid and Attendance paperwork, but I feel they are missing some of the medical expenses. They have advised me they feel my dad will NOT qualify right now because his income is too much. (it's the IRA)
    They feel he needs to spend down his IRA (which could be easy to do by paying his live in caregiver more, which he deserves) and then file. They also said if they file now and my dad is denied, the VA states we HAVE to wait a full year to reapply.

    * Monthly Income is based on SS for my dad and his wife, TWA pension = $4230. (IRA distributions not included in this. In 2017 he took $38,000 from his IRA)
    * Monthly Medical Expenses (which includes the caregiver amounts) = $4609 a month. (I noticed things such as co-pays for medications, dental visits, hearing aids and batteries, medical deductibles, wheelchair, wheelchair ramp, and a recent hospital stay are not included in this amount)

    My dad has an IRA and the balance is $53,000. (see above he took out $38,000 from his IRA in 2017)

    If you add his IRA distributions to his monthly income, that = $7396
    His monthly med expenses are $4609

    Clearly, he wouldn't qualify for the A&A now, but once he spends down his IRA he will, won't he? Can he gift any of his IRA to lower his IRA balance?
    Of course, paying his live in caregiver more would "up" his expenses and spend down his IRA quicker but I'm not sure about this strategy.

    Any suggestions? Should the elder attorney file now? Or wait?

    You may ask, why is an elder attorney filing this when I could do this? Well, my dads wife wouldn't give me access to their checking accounts to find medical expenses. I believe she has been funneling money to her adult children. My dad defends her, so to keep the peace, I backed off.

    Thank you so much for any advice.

  2. VA Legal Team

    VA Legal Team Full Member

    Hi Norma:

    First, if Dad is denied he does not need to wait one year to reapply. Second, unless the $38,000 from the IRA was Dad's required minimum distribution (RMD), then his 2017 income is not necessarily the same as his expected income for the next 12 months. Generally, the VA wants you to report the RMD from an IRA.

    You didn't mention other net worth (bank accounts your dad and his wife might have, etc...). But if the only asset is the IRA, Dad could be eligible for A&A right now depending on the RMD for 2018.

    Regarding the gifting, transferring asset before submitting the application is a strategy many people use to qualify for VA benefits. Keep in mind, though, that the VA communicates with the IRA and you may need to prove to the VA when the money was transferred and when the income stopped.

    However, to be clear, I don't know all the facts and you shouldn't rely on what I just wrote to make a decision (that is why you hired an elder attorney).

    Good luck.
  3. Norma

    Norma Newbie

    thank you for your reply.

    I didn't think we had to wait a whole year to reapply if he was denied the first time. (the elder attorney is wrong on this)

    And I did not know the VA was wanting the RMD of the IRA and NOT what is actually taken out....this will change the formula, possibly not in favor of my dad. (I think)

    If you'll look up in my post you'll see I stated other income my dad is receiving in addition to his IRA. My dad and his wife get Social Security and his pension. Is that what you mean by income? They do have bank accounts, but these are accounts that the SS and pension are deposited into.

    Also, aren't co-pays for Dr. visits, ER visits, prescriptions etc counted? The attorney just told me no, since they are not a reoccurring expense, they cannot be counted. That doesn't seem correct to me.

    Thank you, Norma
  4. VA Legal Team

    VA Legal Team Full Member

    "And I did not know the VA was wanting the RMD of the IRA and NOT what is actually taken out....this will change the formula, possibly not in favor of my dad. (I think)"

    On the application for pension, the VA wants to know expected income for the next 12 months. For MOST people that have IRA's, that means they report the RMD. Sometimes, people think they know they will distribute funds above and beyond the RMD. In those situations, you MIGHT report that amount. However, a lot can happen over the next 12 months where the claimant wouldn't actually distribute those additional funds from the IRA. You can ask your attorney about this, but I would ultimately listen to him/her as you've engaged them for their expertise on VA pension benefits.

    Yes -- SS and pension is gross income that must be reported to the VA.

    The attorney was correct about the co-pays, doc visits, etc...
  5. Norma

    Norma Newbie

    Thank you very much for your timely answer. Are you aware of what the variance should be, between expected income and expected expenses for someone to qualify for A&A? Right now the elder attorney has the expected income at $56,000 a year (which includes the RMD) and expected expenses right at $59,000. His IRA balance is right at $59,000. However, he has been paying his 24 hour health aid $39,000 a year, which has been coming out of the IRA (clearly more than the RMD). Attorney is suggesting to spend down the IRA more before filing, but that makes me really nervous, knowing it takes months to get approval. Thank you very much for answering my questions.
  6. Norma

    Norma Newbie

    Correction: Dad's IRA balance was at $56,000 as of the end of February.

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