Eligibility--Annuity

Discussion in 'Countable Income' started by Jandy, Jun 5, 2015.

  1. Jandy

    Jandy Jr. Member

    Hello. My father is a widowed 81 y.o army vet. He will go into an ALF in 1-2 months. I have a question about his eligibility for A&A, especially with respect to his annuity.

    First a snapshot:
    ---I believe the cost of his ALF and other UMEs will be between $2900-3500/mo ( I only know a range right now; I will know more when he actually goes into ALF to see how they classify his needed level of care and corresponding cost).

    ---Dad's income is $2359/mo ($1820 in Social Security and $535 from an annuity). I plan to pay off all debt Dad has (loans, credit card) to free up more money for him.

    --As for assets, he has a modest home and car (both exempt, I understand). He has a half ownership in some land (the other half belongs to his stepchildren via his dead wife's will). This land has a FMV of about $50k, so his interest is worth about $25k (and btw, it's "family land," so his stepchildren won't sell it, making Dad's interest essentially meaningless). He has savings of about $17,500 (mostly from life insurance proceeds) that we will use to make up the shortfall for ALF until we HOPEFULLY get approved for an A&A benefit.

    Now, about that annuity. The most recent valuation (Dec 2014) puts it at about $72k. HOWEVER, I am told it is an irrevocable annuity ("set in stone," as MetLife put it to me). He can't withdraw the full value, but can only get the guaranteed $535/mo.....Will the VA consider this in evaluating Dad's application with respect to the asset test?

    I desperately hope Dad is eligible for the full $1788/mo award. From your reading of my facts, what do you think? Many thanks for your time.
     
  2. vetadmin

    vetadmin Administrator Staff Member

    If it is in an irrevocable trust and he does not have access to the full value, and can only receive the monthly amount, which he does have to claim as income, he should be ok.

    Not sure how the VA will rule on the land.

    You should go to the Tips and Resource tab here on the forums and print off the "Countable Income" formula to help give a better overview of his financial status.

    Yes, the house and car are exempt.

    Be careful about using his savings to pay off his debts as the VA is looking in invoke a 3-year lookback. If you are using those funds then you should square that up as soon as possible.
     
  3. Jandy

    Jandy Jr. Member

    Thank you for your reply! Regarding your last sentence about being careful when using Dad's savings when paying debt. To clarify, we want to use Dad's savings to pay for the shortfall in ALF until he hopefully receives an A&A benefit (his monthly income from SS and his annuity is not enough). You are saying we shouldn't do this? How else to pay the shortfall during the several months wait?

    Or perhaps you were referring to Dad's credit card and loan debt that I mentioned. When I said I plan to pay that off, I meant I want to use my OWN money, not his. If you think that's ok, does it matter if we structure it as a gift OR create paperwork so it is regarded as something he intends to pay me back for (even if he never does)?

    I hope I'm articulating this right. Sorry, I'm new to all this! And btw, this site rocks. Thank you SO much for all you do.... :)
     
  4. vetadmin

    vetadmin Administrator Staff Member

    Yes, you are ok to use his savings to pay the shortfall, so no worries there.

    What you are doing will be fine.

    Good Luck with it all!
     

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