For A&A purposes would the house my dad owns be counted as an asset if rented?

Discussion in 'Veteran Application' started by LABurr, Feb 25, 2016.

  1. LABurr

    LABurr Newbie

    My 80 year old father lives in a different state where he owns the home he has lived in for the past 40 years. He has dementia and is now in need of 24 hour care. The small house next door to me is handicapped accessible and is available for rent. If my father rents this house, my sister will quit her job and become his full time caregiver. We could then apply for the Aid and Attendance pension, as he appears to qualify.

    The issue is what to do with the house he owns. The home has a value of 120k, but needs extensive repairs and updating in order to sell it. This could take several months, plus it is out of state which makes it difficult for family to deal with. Making the repairs, listing and selling the house in a depressed market, and then transferring the assets, could potentially prolong applying for A&A up to a year or more. On the other hand, we could make minimal repairs and rent the house. This could be done quickly and would help pay the rent on the new house.

    For A&A purposes would the house he owns be counted as an asset if he doesn’t live in it and he gets income from renting it? It makes sense that it would, but we want to make sure. I contacted an elder care attorney and he said regardless of what he does with it, moving out of the house he owns and establishing residency elsewhere makes it an asset for A&A, but not for Medicaid, which he does not qualify for.

    Thanks in advance for any help on this!
     
  2. Kaylin

    Kaylin Hero Member Staff Member

    LABurr,

    For the Aid and Attendance benefit purposes, if your father is getting any sort of income from renting the house you would have to report this to the VA and it could impact his application. It's hard to say, not knowing how much in other assets your father has currently and what he would be paying your sister for care, but it could have an impact. Basically anything you would report as income to the IRS would be reported as income to the VA for filing for this benefit.

    The VA does not count 1 house owned by the veteran or spouse as an asset. One house and one vehicle are excluded.

    Also, if your father is going to start paying your sister for care, make sure he is doing it in check form. It cannot be cash. In order to show he is paying for care when applying for A&A. That way you would have bank statements as evidence of the check payments.
     
  3. LABurr

    LABurr Newbie

    Thanks for your quick response!

    Not sure if renting is the right option, but we are trying to look at all possibilities. We knew my dad would have to claim his rental income, which after taxes and insurance, etc. would be minimal. I don’t believe it would have a large impact on his ability to qualify for A&A, and it would allow him to apply for A&A sooner than later. We were just concerned that the house would be considered investment property instead of the 1 allowable house he can own and not count. If he has to count it, its 120k value would put him well over the asset limits. He would rather let it sit vacant then risk that.

    My dad will definitely pay my sister with a check so we can provide proof on the application.

    Thanks again and I am sure I will have many more questions during this process. Glad to have found this forum!
     
  4. Kaylin

    Kaylin Hero Member Staff Member

    LABurr,

    You are most welcome! We are always here to help
     

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