IRA RMD, additional IRA withdrawals, and IRS Matching

Discussion in 'Countable Income' started by debralee, Oct 31, 2016.

  1. debralee

    debralee Newbie

    My Mom's monthly expenses for Assisted Living have been exceeding her income for the past year and a half. She has been taking her IRA RMD plus additional monies from the IRA's to cover these expenses. In addition, this year she "rolled over" and consolidated an investment IRA to an existing IRA held as cash. Total IRA balance is currently $21,000. Her annual income (monthly pensions & SS plus RMD) is approx. $32,000 with annual health care expenses (assisted living, Medicare, verified ongoing RX's) is approx. $42,000. So the shortfall is obvious. Mom is almost 89, and the IRA is her only remaining asset.

    So, several questions: since it seems (from other posts on this site)the VA will IRS income match to check for discrepancies, should I include a "statement of claim" to explain 2015 IRA distributions from Tax return, and 2016 distributions? 2016 RMD's have already been withdrawn and spent for care, as well as addn. $$.

    Should I attach copies showing the IRA rollover and withdrawals from this year? Or just the recent monthly statement?

    Form 21-534EZ, Section IX: Expected income. Since it asking for 12 months of expected income from the date of application(assuming Nov 2017), should I just list the RMD for 2017 for her IRA since there will be no more withdrawals this year?

    Want to provide as much information as needed to validate her assets, income and expenses without going overboard and submitting more info than is needed. Maybe I am just overthinking everything....

    This site has been a wealth of information. My thanks to all those who contribute their time and expertise to answer our questions!
  2. Kaylin

    Kaylin Hero Member Staff Member

    I could see how this could get confusing.

    Yes, you could certainly include a Statement in Support of Claim form 21-4138 to use in clarification of the IRA and distributions.

    Anything that you think would be helpful in explaining her current situation of expenses vs. assets/income is what I would include. The recent monthly statement sounds more correct to me.

    Yes, that seems right about the RMD for expected income. You can also explain that on the Statement in Support of Claim

    You're not overthinking things - it can just get complicated when there are different income/assets and expenses than most people have. But that isn't to say she's not eligible and wouldn't be awarded.
  3. debralee

    debralee Newbie

    I have good news to report! Mom was approved for A & A benefit in March. The FDC was received on Jan 3 and the decision letter was dated March 3 . Intent to File was recv. Oct. 17, 2016.
    However the VA response has triggered some questions....

    The benefit effective date is Nov 1, 2016, with payments withheld pending appointment of fiduciary for effective date Nov 1, 2016; Dec 1, 2016; and February 1, 2017. Would there be any reason the Jan 1, 2017 payment would be missing from the VA award document? The payment for March 1, 2017 was released and was deposited to Mom's account on March 31, 2017. YEA!

    The benefit amount approved is reduced as the IRS matching did include the full amount of IRA distributions for tax year 2015 and used in calculating her income going forward. What I included on Statement in Support of claim to explain the use of IRA funds over RMD amount to pay for medical care shows recv. as evidence by the VA, but was not acknowledged. Would it be beneficial to try and explain again in more detail and provide bank statements/receipts for past care and explain the IRA distributions are not sustainable nor regular monthly income?

    I understand I can submit family medical expenses paid AFTER the Intent to file was received. As her ALF fee increased in January 2017, do I submit on the Medical Expense Report, or submit an updated Assisted Living Status Statement? I am assuming I can also include Rx's, medical supplies, etc. that were not included in the original application as amounts varied by month. When is best to submit, and can multiple submissions be made? The date noted to return the medical expense Report is "no later than December 31, 2018". I would certainly like to submit prior to NEXT December for earlier evaluation to reduce income and obtain potential award adjustment for the prior months.

    Already sent in a Statement in Support of Claim regarding appointment of myself as fiduciary. Just waiting to hear back from the VA. It is now almost 30 days- time to give them a call? Written correspondence regarding Fiduciary went to Salt Lake Fiduciary Hub.

    Thanks to all who contribute and answer on this website. It has been a great help as I have navigated thru this process.
    Kaylin likes this.
  4. Kaylin

    Kaylin Hero Member Staff Member

    Congratulations! Always happy to hear this news!

    That is strange that they didn't include the Jan. 2017 month in the letter for the fiduciary money...could be a mistype? If you're really curious you could always call them and ask. If you do - please come back and let us know.

    As far as the IRA distributions, this is totally up to you. It can't hurt to try and re-explain and submit more evidence as to why the benefit amount should be different than what the VA awarded your mother. Be sure to mail everything return receipt and keep a copy of everything for yourself!

    You can submit a Statement in Support of Claim form 21-4138 explaining the expense increase. As well as the medical expense report and bank statement that show the increase in monthly care expenses - that is what I recommend. An updated ALF statement can't hurt! The thing to keep in mind with Rx's and medical supplies is are they ongoing expenses? The Rx's might be, but are the medical supplies? I have heard some people get their Rx's counted as ongoing medical expenses and others do not and I'm not sure why.

    Did you waive the 60 waiting period on the fiduciary paperwork? If so then you may want to give them a call after one month if you haven't heard anything confirming.
  5. debralee

    debralee Newbie

    Thanks Kaylin-
    I did submit to waive the 60 day waiting period. Checking via phone call shows the form 21-4138 was received, but they have not made a decision yet, and it is now about 45 days. The (withheld) January 2017 does show in their system, so the notification letter was just not complete.
    Working on compiling details to explain the IRA has been used to cover medical bills in 2015 and 2016-cancelled checks, a spreadsheet... Will see what happens and keep you updated.
    Kaylin likes this.
  6. Kaylin

    Kaylin Hero Member Staff Member

    Please do!

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