Would my father pass the asset test?

Discussion in 'Countable Income' started by Patty_N, Sep 1, 2015.

  1. Patty_N

    Patty_N Newbie

    My 90 yr old father is a WW2 vet who lives at home with my 87 yr old mother. He now needs 24/7 care. Their monthly income is $3850 and their medical expenses are $4855. So they are going in the hole $995 on medical alone, not to mention normal living expenses. They have about $151,000 in assets, but the vast majority is in IRA's (140K). We've been told we need to reduce their assets to $80K by gifting money to children (they have 7). But that would mean a HUGE tax burden, since we'd have to withdraw out of their IRA. So my questions:
    1. Would he qualify as his assets are now
    2. If we apply and he gets denied, then can we reduce the assets and reapply?
    3. If we re-apply, is the effective date the date of the first or second application?

    Thanks for any help!
  2. vetadmin

    vetadmin Administrator Staff Member


    I am curious as to who told you to reduce their assets.

    Normal living expenses would not be considered an "allowable" medical deduction so you cannot count those expenses.

    You do not state whether they are in facility care, or services coming in that accounts for the $4855.

    The VA is currently looking at invoking a 3-year look back. If this goes into effect, it could cause some serious financial problems for your folks down the road. We do not recommend restructuring assets for the sole purpose of qualifying financially.

    If you apply and are denied, and then were to reapply down the road, it would not be retro to the date of the first application. It would based off the new application.
  3. Patty_N

    Patty_N Newbie

    We met with three different elder care lawyers, who all told us that they could qualify if they reduced their assets. Some suggestions included putting money into a trust, setting up an annuity, or gifting to their children.

    My dad lives at home and has 24/7 care because he can no longer walk, bathe, etc without assistance.
  4. vetadmin

    vetadmin Administrator Staff Member


    The attorneys would get paid a nice amount for writing that irrevocable trust, which is the only way it could be written where he does not have access to it.

    I can't caution you enough as to how this could come back and be a very unfortunate situation for your Dad.

    We do not make suggestions on restructuring assets in order to qualify, as that is not the intention of this VA benefit. It is intended for those who cannot afford care without the assist of the pension.

    On a positive note, your Dad is fortunate to be able to actually afford his care, and it may be a matter of waiting until he spends down and would financially qualify for the benefit.

    Keep in mind that the 80K is a baseline and is not written in stone. Folks who have more than that, can qualify for this pension, so I am a bit concerned on their recommendations to you.
  5. I just want to thank you for this incredible site. I've been reading through everything I could today, and have learned so much from the Admin and others who have been down this road. This particular question is closely aligned with my own situation. I've also had an estate attorney recommend restructuring my mom's assets in an irrevocable trust. Yes, his fee would have been hefty and her tax burden ridiculous. That was 1.5 years ago, and I'm still being invited to attend his 'workshops' on this great idea. The bottom line is that my mom would be giving money to a lawyer and money to the IRS that she could be living on, so we opted out of this restructuring idea.

    Now, my mom is close to being at the $80K number, and may hit it before the end of the year at the rate she is currently spending on her ALF and other medical expenses. I am about to start this long and tedious process, expecting that the VA will require a fiduciary given her dementia.

    Thank you again for this wonderful and informative site!
  6. vetadmin

    vetadmin Administrator Staff Member

    Blue Butterfly,

    Thank you for your very kind words, and I am glad that the site and forums are helpful to you.

    You made the right decision to not go the path of the Attorney, so that is a huge plus.

    What you need to look at now is Mom's current expenses for care, and her age.

    It may be that she is still over income depending on what her monthly income is versus what her shortfall is in paying for her care.

    If you look here on the forums under the "Tips and Resource" tab for the "Countable Income" worksheet, that should help to give give a better understanding of where she stands for VA purposes.
  7. Kaylin

    Kaylin Hero Member Staff Member

    Blue Butterfly,

    Your words are so kind, thank you for your shoutout to VeteranAid.org!

    I wanted to link directly to the Countable Income sheet that Debbie mentioned in her response if you have trouble finding it. It is located here:

    Best of luck in your application process and please feel free to ask any questions you may have along the way.
  8. mwagne

    mwagne Newbie

    Re: Would my father pass the income test?

    Wow! This site is an answer to prayer. My dad was just diagnosed with dementia, his drivers license was revoked, and we are lining up home health care for both my mom & dad. He has a negative net worth and his expenses are now in excess of his income largely due to credit card debt incurred due to his dementia before I caught it.

    I don't know how much home care will cost since they just agreed to be covered. Since his pension and social exceed the guidelines will he qualify for aid? Any helpful insight would be much appreciated.
  9. vetadmin

    vetadmin Administrator Staff Member


    It's more of what they are paying for the care service coming in that will offset their monthly income. By doing so, you back out allowable expenses, then the VA is looking at what they call "countable income" The credit card debt is not going to be allowed, Stay focused on what they are paying for care.

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