VA Needs-Based Benefits Eligibility Has Officially Changed

Authored By: Kendra R. Rozboril

The Department of Veteran Affairs (VA) has been hinting for some time that the eligibility rules for needs-based benefits must change. VA Estate Planners across the nation have been waiting with bated breath to see how these changes will affect our clients. The VA published a notice of proposed rulemaking on January 23, 2015 and kept the ability to make public comments open for the statutory minimum of 60 days. The public comments were closed on March 24, 2015.

On October 18, 2018, new rules regarding eligibility for needs-based VA benefits will go into effect. You can find the 30-page rule change, with comments, in Federal Register Vol. 83, No. 181, 47246 through 47275. The 30 pages that outline the rule change are information dense and address the majority of the over 850 public comments that the VA received. The main takeaway from the rule changes is that VA benefits planning will dramatically change.

Among the many changes, there are three key revisions to consider. First, the new rules have added a “look-back” period. The VA will now look at most all transfers of assets in the three years immediately preceding an application for benefits. Next, the asset test has changed completely. Before the recent changes, the asset test was a vague test, and the test’s application tended to vary based on the specialist assigned to each case. Now, the asset test is focused on one number: The Community Spouse Resource Allowance, as set by the federal rules for Medicaid and adjusted for inflation every year. The third change involves real property. The VA has now added an acreage restriction on the one home exemption. The excluded real property can now only contain up to 2 acres of land. Any acreage over this allowance is now considered a part of the applicant’s assets for purposes of assessing benefits eligibility.

Because of the vast changes in the VA rules, VA benefits planning must be handled with extra care and attention to detail, so as not to disqualify someone from benefits. If you or a loved one served in the military and require needs-based benefits, please call our office today to schedule a consultation.