Aid and Attendance: Exploring an Under-Used VA Benefit
Aid and Attendance: An Under-Used Veteran’s Benefit
Do you know about the special Veterans Affairs (“VA") pension benefit that pays up to $32,985 of tax-free income annually to senior wartime veterans and their spouses?  If not, you’re not alone. Commonly referred to as “Aid and Attendance," the proper name of this VA benefit is the Improved Pension with an Aid and Attendance Allowance. Sadly, only about one in four eligible veterans receive Aid and Attendance. 
Aid and Attendance is special for three reasons. First, it’s one of only two VA benefit programs that helps veterans and their spouses age in place at home as they journey through the elder care continuum. Second, it’s a tax-free monetary benefit that is paid directly to wartime veterans and their surviving spouses, whether they live at home, in an assisted living facility, or a nursing home. Third, it’s not dependent on the veteran having a service connected disability.
Below is a chart showing the Aid and Attendance pension amounts.
Type of Applicant
for Aid and Attendance
Pension Benefit Amount 
(column 2 amount divided by 12)
Two veterans married to each other
Married veteran or single veteran with a dependent child
Surviving spouse of veteran
Who is Eligible for Aid and Attendance?
Only wartime veterans and their eligible family members are entitled to receive Aid and Attendance. An ideal candidate is a WWII or Korean War veteran who lives at home or in an assisted living facility and suffers from a chronic illness, such as Parkinson’s disease or Dementia. The widow(er) and dependent child of a wartime veteran may also qualify for Aid and Attendance, although they would be entitled to a lesser benefit amount.
The following three tests must be met in order to qualify for Aid and Attendance: 
Military Service. The veteran must have (i) received a discharge from service that is other than dishonorable and (ii) served at least 90 days of active duty with at least one day being during a wartime period.
Age/Disability. The veteran or surviving spouse needs to be (i) age 65 or older, or permanently and totally disabled and (ii) blind or nearly so; bedridden; live in a nursing home; physically or mentally incapacitated and require care or assistance on a regular basis; or need help with two or more of the six activities of daily living (i.e., bathing, dressing, transferring from bed or chair, walking, eating and toilet use).
Financial Need. The veteran or surviving spouse must have limited income and net worth. The income must be less than the amount set by Congress. Generally, the veteran and surviving spouse will qualify for the maximum pension amount if their total unreimbursed medical expenses exceed their gross income. The cost of an assisted living facility may be deducted as a medical expense under certain situations, making the income test easier to satisfy.
Insofar as net worth, the veteran (and his or her spouse, if married) or surviving spouse generally must have less than $80,000 of countable assets. While a home and vehicle are not countable, most all other assets are, including IRAs. This $80,000 benchmark significantly declines as the veteran or surviving spouse ages, because life expectancy is a considered factor. For example, a 92-year old veteran’s net worth will likely need to be between $14,000 and $29,000 to qualify for Aid and Attendance.
How to Apply for Aid and Attendance
To apply, veterans and their surviving spouses need to complete and file VA Form 21-527EZ or Form 21-534, respectively, with their VA regional office. The date the VA receives the application is important, since that date controls when the VA benefit will commence. The VA is currently backlogged with applications and is taking up to 16 months to approve them.
Other Important Matters
CPAs should be aware of four noteworthy matters involving Aid and Attendance. First, the law is likely to change and make it tougher to get Aid and Attendance. Senators Wyden (D-OR) and Burr (R-NC) recently introduced Senate Bill 748, known as the Veterans Pension Protection Act, in response to a 2012 Government Accountability Office Report that recommended strengthening the VA pension program. Congressman Tom Rooney (R-FL) has introduced a similar bill. Both bills call for establishing a 3-year look back and creating a penalty period for assets transferred within the 3-year period.
Second, the AARP has warned about scams by “veteran advocate" advisors presenting seminars on Aid and Attendance.  These unscrupulous advisors pitch financial products and earn lucrative commissions under the guise of helping veterans and their widow(er)s qualify for VA benefits. Unfortunately, these financial products often cause serious problems when veterans and their widow(er)s need to liquidate the investment or go into a nursing home.
Third, repositioning assets to qualify for Aid and Attendance can jeopardize Medicaid qualification for veterans and their surviving spouses if they need to go into a nursing home. Medicaid requires applicants to disclose what they have done with their assets over the prior five years, known as the look back period.  Any non-exempt transfer would preclude veterans and their surviving spouses from qualifying for Medicaid benefits for a period of time.
Lastly, only attorneys, claims agents, or Veteran Service Organization representatives who are accredited by the VA are permitted to assist veterans with their application for Aid and Attendance. You can verify if an individual is accredited by visiting the VA website at http://www.va.gov/ogc/apps/accreditation. CPAs may want to recommend that their veteran clients talk with an accredited individual before they file their Aid and Allowance application.
Kevin Pillion, CPA is a VA-accredited attorney and the founder of Life Planning Law Firm, P.A. in Sarasota, Florida. He helps seniors find, get and pay for long-term care. Mr. Pillion is a member of the FICPA and former chair of the FIPCA’s CPA Elder Planning & Support Services Committee. He is also a member of the Veterans Benefit Committee of The Florida Bar and the American Academy of Estate Planning Attorneys.
 See The Veterans Benefit Act, 38 U.S.C. §1521 (2012 & Supp. 2013).
 See Leslie Tamura, More veterans and spouses could gain from Aid and Attendance pension benefit, WASH. POST, Apr. 18, 2011, http://articles.washingtonpost.com/2011-04-18/national/35231125_1_aid-and-attendance-wartime-veterans-veterans-and-spouses. Of the 9.6 million veterans who are age 65 or older and living, less than 300,546 are receiving Aid and Attendance. National Center for Veterans Analysis and Statistics, VA Benefits and Health Care Utilization (April 17, 2013), http://va.gov/vetdata/docs/Quickfacts/Spring_13_sharepoint.pdf.
 U.S. Dept. of Veterans Affairs, Veterans Pension Rate Table (Dec. 1, 2012), available at http://benefits.va.gov/PENSIONANDFIDUCIARY/pension/rates_veteran_pen12.asp.
 There are some exceptions to these tests. See Dept. of Veterans Affairs, 38 C.F.R. § 3.12–.16 (2013).
 See Thom Stoddert, Scam Targets Washington Veterans, AARP (Mar. 30, 2012), http://aarp.org/money/scams-fraud/info-03-2012/scam-targets-vets-wa1889.html.
 Actually, in Florida, the five-year look back period is being phased-in through January 2015. Beginning in January 2103, the look back period is 37 months, and for each month thereafter, one additional month is added, until the 60 month mark is reached in January 2015.