VA pension is a program from the veterans administration that provides monthly cash payments to veterans and surviving spouses to pay for long term care. The cash can be used for a variety of long term care, including independent living, assisted living, at home care, and nursing home care. To qualify to receive VA Pension, the veteran and surviving spouse must have a medical need for long term care and meet income and asset levels.
The VA does not provide a bright line standard for the amount of assets a veteran or surviving spouse can retain and qualify for VA Pension. In practice, we have found to be safe the level is under $25,000. There are some assets that do not count towards this limit. These exempt assets include a residence, vehicle, and personal effects. The value of the personal residence is not considered an asset. Even with the residence exempt, care should be taken to ensure the residence does not cause the veteran or surviving spouse to lose VA pension in the future.
Often when the veteran or surviving spouse moves into an assisted or independent living, their residence is rented to bring in extra income. Renting the house makes the residence a countable asset and disqualify the veteran and surviving spouse from receiving VA Pension. A similar result can occur if a residence is sold, as the proceeds from the sale will be considered to be a countable asset. Before the home is rented or sold, it is advisable to transfer the home to a trust. As trust planning can have consequences for VA benefits, tax planning, and qualifying for nursing home Medicaid, it is recommended that the services of an experienced elder law attorney are used.