Massachusetts Estate Planning & Asset Protection Blog

VA is Proposing a 3 Year Look Back Together with a Penalty of Up To 10 Years

Posted by Dennis Sullivan & Associates on Mon, Feb 23, 2015

VA is Proposing a 3 Year Look Back Together with a Penalty of Up To 10 Years | Massachusetts Elder Law Attorney



On January 23, 2015, the VA took the initiative in proposing new regulations that would hit wartime veterans and their spouses with a penalty of up to 10 years for making gifts, if they wish to qualify for the VA’s Aid and Attendance program.

As readers of this blog know, the Aid and Attendance program is a non-service connected pension can provide as much as $2,120 per month in tax free income to help pay the cost of long term care.  This program is means tested with an asset limit of about $80,000.  Currently, there is no look back period like Medicaid has, so that transfers for less than fair value to individuals or trusts do not result in a waiting or penalty period for benefits.

Federal legislators have introduced two bills since 2012 seeking to impose a 3 year look back. Neither bill has managed to pass both houses of Congress yet though. The VA however, is sick of waiting and is trying to take matters into its own hands.  They have proposed a penalty of up to 10 years that would result from uncompensated transfers. The penalty itself would be calculated by dividing the amount of the transfer by the claimant’s pension rate. 

Other changes include a net worth standard of $119,220 including annual income. In other words, an applicant would need to have no more than $119,220 in assets and annual income combined in order to qualify.  The higher the applicant’s income, the lower the amount of assets they can keep.

Under the proposal, expenses related to independent living facilities would not count as care costs.  This would mean that veterans with dementia, or other degenerative diseases who can no longer safely live in their own homes but who don’t yet need assistance with the activities of daily living will not be able to include the cost of that facility in an effort to qualify for the VA benefit. Daily living activities are things like such as bathing, dressing, eating, toileting and transferring. Finally, the applicant’s home will remain an exempt asset towards the net worth limitation only if the lot on which it sits is less than 2 acres.

These changes will dramatically reduce the ability of many veterans to qualify for this important benefit.  The new regulations have been submitted for public comment.  To fight these changes, everyone who cares about veterans must respond no later than March 24, 2015.  You can send your comments through or by mail to Director, Regulation Policy and Management (02REG), Department of Veterans Affairs, 810 Vermont Ave. NW., Room 1068, Washington, DC 20420 or by fax to (202) 273-9026.  Comments should include that they are in response to “RIN 2900-AO73, Net Worth, Asset Transfers and Income Exclusions for Needs-Based Benefits”.


Click here to access our free report on Aid and Attendance Benefits.

At the Estate Planning & Asset Protection Law Center, we provide a unique education and counseling process which includes our unique 19 Point Trust, Estate and Asset Protection Review to help people and their families learn how to protect their home, spouse, life-savings, and legacy for their loved ones, click here for more information. We provide clients with a unique approach so they understand where opportunities exist to eliminate problems now as they implement plans for a protected future.

We encourage you to attend one of our free educational workshops, call 800-964-4295 and register to learn more about what you can do to enhance the security of your spouse, home, life savings and legacy.


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Tags: long term care, Nursing Homes, veterans benefits, Nursing Home, wartime veteran, Veteran, federal, look-back, VA benefits, penalty, 2015

Transferring Assets and Qualifying for Medicaid

Posted by Dennis Sullivan & Associates on Thu, Jun 02, 2011

Nursing home care is very expensive - In Massachusetts, the basic nursing home costs approximately $12,000 per month.  Hopefully, you and your loved ones will never have to worry about that.  However, if it does become a concern for you, your parents, or loved ones, who will pay the nursing home costs?

One way to pay for a nursing home may be Medicaid. It is a federal program for those  who need nursing home care but don't have the funds to pay for it.  Unlike Medicare, Medicaid is essentially a needs-based program, and you have to qualify to receive benefits.   Qualifying for the program can happen with the right planning, and that planning revolves around transferring assets and timing. 

These assets can be money, real estate, IRAs, etc., and they can be transferred to another person or to a trust.  The issue is when the transfer occurred.  A transfer at the wrong time or to the wrong person may disqualify your loved one from getting the help they need.

To qualify for Medicaid, a look-back period is applied.  In 2005 the DRA (Deficit Reduction Act) changed the look-back period from 3 years to 5 years.  This means that when you apply for Medicaid, you must disclose the amount of your assets and when you made any asset transfers. Medicaid can question any transfer within the look-back period.

Asset transfers during the look-back period trigger an ineligibility period. The length of the ineligibility period is calculated by dividing the amount transferred by the average monthly cost of nursing home care in your area.  For example, if you transferred $240,000 at some point during the 5 years (look-back period), and the average cost of nursing home cost in your area is $12,000 per month, your ineligibility period is 20 months. The period begins to run on the date you apply for Medicaid.  Therefore you would not be eligible for Medicaid until the 20 months were up, and so you or your family would have to pay those expenses out of pocket.

Obviously, the best situation is when an elderly person is able to transfer his/her assets and be able to stay out of a nursing home until the look-back period expires.

These rules can be confusing and can affect the type of care you or your loved one receives. For more information on this topic, watch our video on "Avoiding Nursing Home Poverty." 

To learn more and to be able to ask questions on this topic, register online to attend one of our Trust, Estate & Asset Protection workshops. 



Tags: Nursing Home Costs, Medicaid, look-back

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