There are two different veterans benefits programs that provide tax-free income to veterans or their widow(er)s. Each of those programs can include a supplemental payment called Aid and Attendance. The question is, which one is your client eligible for and why does it matter?
When veterans have been injured while serving on active duty or have a resulting injury or disease because of their service (i.e. exposure to agent orange, post-traumatic stress disorder), they may be paid “compensation” for their loss. This is similar to payments in the private sector under Worker’s Compensation. The payment is determined based on the rating the veteran is awarded, which will be from 0% to 100% in increments of 10. The higher the rating, the more money the veteran receives. If the veteran has a rating of 100% or has been determined to be unemployable due to the service-connected injury, the veteran may receive additional income from the VA if the veteran is in need of regular assistance with activities of daily living (dressing, bathing, toileting, transferring, and eating). The additional money is called Special Monthly Compensation for Aid and Attendance. This is available to widows of veterans who are receiving, or could be eligible to receive, Death Indemnity Compensation (DIC).
Veterans who do not have service-connected disabilities may also receive tax-free income from the VA if they meet certain military, disability, and financial criteria. If the veteran served at least 90 days on active duty, one day of which came during a wartime period, and received a discharge greater than dishonorable, then the veteran is considered a “veteran” for the Improved Pension Program. In addition to the military requirements, the veteran must be disabled to receive Improved Pension, but the disability is due to factors not related to military service (i.e. a car accident, stroke, Alzheimer’s Disease, age). The VA defines “disabled” as being age 65 or above. Lastly, the veteran’s income and assets (to exclude a home, vehicles and personal property) must be under certain limits. Assuming the veteran qualifies under all standards, the VA will grant the veteran a monthly amount to bring the veteran’s income up to the VA’s definition of the poverty level (i.e. $12,652 per year for a single veteran or $16,569 for a veteran with one dependent, like a spouse). If the veteran needs the regular assistance of another person to help with activities of daily living, then the veteran can receive the Special Monthly Pension with Aid and Attendance, to increase the monthly amount paid by the VA (i.e. $21,107 per year for a single veteran and $25,022 for a veteran with one dependent). This benefit is available to widows of veterans as well, but the annual amounts payable are less.
When a client contacts you seeking the Aid and Attendance program, always ask if the client is receiving VA benefits for a service-connected disability. If so, and if the rating is 100%, unemployable, or the need for aid and attendance is related to the service-connected injury, then the veteran should seek aid and attendance under the service-connected compensation program. The payment will be higher than that of the Improved Pension program. Moreover, there are no income or asset limitations under the service-connected compensation program, which is usually the limiting factor of non-service-connected wartime veterans from being eligible for the Improved Pension with Aid and Attendance.
The Compensation and Improved Pension Programs are mutually exclusive. The claimant must choose one program or the other, or submit a claim for both and let the VA decide which would be more advantageous for the claimant. As the attorney, you can assist in speeding up the claims process by guiding the client in knowing which program would be best based on type of disability (service-connected or not), level of disability (100% or less), and income and asset levels.
The key to remember is that, whether the veteran or widow is eligible for either compensation or pension, both programs have a supplemental income benefit called Aid and Attendance. The claimant would decide under which program to apply for the supplemental payment.
Attorneys cannot charge to assist with a service-connected claim to increase benefits that would include aid and attendance because there has, presumably, been no adverse action. However, for pension claims, attorneys may assist and charge for fees related to estate planning and asset preservation that, by a result, creates financial eligibility for the Improved Pension Program. The lawyer cannot, however, charge to assist with preparation, presentation or prosecution of the application for benefits.
For more information on the VA Improved Pension Program, visit www.va.gov.
Victoria L. Collier is a Veteran and Certified Elder Law Attorney, Fellow of the National Academy of Elder Law Attorneys, Co-Founder of Lawyers With Purpose LLC, and author of “47 Secret Veterans’ Benefits for Seniors—Benefits You Have Earned … but Don’t Know About.”
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