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As a general rule, cash-equivalent, household assets cannot exceed $80,000 for a married couple, or $40,000 for a single person. But there is no specific test in the regulations. Veterans Service Representatives in the regional office are required to file paperwork justifying their decision if they allow assets greater than $40,000/ $80,000. Thus this amount has become a traditional ceiling. Concerning the asset test, the service representative is encouraged to analyze the veteran's household needs for maintenance and weigh those needs against assets that can be readily converted to cash and whether the income from that cash will cover the difference in the household income and the cost of medical care over the care recipient’s remaining life span. In the end, the decision as to allowable assets is a subjective decision made by a service representative. In certain cases a benefit award could be denied unless assets are below $20,000 or even $10,000. A personal residence, a reasonable amount of land on which it sits, personal property and automobiles for personal use are exempted from the asset test. Assets can be gifted to someone who does not live in the household or a portion of assets can be converted into income through an immediate income annuity. Care must be taken not to create so much income as to reduce the available pension income benefit. Currently, there is no penalty from VA to rearrange assets in this manner as there is with Medicaid. Once the assets have been rearranged or reallocated, the veteran household can apply for the benefit. The law firm Hanlon Niemann is eager to work with veteran households to help them rearrange assets, to set up legal work for transfers and to help with other estate planning needs in order to qualify a veteran household for a pension benefit. It is also extremely important that if assets have been moved or otherwise rearranged, a competent Medicaid planning practitioner should be involved. It is very likely that the veteran or the spouse may end up in a nursing home or end up paying more for care than the current income and veteran benefit combined. Nursing homes are very expensive and the individual's income and the veterans benefit rarely pay for the cost of a nursing home. This means the beneficiary may have to rely on Medicaid to cover the deficit. Assets reallocated to qualify for VA benefits could create penalties for Medicaid eligibility. It is vital that the possibility of needing Medicaid should be planned for.
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