Insights - September 26, 2018

Changes to the VA Rules

New Rules for VA Benefits will Impact Eligibility


The Department of Veteran Affairs (“VA”) has contemplated changing eligibility requirements for need-based benefits like VA Pension with Aid and Attendance and other benefits since 2015. Beginning October 18, 2018, we will see new rules go into effect.

The VA has instituted a new set of standards for these programs regarding net worth, asset transfers, and income exclusions. Although some of these rule changes will provide some uniformity with eligibility requirements, others will hinder eligibility.

Some of the changes include:

  • A lookback penalty for three 3 years (36 months) of prior uncompensated transfers (such as gifting/transfers) which could create an ineligibility period/penalty period for up to five (5) years. This is the first time the VA has implemented a lookback period.
  • Annuities are now treated differently and can trigger penalty periods.
  • The net worth value is now $123,600.00, but combines both assets with yearly income.

The changes to the VA rules regarding need-based financial benefits will affect many Veterans or their widows making it more difficult for some to obtain benefits. However, planning done before October 18th will not be effected by the new rules.