Angela N. Manz, Attorney at Law
The Law Office of Angela N. Manz
Virginia Beach, Virginia 23452
There are several government benefits available to seniors who need help paying for extended care. However, the qualifications and requirements for these benefits can often be complicated and confusing, leaving many people unsure of how to qualify or whether they are applying for right benefit for their family.
When seniors and their families first meet with me, I like to find out about their current care needs, how much they are paying for care, their income, and their concerns for the future. This helps me determine whether they are eligible for the VA pension or Medicaid and allows me to focus on any future family changes or problems that we may need to plan for. After we talk about their concerns, I help the family match their care needs with their financial situation and create a plan that will preserve their assets, protect their family and get them the care that they need. Every family is unique and the plan for your family should be unique as well.
Two of the most important benefits available to seniors are Medicaid and the Department of Veterans Affairs (VA) Aid and Attendance Pension. While the programs may seem similar, the eligibility requirements and the benefits are quite different.
VA Aid and Attendance Pension
The VA pension is available for veterans and their surviving spouses. It pays a monthly dollar amount and that money can be used to help pay for a nursing home, assisted living rent, adult day care, in-home care, including when a child is caring for a parent, and other medical expenses. For a married veteran, the maximum pension is $1,949 per month. A single veteran may receive a maximum of $1644 per month and a surviving spouse may receive $1056.
In order to be eligible, the veteran must have served 90 days of active duty in the military, with one day during a period of wartime. The VA has established specific dates that constitute a “wartime period,” but generally veterans who served during World War II, the Korean War, the Vietnam War, and the Persian Gulf War will be eligible. Veterans also must not have been dishonorable discharged.
Next, the veteran or surviving spouse must show that they need the assistance of another person in order to perform daily tasks, such as eating, bathing, dressing, cooking, taking medications, or driving. Veterans and surviving spouses needing assistance or a protective environment to stay safe because of dementia may also qualify for the benefit.
Finally, in order to receive the pension, all applicants must meet the asset restriction. Unlike Medicaid, the VA does not have a set asset limit for this pension. Instead, the VA will look at many factors to determine if assets are too high. The VA does not include the value of the home or a car.
Even though there is an asset limitation, the VA does not penalize for transferring assets outside of the veteran or spouse’s name, if done correctly. This means that there are many planning options available to help families become eligible for the benefit. However, you must be careful. When assets are transferred to secure eligibility for VA benefits, the family must have a plan ready in the event that their loved one needs Medicaid in the future to pay for extended nursing care. Medicaid imposes a penalty for assets that are gifted away or moved into certain types of trusts and I strongly suggest that you work with an experienced elder law attorney before making any gifts or transfers.
When should you consider VA Aid and Attendance?
I generally recommend that families apply for Aid and Attendance when they have medical expenses that exceed a large portion of their income and using the pension would help bridge that gap. For example, if Mom and Dad have a monthly income of $2,500, and they move into an assisted living facility that costs $3,500 per month, I would recommend that they apply for the VA pension. For a married veteran, the maximum pension is $1,949 per month. Therefore, the VA pension, combined with their income, would give them enough money to pay for their assisted living community. Further, in many states there is little or no Medicaid help for assisted living, making the VA benefit even more valuable.
What if your loved one is in a nursing home? Typically, the cost of nursing home care is often so high that the VA pension does not pay enough to cover that cost, even when combined with your loved one’s monthly income. However, if your parent is going through a Medicaid penalty period or needs time to spend down assets before he can be eligible for Medicaid, the VA pension can be of great help during that transitional period.
What is Medicaid?
While Medicaid is also designed to help with the cost of long-term care, it differs from the VA pension. Medicaid does not pay a monthly pension. Instead, Medicaid directly pays the care provider, i.e. the nursing home.
Many people believe that they can only get Medicaid once they have spent all of their money in the nursing home, but this is absolutely not true. To be eligible for Medicaid, the applicant may only have $2,000 in countable assets. However, not all assets are “countable” assets. In Virginia for example, non-countable assets include up to $2,000 cash, your home (under certain circumstances), one car, personal property, certain funeral and burial funds (including a pre-paid funeral or burial), certain property used in a trade or business, some life insurance (up to $1,500 cash value), and certain annuities.
Further, even though the Medicaid applicant may only have $2,000, we still have many options for legally sheltering and protecting assets. Unfortunately, Medicaid does not pay for everything that someone needs while they are in a nursing home. Therefore, it is important to be able to keep some assets for the benefit of the Medicaid applicant so that they can have what they need, as well as those things that bring them comfort and enjoyment. Typically, a married couple can protect most, if not all, of their assets and have one spouse become eligible for Medicaid. A single person can typically protect half of their assets and then become eligible Medicaid. Never assume that your parent or loved one is not eligible.
When should you consider Medicaid?
I typically recommend Medicaid when someone needs extended care in a nursing home. This is because the cost of the nursing home is generally so high that the person’s income, even coupled with the VA benefit, is not enough to pay for the care without depleting their assets.
I may also recommend Medicaid for home care when the household income is high, but the person requiring care has a low income. The VA considers the total household income, while Medicaid typically only looks at the income of the person needing care. For example, if Dad has a monthly income of $4,500, and Mom’s monthly income is only $500, it may not be wise to apply for the VA pension. To get VA benefits, Mom and Dad would have to spend a large amount of their income each month on Mom’s care. If they can’t afford that much care or if Mom doesn’t need that much care, I may recommend that Mom apply for Medicaid home care benefits. Because Medicaid only looks at Mom’s income, in many states Mom would qualify regardless of Dad’s high monthly income. However, it is important to make sure that Mom still meets the asset requirement for Medicaid, which may require sheltering assets before she could become eligible.
While these benefits are complex, they can be a tremendous help for your family and you should never assume that your loved one cannot qualify. Caring for a senior parent can be difficult, but taking the time to fully explore all of the benefit options is worth the effort so that your loved one can preserve their assets, protect their family and get the care they need.
Amy Cameron O’Rourke, MPH, CMC
The Cameron Group
Orlando, Florida 32803
Watching a parent grow older, become more frail and maybe more vulnerable can be an enriching experience when there is a framework for understanding the stage they are in. Without understanding some of the common stages, however, it can be a time fraught with frustration and anxiety. This time of life for an elder is called “late life” and one of the books that best describes and supports this time is the pioneering book, “ My Mother, Your Mother”, by Dr. Dennis McCullough.
The stage that will be the focus of this article is the crisis stage. This stage is characterized by an acute medical episode such as a fall or a stroke. It can be something non-medical but just as devastating such as loss of driving privileges, loss of memory; some life change that has begun significantly altering the elders’ lifestyle. Typically the elder is in denial of the severity of the change and the children are overly anxious as they are projecting the worst case scenario on to the elder. Communications frequently breakdown as anxieties collide. The elder does not want the children telling them what to do and the children want a permanent solution placed on their parent so they don’t have to worry anymore.
Strategies for the Crisis Stage: Bring in an objective third party to guide these communications, which are usually fraught with emotions. Professional Geriatric Care Managers are elder care experts who understand the complex systems that care for the elder (hospitals, nursing homes, assisted living facilities) and can help the family successfully resolve the immediate problem and coordinate a plan of care for after the crisis is over. They listen carefully to each family member and the elder to help the family come to a consensus.
Family meetings for are set up on a regular basis for the future with the following recommended components. First, time in the beginning of the call should be allowed for each family member’s concerns to get verbalized. Secondly, prioritize the concerns and list the responsibilities associated with the concerns. Lastly, divide the responsibilities for the care of the elder. For example, long distance siblings may be responsible for communicating to other family members via e mail, phone or Facebook. They may also take on the insurance issues, or financial issues that arise. This leaves the hands on care for the child who lives locally. The Care Manager can be on the calls to help with the decision making and also provide guidance and assistance in implementing some of the solutions the family members decide upon.
After the crisis, the family meetings should be continued to maintain continuity of communication and to maintain the plan of care for the parent.
Philip C. Benedict, CFP
Benedict Financial Advisors, Inc.
Atlanta, Georgia 30328
What would make most people happier? Better health? More friends? More time with children and grandchildren?
Most people of any age would like more of the above, but one thing that would definitely improve the financial and emotional quality of the lives of many people, especially seniors, is more monthly cash flow. Think about it.
If you have plenty of monthly cash flow you can hire people to do the things you can no longer do. If you have insufficient monthly cash flow you are dependent on family, friends and government programs.
I don’t know about you, but, I want to be able to control my own financial destiny as much as humanly possible.
The time to act to create a higher monthly cash flow isn’t when you are elderly, it is right now. Right now, no matter what your age. It isn’t when interest rates are higher, it isn’t when the stock market is higher, it isn’t when Congress finally does something right, it is RIGHT NOW.
Every person and every family that dreams of a retirement of leisure and a dignified ending needs to start creating their future monthly cash flow today.
At the core of creating this future monthly cash flow is the strategy of investing in dividend paying common stocks of globally dominant companies. Of course everyone needs some savings in the bank and maybe some interest paying bonds, but it is getting comfortable with investing in dividend paying stocks and doing it that will potentially give you the cash flow you want during your retirement years.
What? You say owning common stocks are too risky to count on during retirement. Maybe that is because you are focused on the daily share price movements of the stocks rather than the cash flow the stocks are expected to generate. You have to learn to differentiate between the stock price and the underlying value of the operating company.
For a simple example, let’s take a look at a giant consumer products company’s actual history and see if we can focus on the company and not the stock.
Let’s look at the COMPANY over the last ten years:
Let’s look at the STOCK:
This company has been very successful. Management has done about everything an owner (shareholder) could expect it to do. It has increased revenues, profits and the amount of benefits to the shareholder (dividends).
What can corporate management NOT control? It cannot control the share price, which is a function of the euphoria-and-panic of the financial marketplace.
If you are retired or planning to retire, your investment accounts are probably an important source of your retirement income. And, what do you really need in retirement? For most people it is the monthly cash-flow.
What has this company done for shareholder cash-flow (dividends) since 2000? It has more than tripled.
There are no guarantees in the world of investing but IF this company can triple it’s dividend over the next ten to twelve years, then the shareholder will be earning about 9% to 10% annually based on today’s investment. That will be a nice retirement cash-flow.
Own the company and not the stock.
I realize we can only own the “stock” of a publicly traded company, so it is more accurate to say FOCUS on the company and not the stock price.
But, you may be saying, “This country is in a giant mess and the mess seems to be getting worse every day.”
The original roots of this company go back to the year 1837. It has survived the war-between-the-states, two world wars, various terrorist attacks, and all sorts of natural disasters and the leadership of a lot of inept politicians over the years. It was able to prosper during the terrible inflation years of the late 1970’s and early 80’s. Today, most of its revenues are earned outside of this country, thus it is not overly dependent on the domestic economy.
However, despite this resilience, the share price of this company has declined in value rather dramatically many times during its history. And we would expect the same in the future. Own the company and not the stock; it is the key to your financial contentment during your retirement years.
Even a great company can stumble, so you need to consider owning a group of stocks similar to the one above and enjoy the quarterly dividends. We believe no other asset class is likely to adapt to the rapidly changing and challenging world economic environment as well as these globally dominate international companies. They need to be a core part of almost every investor’s retirement income.
J. Michael Bishop, JD
Smiley Bishop & Porter, LLP
1050 Crowne Pointe Parkway
Atlanta, GA 30338
Interest rates on bank CDs and money market funds have been at historic lows over the last several years. Sure, everyone wants to make more income from their assets. But always remember there is no free lunch. No matter what a salesman might tell you, with bigger returns come bigger risks.
In an effort to attract seniors’ retirement funds, Wall Street has introduced an array of increasingly complex products that promise investors higher yields than are available from CDs or government bonds. Unfortunately, most of these products carry the danger that an investor can lose most or all of his or her principal investment. In many instances, higher yielding investments are simply inappropriate for seniors seeking to preserve their assets and should not be recommended by stockbrokers, financial advisors or investment advisors. (more…)
You helped your veteran client obtain eligibility for veterans pension with aid and attendance. The application was filed, all verification materials were submitted, and you wait for an answer. The good news is, your client was awarded with benefits. You feel really good about helping veteran clients. You feel even better when the Veterans Administration approves a claim for one of your clients.
But then the call comes in. The client is calling to ask you why they haven’t received any money. (more…)
Callie Rogers, age 16, won $3.1 million in a British lottery. By the age of 22, the unwed mother of two, having attempted suicide twice, and having spent over $400,000 on cocaine alone (in addition to more conventional luxuries), was broke, living with her mother, and working three cleaning jobs. She described her sudden windfall as having ruined her life, and she was looking forward to finding happiness once her winnings were gone. (more…)
Aging in place has grown increasingly popular throughout the country. According to an AARP survey, 70-80% of respondents say they would prefer to live out their days in their own homes. It is understandable that so many people choose to age comfortably in their own home rather than re-locating to a nursing home or assisted living facility. However, many matters must be considered when financing longevity. Below are some points to take into consideration in order to adequately plan for one’s future: (more…)
Personal Care, Inc.
Greensboro, North Carolina
If you or a family member reach a point when you believe it is time to use that long term care insurance policy that was purchased, what do you do? All too often people don’t read the fine print on their policies and aren’t sure how to go about accessing them when they need them.
There are some basic things to keep in mind when you have reached this point. First of all, do you qualify? Different policies have different requirements for what constitutes eligibility. The industry standard is that you must need help with at least two activities of daily living or ADLs. These include tasks such as bathing, dressing, toileting, and others.
When you contact your long term care insurance company about activating your policy and receiving benefits they will send an RN out to do an assessment as well as contacting your doctor. Below is a list of items that insurance companies use in order to determine whether or not you are eligible to receive those benefits. (more…)
Sheri Abrams, Attorney at Law
Needham Mitnick & Pollack, PLC
Falls Church, Virginia 22046
WHAT ARE SOCIAL SECURITY DISABILITY BENEFITS?
Social Security Disability is a benefit received from the Social Security Administration by disabled workers and in some cases their dependents, similar to those received by retired workers.
To receive benefits under the Social Security Disability program, you must have a physical or mental health problem (or a combination of problems) severe enough to keep you from working in any regular paying job for at least one year. The test isn’t whether or not you are able to go back to your old job, and the test isn’t whether or not you have been able to find a job lately. Rather, the test is whether you are capable of doing any job available in the national economy. By using an extensive set of regulations, the Social Security Administration takes into account your medical condition, your age, your abilities, your training and your work experience in deciding your case. (more…)
Allen Kampf, RFC, CLTC
Wealth Advocacy Partners
Sparks, Maryland 21152
As the number of elderly Americans increases, long-term care (LTC) needs and costs are likely to grow. Many believe that private long-term care insurance can and should play a more significant role in the financing of home care and nursing home services. Wider use of such insurance could shift the burden from individuals, who are often ill-prepared to pay for such care out-of-pocket, as well as from state Medicaid programs, which often serve as a default financier of long-term-care services. (more…)
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For additional information about professional membership in the National ElderCare Matters Alliance, (including the many benefits of becoming one of our ElderCare Matters Partners) and to download an Application for your Basic, Premium or Partner Membership in the National ElderCare Matters Alliance, visit: ElderCare Matters Alliance.