NEWS AND RESOURCES

Financial Planning for August 2008

Veterans Benefits Could Help Defray Eldercare Costs
If you are a military veteran, you have the sincere thanks of this writer. Your courage and sacrifice has preserved this nation in its darkest times and has not gone unnoticed. Unfortunately, for some veterans, the sacrifices made have not translated into an easy and secure retirement.

According to a Social Security Administration study, based on 2004 information, 3.5 percent of veterans age 62-74 fall below the poverty line and 11.5 percent have income below 150 percent of the poverty line. The incidence of poverty and near poverty for older veterans rises a little - and widows of these veterans have a higher incidence of poverty and near poverty as well. While these statistics are better than the U.S. population as a whole, they are not good considering the sacrifices these men and women have made for their country.

If you, a relative or someone you know are a veteran, there is help from the Department of Veterans Affairs (VA). The VA offers a program of benefits designed to assist eligible veterans and their families that includes providing a minimum income and assistance with the costs of eldercare.

Who is a qualifying veteran?

A qualifying veteran is one who:
  • Was discharged from the military under circumstances that were not dishonorable, and

  • Who served at least 90 days of active military service with one of those days being during wartime, and

  • Whose countable family income is below the yearly limit set by Congress (Maximum Annual Pension Rate or MAPR), and

  • Who is over age 65 or who is permanently and totally disabled.
In addition, a qualifying veteran who entered active duty after September 7, 1980 must have served at least 24 months or the full time that he or she was called to active duty.

A widow or child of a qualifying veteran can also qualify for pension benefits.

What are the available benefits?

In general, the VA offers a pension benefit equal to the difference between the MAPR and countable income. Countable income includes most income sources, except for:
  • Public assistance such as Supplemental Security Income and welfare;

  • Capital gains on the sale of assets;

  • Agent Orange payments;

  • VA pension benefits;

  • Maintenance furnished by a friend, relative, or charitable or governmental organization;

  • Children’s income to the extent that it is equal to or less than the minimum amount required to file a federal income tax return;

  • Various other exceptions enumerated in 38 Code of Federal Regulations Section 3.272.
The definition of income for VA purposes is at 38 Code of Federal Regulation 3.271 and the current MAPR for veterans are located on the VA website. A link to applicable provisions of the Code of Federal Regulations is also at the Department of Veterans Affairs Pension Website. Links to benefits for widows and children can also be found at the VA’s website.

The MAPR is based on various factors, including number of people in the family unit and whether the veteran has ongoing medical or care needs. As with any government program, the formula for calculating actual benefits is complicated. The VA suggests completing the application for benefits unless the veteran knows for a fact that he or she is not eligible. The form can be found at the VA’s Forms website.

VA pension benefits are needs-based. Accordingly, the VA will also look at a veteran’s available assets. The goal is to determine if those assets will provide sufficient income or resources to allow the support of the veteran. The only way to know if a veteran has excess assets is to complete the application for benefits and let the VA make the determination.

Should I care about this if I am not a veteran?

Much of America’s population is now sandwiched between two generations and the resources required to care for both populations can be immense. Family members of veterans can increase available resources if their loved one qualifies for VA benefits.

Parting Thoughts

VA Pension benefits are not a panacea for a veteran’s financial needs, but they can help. If you or someone you know may qualify, take the time to explore the VA Pension Home Page to see if there might be additional resources available.

Try and keep cool this month.

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