Proposed Regs from the VA

The Federal Register on January 23, 2015 included a proposed rule from the VA on Net Worth, Asset Transfers, and Income Exclusions for Needs-Based Benefits.  Here is an excerpt from the executive summary

This proposed rulemaking would amend regulations governing VA’s needs-based pension programs to promote consistency in benefit decisions, reduce opportunities for attorneys and financial advisors to take advantage of pension claimants, and preserve the integrity of the pension program. The revised regulations would promote consistent decisions by establishing a bright-line net worth limit and re-defining net worth as the sum of assets and annual income. The revised regulations would also promote consistent decisions by defining in regulations those unreimbursed medical expenses that VA will deduct from a claimant’s annual income for purposes of determining a claimant’s annual pension payment.

By establishing in regulations a look-back and penalty period for claimants who transfer assets before applying for pension to create the appearance of economic need where it does not exist, the revised rules would reduce opportunities for financial advisors to provide advice for the restructuring of assets that, in many cases, renders the claimant ineligible for other needs-based benefits. Establishing a look-backand penalty period for pre-application transfers of assets would also preserve the integrity of the pension program by ensuring that VA only pays the benefit to those with genuine need.

Comments are due by March 24, 2015.