A couple of months ago, a veteran who is receiving care in an assisted living facility and receives Aid and Attendance called to ask whether the receipt of a personal injury settlement would affect his benefits.
He was involved in a car accident about two years ago, and the case was finally coming to a close and he was going to receive a settlement of approximately $60,000. Because the receipt of Aid and Attendance is a needs-based benefit (meaning you cannot have over a certain amount in assets and income), receiving a PI settlement could affect whether the Veteran can keep his/her Aid and Attendance benefit.
The V.A. will treat a lump sum settlement as income and will annualize it. Thus, the receipt of $60,000 is income of $5,000 per month. This could have the effect of reducing the A&A benefit that the Veteran receives if his unreimbursed medical expenses do not exceed 5% of the maximum annual pension rate (which is the maximum amount of pension payable to a veteran, surviving spouse or child).
The Veteran will lose benefits for the next 12 months.
The veteran can reapply for benefits after 12 months, but if the settlement causes his assets to then be over the threshold amount (presumably $80,000), then he/she may not be able to qualify. The VA has held that assets placed in a special needs trust should be considered in calculating the claimant’s net worth for improved-pension purposes – so transferring the assets into a Special Needs Trust is still going to count as an asset against the Veteran.
For more information about Veteran’s Affairs and benefits, please contact the Elder Law Offices of Law Ohall today.