The Rating for Aid and Attendance
A Rating Allows for Special Deductions and Additional Income Allowances VA will provide additional income in the form of an allowance on top of the basic Survivor's Pension benefit of $9078/year or $756/month if the widow has a regular medical (care) need for assistance or a need for supervision due to disability. This is sometimes called "Improved Survivor's Pension" or "Survivor's Pension with an allowance."
A medical need for assistance or supervision due to disability is, in most cases, crucial to getting the Survivor's Pension benefit or not getting it
. A so-called "rating" from VA recognizes either the regular need for aid and attendance from another entity or the condition of being housebound. This rating, determined by a doctor's examination is determined from VA Form 21-2680, and allows certain medical and care expenses and ancillary non-medical expenses to be subtracted or deducted from future income.
A "rating" also increases the allowable Survivor's Pension rate as seen above in the MAPR Chart. For example, a surviving spouse with no rating is only eligible for basic Survivor's Pension, up to $756/month. If the same surviving spouse becomes unhealthy and proves a need for the ongoing aid and care of another individual, he or she would be eligible for up to $1209/month.
Except for very poor households, most widows could not get the Survivor's Pension benefit without this special rating provision for the deduction of personal care and medical-related expenses simply because their income is too high.
The high cost of medical and medical-related expenses associated with long term care such as home care, assisted living or nursing home care are usually the main deductible expenses VA counts when calculating the benefit. A surviving spouse, for example, who is paying $3,000/month for care at assisted living and has income of $2,800/month would qualify for the full Survivor's Pension benefit with the aid and attendance allowance of $1209/month IF that surviving spouse was "rated" for the need of aid and attendance of another person.
Unfortunately, very few of all eligible surviving spouses are actually receiving Survivor's Pension. Most do not know of the benefit nor this special deduction.
How Survivor's Pension Is Calculated
Surviving Spouses without an "Aid and Attendance or Housebound Rating"
VA calculates Survivor's Pension Benefits as follows:
- Gross Household Income – Income Exclusions – Certain Ongoing Medical Expenses = Income for VA Purposes (IVAP). We will discuss Medical Expenses and IVAP below. Then,
- Applicable MAPR – (IVAP + 5% deductible) = Actual Benefit
Surviving Spouses with an "Aid and Attendance or Housebound Rating"
, VA calculates Survivor's Pension Benefits as follows:
- Gross Household Income – Income Exclusions – Income Exclusions – Most Ongoing Medical Expenses = Income for VA Purposes (IVAP). We will discuss Medical Expenses and IVAP below. Then,
- Applicable MAPR – (IVAP + 5% deductible) = Actual Benefit
The Net Worth Limit
The net worth limit for Pension or Survivor Pension entitlement is
$127,061 for effective dates of payment starting December 1, 2018
through November 30, 2019.
Definition of Net Worth and the Bright Line Test Effective
October 18, 2018, the Department of Veterans Affairs (VA), changed the net worth criteria for Pension claims. Net Worth on or after October 18, 2018 is the sum of a claimant's:
- income for VA purposes (IVAP), including the income of a spouse and dependent children under certain circumstances
The IVAP calculation is based on an initial application for Pension. This means that only reasonably predictable medical expenses can be subtracted from household gross income such as recurring insurance premiums, the recurring cost of paying caregivers or care services and possibility the recurring cost of renting medical devices.
Assets are the fair market value of all property that an individual owns, including all real and personal property, unless excluded under 38 CFR 3.275(b). If the total value of an annuity or similar financial instrument is used when calculating the asset amount, VA does not include the monthly income derived from the same annuity or similar financial instrument when calculating income for net worth. This would result in double counting for calculating net worth.
Fair market value is the price at which an asset would change hands between a willing buyer and seller. VA will use the best available information to determine fair market value, such as inspections, appraisals, public records, and the market value of similar property. Fair market value is determined based on valuations at the time of application.
The following are rules for asset inclusion for net worth.
- If the claimant is a veteran then the veteran's assets include the assets of the veteran as well as the assets of his or her spouse.
- If the claimant is a surviving spouse, the assets include only the assets of the surviving spouse.
- If the claimant is a surviving child and he or she has no custodian or is in the custody of an institution, the child's assets include only the assets of the child.
- If a surviving child has a custodian other than an institution, the child's assets include the assets of the child as well as the assets of the custodian. If the child is in the joint custody of his or her natural or adoptive parent and a stepparent, the child's assets also include the assets of the stepparent.
- VA will not consider a child to be a veteran's or surviving spouse's dependent child for Pension purposes if the child's net worth exceeds the net worth limit
The total value of an annuity, trust or other similar financial instrument is counted as an asset if the claimant establishes that he or she has the ability to liquidate the entire balance. For example, if the entire asset is locked up in an irrevocable trust and unavailable, it is not an asset. Likewise if an income annuity is income only and has no feature to get to the original purchase amount, it is not an asset. Other such arrangements as limited partnerships, private stock or an installment sale would likely not have an option to sell or liquidate and as a result would also not be counted as assets.
If the claimant cannot liquidate the value of the annuity, trust or other similar financial instrument or information about the liquidity of an annuity is unavailable, VA counts the monthly income received as income for net worth purposes and excludes the financial instrument value from assets. The same would be true of any other financial arrangement that locks up the asset but produces income.