Federal investigators this week urged Congress to crack down on a veteran’s benefit that South Florida seniors are tapping to pay for assisted living and other care.
The report by the Government Accountability Office, released Wednesday at a Senate Special Committee on Aging hearing, said financial planners and attorneys are helping undeserving wealthy elders qualify for what’s called the Aid and Attendance pension by hiding their assets.
But some working with seniors question if reforms might keep the money out of the hands of veterans who need it, instead of curtailing abuse.
They say the vast majority of those applying for the pension have modest incomes, and often can’t afford care if they grow too frail to care for themselves. Approval already can take from four months to a year, and more restrictions could make the wait longer.
“My clients are not millionaires. They are middle-class people who are scared to death of running out of money,” said Alice Reiter-Feld, a South Florida elder-law attorney who sometimes includes the benefit in veterans’ estate planning.
Alene Tarter, director of benefits and assistance for the Florida Department of Veterans Affairs, is concerned that veterans unknowingly could put their benefits at risk depending on what new regulations might be passed.
“You could have a veteran, possibly with dementia, being told by a financial company, ‘Just sign here and I’ll get you a pension,’ ” she said. “The veteran doesn’t understand and signs. The VA finds out it’s an improper transfer, comes back and severs the veteran’s pension.”
Aid and Attendance, administered through the U.S. Department of Veterans Affairs, can give a frail or disabled veteran and spouse up to about $23,400 annually toward care and housing. Eligibility is based on the age of the veteran, level of disability, income, out-of-pocket medical expenses and assets.
The GAO recommended Congress institute a “look-back period” for pension eligibility. Applicants would be disqualified if they had made any significant financial gifts or transferred assets during that period. Medicaid, which provides healthcare for the poor, has a five-year look-back aimed at keeping well-off seniors from getting Medicaid’s nursing home benefit.
Lawyers and financial planners currently are able to legally transfer funds or make gifts at any time in order to bring a veteran’s assets below around $80,000, making them eligible for Aid and Attendance. The maximum income allowed for a veteran with no dependents is about $20,000 annually.
Sen. Ron Wyden, D-Ore., and Sen. Richard Burr, R-N.C., have said they would sponsor legislation necessary to give the U.S. Department of Veterans Affairs look-back authority.
Confusing eligibility guidelines and lack of VA oversight also has contributed to possible abuses of the program, the report said. Last year, the system paid about $4.3 billion to 517,000 veterans and their spouses. Investigators recommended that new applicants be required to give more financial information and that it be verified, although VA officials said this might slow the approval process.
The GAO didn’t mention what is a growing concern for local veterans service offices: individuals claiming to be benefits advisers, or representing nonprofit organizations, taking fees to file applications — a violation of federal law.
Other veterans are being sold questionable annuities or life insurance policies by agents who get them in the door by promising to qualify them for Aid and Attendance, Tarter said. The GAO said it had identified more than 200 organizations — some with “veterans” in their title — that are using Aid and Attendance application assistance as a way to market financial products such as life insurance or annuities.
Veterans Financial Inc., which has four financial representatives in Florida, has transferred assets in only about 2 percent of its cases, President Emily Schwartz testified at the Senate hearing. The 69,000 families who have contacted the company about the benefit were helped with the application at no cost whether they purchased financial products or not, she said.
Claudia Tuck, director of Palm Beach County‘s Division of Human and Veterans Services, said so far this year her office has taken complaints from several seniors about upfront application charges, include two people who each paid several thousand dollars.
“We want people to know our office, and many veterans organizations, are always able to help them apply for benefits for free,” Tuck said.
By: Diane C. Lade, Staff writer
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Copyright © 2012, South Florida Sun-Sentinel
Alice In The News: Veterans Benefit Reforms Could Slow Approvals