The Many Faces of Dementia: Financial aid
September 9, 2013
Editors Note: This column is the second of two parts about financial assistance programs to aid the elderly.
The applicant — the veteran — must have served in a military service and had active duty during a “war.” A surviving spouse of a qualified veteran may also be qualified based on the veteran’s record. Currently, anyone who served at least one day’s active duty during World War I, World War II, Vietnam or Korea are eligible. The qualifying documentation includes the military discharge papers, typically the DD-214 (must be certified, recorded or the original sent to the Veteran’s Administration – a bit risky), marriage certificates (if a surviving spouse), death certificates, and other papers. If these documents are not kept at home, requesting these records from government entities can take time.
There must be a “need” — that is a medical reason to receive income from the A&A Program. For example, a person must be either taken care of at home or move into a care home because of a need. The person could be handicapped in some manner that is disabling. To qualify as handicapped, a person must have a condition that restricts them in ‘Activities of Daily Living’ and requires some level of care or assistance. A doctor will have to certify the “need” and fill out a detailed application.
From a financial standpoint, “need” can be described as a person spending a majority or all of his or her income on their health expenses and care. For example, a person living in a care home has an income from Social Security, a small pension and an IRA for a combined income of about $2,200. The remaining bank account has about $20,000. Expenses include the care home, medical expenses, and personal expenses for a total of $2,800 per month. It’s obvious that with $2,200 in income and $2,800 in expenses, the bank account is rapidly depleting.
But if otherwise qualified for the A&A Program, that person would receive more than $1,100 from the VA, and would have enough disposable income to take care of increased medical expenses and other unanticipated expenses in the future.
There are many details and qualifying factors involved in the financial segment. Each asset should be looked at carefully to determine eligibility. In one example, if the person (veteran or surviving spouse) has an IRA savings account that has too much value, they may be disqualified. However, that IRA may be able to be transferred to a VA Compliant Immediate Pay Annuity. That person may then meet the requirements to receive A&A benefits. After reaching age 70.5, the IRS states that an IRA must distribute a certain amount of money. Its called an RMD or Required Minimum Distribution. For instance, a 91 year old woman with $50,000 in her IRA must take a minimum distribution of a little more than $400 per month based on IRS actuarial tables that indicate she will live to age 96.
So, with help from a Veterans Service Organization, by transferring the IRA in her bank to an IRA VA Compliant Annuity distributing the required amount or more, the VA no longer looks at the $50,000 as a cash account or asset where a check can be written. The VA’s reasoning is that a regular IRA could be converted to all cash even if the minimum annual income is taken. A VA advocate can help you evaluate your finances and provide information about certain legal financial shelters.
Among the many other details, some assets are a little more complex such as an exemption in owning a home and or a car. How much money can you have in the bank? Is a Living Trust acceptable or does it disqualify an applicant. Consult with a VA Advocate to better understand the financial qualifications. These requirements are critical.
There are numerous pitfalls that can and should be avoided. One pitfall that must be carefully considered is that while qualifying for the A&A Program, an applicant might inadvertently disqualify himself or herself from Medicaid. Those, again, are the “devil in the details” where the immeasurable professional help can be the difference between success and failure.
Know that this process can be time consuming and frustrating. You need to have the tenacity of a bull dog. In the end, an extra $1,000 or so every month can be very rewarding to offset increasing medical costs.
This article was submitted by Tor Eckert with permission from http://www.alz.org. Eckert has been involved all facets of Alzheimer’s disease since the 2005 including owning a Alzheimer’s Care Home. His public speaking forums — The Many Faces of Dementia have provided health care professionals, adult children, caregivers and families with a better of understanding of Alzheimer’s and the other dementias. For more information, please call Eckert at (530) 432-8308 or email email@example.com.