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Veteran's Pension Benefits - Changes Are Forthcoming
As a result of a performance audit conducted by the United States Government Accountability Office ("GAO") during the period of July 2011 to May 2012 regarding the Department of Veterans Affairs ("VA") pension program, eligibility changes are forthcoming.
The audit revealed that the program does not adequately ensure that only those with financial need receive pension benefits. In fact, the audit discovered the following:
• The VA relies on self-reported information and the verification process is incomplete;
• The VA has unclear guidance on assessing financial eligibility leading to inconsistent decisions;
• Over 200 organizations market services to help qualify veterans and surviving spouses for VA pension benefits;
• Some products and services may adversely affect claimants; and
• Costs for services varied, with some organizations charging prohibited fees.
In light of the above, the audit uncovered that a pension recipient had transferred over a million dollars in assets into an irrevocable trust less than three months prior to applying for benefits. The audit further ...
... discovered that the VA was aware of the asset transfer when the pension claim was approved and that the VA did not count the trust as part of the claimant's net worth in that the federal regulations state that "when evaluating financial eligibility for pension benefits, assets gifted to someone that does not reside in the claimant's household will reduce the claimant's net worth if all rights of ownership and control of the assets have been relinquished." As a result of the discoveries, GAO stated that although these types of transfers are generally permitted under law for the pension program, the practice is not consistent with other federal means-tested programs such as Medicaid and SSI. This weakens the pension program's goal of supporting those with financial need.
As a result of these findings, the GAO recommended to the VA that congress should consider establishing a look-back and penalty period for pension claimants who transfer assets for less than fair market value prior to applying for VA pension benefits, similar to other federally supported means-tested programs. The VA asserted that after identifying gaps in the VA's regulations on this point, it has begun drafting regulations to address the issues at hand.
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