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VA Benefit 3 Year Look Back Implemented in 2016

Michigan estate planning and elder law news brief.

Michigan estate planning and elder law news brief.

In 2014, Congress proposed a law that would penalize veterans and surviving spouses of veterans who were looking to apply for the VA Benefit if they transfered assets within the three year period from when they applied for benefits.  If the veteran or surviving spouse did transfer assets, there would be a penalty imposed on the veteran or surviving spouse.

However, that bill failed and never saw the light of day.

VA Benefits Proposed Rule Change in 2015

In early 2015, the VA took another route to get the “3 Year Look-back” rule implemented.  Instead of a change in law through Congress, they looked to change the administrative rules.

With that goal in mind in early 2015 they made a proposed rule change that would implement a 3 year look-back.  There was a comment period that closed March 24th.  There were over 800 people who made comment, including many elder law lawyers.

However, once the comment period closed.  We heard nothing.  Until now….

Chalk this up to VA Benefits gossip if you wish, but it’s something.

An email from a VA official to an elder law attorney colleague of mine.

VA Benefit 3 Year Look-Back Implemented in the End of Fiscal Year 2016

According to the email from the VA official, the new VA rule will be implemented in the end of fiscal year 2016.  There are still many questions out there…for example will the rule grandfather in prior planning?  Who knows.  But for now, we keep moving ahead, because these are just rumors.  But where there’s smoke, there’s fire.

Here is a summary of the proposed rule:

The Department of Veterans Affairs (VA) proposes to amend its regulations governing entitlement to VA pension to maintain the integrity of the pension program and to implement recent statutory changes. The proposed regulations would establish new requirements pertaining to the evaluation of net worth and asset transfers for pension purposes and would identify those medical expenses that may be deducted from countable income for VA’s needs-based benefit programs. The intended effect of these changes is to respond to recent recommendations made by the Government Accountability Office (GAO), to maintain the integrity of VA’s needs-based benefit programs, and to clarify and address issues necessary for the consistent adjudication of pension and parents’ dependency and indemnity compensation claims. We also propose to implement statutory changes pertaining to certain pension beneficiaries who receive Medicaid-covered nursing home care, as well as a statutory income exclusion for certain disabled veterans and a non-statutory income exclusion pertaining to annuities.


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