Financial Requirements

Effective October 18, 2018, the VA now has a simplified financial eligibility test—simplified is a relative term.

The veteran or the veteran's surviving spouse can have no more than $123,600 of financial resources. The VA considers income and available assets as a financial resource. The VA now annualizes the applicant's income and treats is as an asset. However, income can be reduced by the amount of the applicant's unreimbursed medical expenses.

Confused? Let's look at some examples.

Tom

Tom lives in an apartment and has $95,000 in checking and savings with no other assets. He has monthly Social Security retirement benefits of $1,000 per month. Tom has unreimbursed costs for prescription drugs of $250 per month. Does he financially qualify for pension? Yes. He has $95,000 of assets plus $12,000 of annual income less $3,000 of unreimbursed medical costs, which equates to $104,000 of financial resources. That's less than $123,600. So, he's financially eligible.

Susan

Susan owns a home valued at $200,000 and has $100,000 of savings. Her income is $2,500 per month. Her long-term care insurance covers the $1,000 per month she pays for caregiving services to stay home. Does she financially qualify? No. The home is exempt but she still has financial resources of $130,000 ($100,000 + 12 x $2,500) and no deductible health care expenses. $130,000 exceeds the limit of $123,600.

Suzanne

Suzanne is the same as Susan but she has no long-term care insurance to cover the cost of her caregiver. Does she qualify? Yes. Suzanne can deduct $12,000 from the $130,000 leaving financial resources of $118,000 (because her home is exempt). Because that's less than $123,600, Suzanne can financially qualify for benefits.