VA Aid and Attendance Scam
I knew something was wrong as soon as he said, “ . . my aid and attendance?” I didn’t know just how wrong until we’d talked for a few minutes. The older veteran had parked his car, walked balanced and erect into my office, looked me straight in the eye, shook hands firmly, we sat down, and he said, “Where’s my aid and attendance?”
‘Aid and attendance’ is the third level of both the Department of Veterans Affairs needs-based non-service connected pension programs: for unemployable (assumed if 65 or older) wartime veterans and for surviving spouses of wartime veterans: Basic, Housebound (just what it sounds like, usually based on severe mobility limitations), and Aid and Attendance for the most physically handicapped. The VA Form 21-2680 is the physician-signed examination for Housebound and Aid & Attendance. Blind, Alzheimer’s, and patient (not resident) in a nursing home are ‘automatic’ Aid and Attendance qualifiers. I worked as a veterans benefits counselor for the VA in the mid-1970s. We all dreaded the circumstances in which we felt it necessary to suggest this level of pension benefit. Bed pans, spoon feeding, sponge baths, etc. ‘A&A’ usually did not last very long, if you know what I mean.
This gentleman walked in under his own power and asked where his Aid and Attendance was.
The veteran had been invited to a “Free Wartime Veterans’ Benefits Seminar” hosted by a local retirement living community. The literature was all red, white, and blue. The speaker described a ‘secret’ federal benefit ‘that they don’t want you to know about’: Aid and Attendance. When questioned by a somewhat informed veteran, “No! Don’t apply for Aid and Attendance directly through the VA or through a military service organization like the Legion or VFW. We can get A&A for you in six weeks! They will take months, probably longer. Our financial experts can restructure your assets to meet the net worth test. Move in to your 'active life style' residence here now and we’ll advance you the rent for the few weeks until you start receiving you’re A&A.”
The few weeks turned into a few months. Our innocent veteran sold his home to pay his rent. Finally he came to my Monroe County Veterans Affairs office. All of his money was gone. I could still call a former coworker and did. She checked. The VA Indianapolis Regional Office had received our veteran’s pension claim that week. The convincing “We can get it for you in six weeks” people sat on the stack of solicited applications for months. What did they care? Their victims had signed their lease contracts as part of their applications including retroactive responsibility for the advanced rent – but the latter portions were, of course, not sent to the VA.
How do these people even pretend to satisfy the medical requirements for Aid and Attendance for the applicants? How do they make the retirement communities resemble nursing homes? There are secondary firms who provide ‘medical care’ on a contract basis. “Here’s your doctor-prescribed daily aspirin, Mr. Veteran” counts as ‘administration of prescribed medications’ on the VA check list. As one disgusted veteran told me, “They tried to get me to agree to their giving me my daily aspirin. I don’t need them for that! My wife can remind me.” The ‘financial experts’ are other secondary contractors/partners who conceal the veterans’ assets which exceed the VA net worth limit.
The following text is based on an article I wrote in late 2013 for our local VFW newsletter.
AARP published a warning to veterans five years ago about this type of marketing by agents working in conjunction with retirement communities and by unscrupulous attorneys. The Army issued the following warning in the May-August 2013 issue of ECHOES (the Army Retiree newsletter):
WASHINGTON – Veterans and their Families are targets for dishonest advisers who claim to offer free help with pension claims. The scheme involves attorneys, financial planners, and insurance agents trying to convince Veterans to transfer their assets to a trust or to invest insurance products. What they don’t reveal is that these transactions could mean the loss of eligibility for Medicaid services or loss of access to their money for a long time. Adding insult to injury, the advisors are charging fees that range from hundreds to thousands of dollars for their services.
The Government Accountability Office (GAO) conducted a year-long investigation regarding systematic abuse of VA pension, especially Aid and Attendance (A&A). The following excerpts from independent articles published in 2013 describe the conclusions of the May 2012 GAO report to Congress and the legislative action which resulted.
“If you’ve applied for the Aid and Attendance benefit from Department of Veterans Affairs — which can provide as much as $2,019 [rate quoted in the report, not the current rate] monthly for a veteran and spouse for care giving expenses — then you are all too familiar with some of the reasons for the extended delays in getting a decision from the VA.”
“The VA is under increasing pressure to do something about its enormous backlog of disability claims. But the VA says there is a special contributor to the backlog of A&A claims: the need to deter so-called pension poachers.”
“’The system is being clogged by pension poachers who are preying on veterans, who are submitting thousands of applications for people for whom this benefit was not intended,’ Senator Ron Wyden, Democrat of Oregon, said in an e-mail. Along with Senator Richard Burr, Republican of North Carolina and a ranking member of the Senate Veterans’ Affairs Committee, Mr. Wyden introduced a bill last month aiming to help cap bogus claims.”
“Who are these pension poachers? According to the Federal Trade Commission, and according to the findings of an undercover operation by the Government Accountability Office, hundreds of financial and estate-planning professionals claim to help veterans obtain the A&A benefit. In fact, they mostly charge fees (as much as $10,000) to sell annuities and to set up trusts in other people’s names. Why? To hide a veteran’s assets, so that he or she may qualify for the benefit. The money can be used to pay for assisted living; sometimes potential residents are referred to these services by assisted living facilities.”
“Technically, it does not violate current V.A. rules to transfer assets into annuities or trusts — even the day before you apply for A&A. Medicaid will “look back” at assets transferred up to 60 months in the past to see who qualifies for its nursing home aid, but the V.A. does not yet have such a policy. The bill by Mr. Wyden and Mr. Burr would mandate a three-year ‘look back’ on assets by the V.A.”
“Schemes for transferring and hiding assets can backfire. If the A&A application is denied, as so many are, the vet may not be able to touch the money he has put into annuities and trusts for decades without huge penalties. Further, such transfers of assets could prevent a veteran from later qualifying for Medicaid, which tracks assets and transfers for the previous five years. And given the high cost of nursing homes and assisted living, Medicaid may be the only way for many with limited resources to pay for long-term care.”
“There is the matter of ethics. Though it may still be technically legal to move assets to hide savings, the A&A benefit was not created to enable veterans to save money for heirs. It exists for veterans and their families who are unable to pay for the care they need now.”
“Some believe the Department helped create the ‘poaching’ problem itself by being silent for so long about the A&A benefit. And the V.A. may be perpetuating it by prohibiting veterans from paying for legitimate expert help to begin the application process.”
“’When you leave people who are in crisis to get care in the dark so that the only people with info have a hidden agenda, you set up the perfect storm for these people to come in and sell you whatever,’ said Patty Servaes, founder of Servaes Consulting Group.”
“If you are looking for help in applying for or appealing a decision on the A&A benefit, avoid people who start talking about annuities and trusts instead of looking at your real income and expenses and assets to see if you legitimately qualify.”
One VA shortcut to more quickly close pension claims may have actually added to the backlog. Whereas for decades the veterans’ or surviving spouses’ eligibility for Aid and Attendance or Housebound pension status was a medical decision, about two years ago the VA came up with a check list of “medical” services which, if only two were performed by a retirement home, would justify considering the claimant’s retirement home apartment rent as an “assisted care medical expense” and therefore deductible when computing their countable income to meet the income test. VA eligibility determinations include a “means test” considering both income and net worth. A trainee adjudicator could make the medical expense deductibility decision instead of a medical doctor or specialist. For example, one of these check list services is administration of medicines. Giving the claimant an aspirin every morning met the criterion for that medical service. The check list became available to retirement homes and their scam artists, who promptly tailored their “A&A counseling” and “medical services” accordingly.
End of VFW newsletter based text.
In those rare cases where the gullible veterans or surviving spouses who signed fraudulent A&A pension applications are "caught", it is the person who signed who suffers - not the firms who solicited the fraud. The VA stops the fraudulent pension award retroactively, creating a (usually) large over-payment in the name of the applicant. A federal judgement is filed. Without the A&A pension income the retirement home resident usually cannot afford to pay his or her rent and is evicted. (Please read On the Exploitation of Veterans.) Thank you for your service to the United States during wartime!
Veterans, surviving spouses of veterans, and their adult children often search for professional assistance with A&A pension claims. Many attorneys advertise their “expertise” in this area, including the proud statement that they are “accredited by the Department of Veterans Affairs” – not nearly as impressive as it sounds. I finished the 90-minutes-allowed examination (graded by the VA Office of General Counsel, Washington, DC but administered at VA regional offices around the country) in less than ten minutes. Spent the last minute and a half checking my answers. Twenty-five multiple choice and true-false questions. I am definitely NOT an attorney. but now I'm an VA accredited claims agent.
So the inappropriate drain of many millions of dollars from VA funds by abuse of pension programs intended to assist destitute and unemployable wartime veterans and their surviving spouses continues. 'Must have started well before this century and there's only wan hope of an end. VA can just ask for more money from Congress, and they do. Congress points to the increased money appropriated for the VA with pride. Bad VA management and lack of enforcement of the intent of the applicable provisions of Title 38 US Code, bad Congressional oversight and lack of passage of corrective legislation, and more expense passed along to the taxpayers.
Take your Aid and Attendance inquiry (or any VA pension inquiry) to a military service organization, to a local veterans service office, or directly to the Department of Veterans Affairs. All these sources for assistance are free and have no ulterior motives.