How to protect yourself

On June 6, 2012, Sen. Kohl led the Committee in a publically televised hearing and heard testimony concerning this issue. The GAO released a detailed 15-page report concerning their findings and recommendations during the hearing (GAO 12-540). The report identified over 200 individuals and companies who had been participating in what Sen. Ron Wyden (D-OR), Vice-Chairman, termed “pension poaching.”

The committee’s investigation was centered on Veterans and family members seeking benefits, under the VA-administered Non-Service Connected Disability Pension. Commonly, although erroneously called “aid and attendance,” the purpose and intent of the Improved Pension program is to insure that wartime veterans, their dependents and un-remarried surviving spouses are provided a minimum degree of financial security.

The “poachers” have taken advantage of veterans centering on one important eligibility requirement of Pension, a demonstration of “limited net worth.” While current law places no actual limitations on sequestering assets prior to applying for benefits, the spirit of the law provides a financial safety net, not a method of enriching heirs. The GAO discovered claimants with estates worth up to a million dollars that have been able to receive tax-free VA benefits meant for low-income veterans and family members. Further, the hearings questioned the appropriateness of the investment vehicles sold to the elderly disabled veterans, when there were no methods to access these funds if needed by the veteran during his or her lifetime.

The practical result of these deceptive and often illegal operations has been to place the entire Pension program under greater scrutiny by both Congress and the VA to avoid further abuse. The GAO recommended 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.” They recommended that the “VA should: (1) request information about asset transfers and other assets and income sources on application forms, (2) verify financial information during the initial claims process, (3) strengthen coordination with VA’s fiduciary program, and (4) provide clearer guidance to claims processors assessing claimants’ eligibility.” (GAO 12-540). The VA has agreed to the suggestions in principal and agreed to study the issue further.

If you have attended a “seminar” or have communicated with a company on the internet concerning VA pension benefits, make absolutely sure you thoroughly know the background, motives, and VA accreditation status of anyone offering assistance to you or your family. Some individuals and groups have even created deceptive “store front” organizations with patriotic names touting veterans assistance. Consumers just need to be aware that scams exist, motives are often tainted and make absolutely sure they know the person or company they are dealing with. Also, check the VA’s accreditation database. Anyone offering even advice, much less assistance, to veterans regarding a claim must be directly accredited by the VA’s General Counsel.

Before you act, do your due diligence. Seek professional advise. Any financial planning or transfer of assets has the potential to impact not only VA benefits but other governmental benefits, as well as having tax consequenses. Understand that simply being VA accredited does not necessarily mean being knowledgeable, experienced or professional. Question everything and be sure you know all of the answers before you decide on a course of action. Facts are your friends.