VA Aid and Attendance Audits


Many of you have retained me to do estate planning and thereafter may have applied for the non-service connected disability pension benefits.  The information provided to the person that filed your VA claim is then matched against what is declared on the individual tax return.  I have had several of my clients contact me (and I have heard from many other attorneys in the country that they have been contacted by clients) with letters from the VA stating that they have compared the 2010 individual tax return against what was declared on the VA claim and have found discrepancies.  These discrepancies are usually indicating that the income on the tax return exceeds what was declared on the VA claim, thus the claimant exceeds the income limits, and they will terminate the VA pension payments.


If you get a letter like this please do not try and handle this without assistance. What is going on with this?  Perhaps there is an agenda with the VA to get back money that has been awarded.  Perhaps not.  The analysis of the VA adjudicator or auditor seems perplexing at best.


What the VA is doing is counting all interest and dividends earned for the calendar year and assuming that that amount is the income that should have been declared on the VA claim.  Often there is liquidation of IRAs, deferred annuities, and the like, that create taxable income which must be shown on the individual tax return.  If it is an IRA, the total amount of the IRA will be taxable income.  These funds may have then been consumed for care, or perhaps transferred out of the veteran’s name.


Income earned prior to the filing of the VA claim is NOT counted for VA purposes.  If, for example, a VA claim is filed in November, the VA should only look at income from November and December of that year.  Instead they are looking at the entire calendar year even though the income from January to October is not supposed to be counted.  This is causing the VA to conclude that the claimant had too much income in relation to their cost of care.  The correct calculation seems very simple but the VA has continued this practice.


There are some documents and explanations that need to be sent back to the VA in response to this VA audit letter.  If you are unclear about what you are doing you can really mess this up and we may not be able to prevent the termination of the pension.  So please contact us if you need any assistance on this.


After working so hard to get the pension, we don’t want to see you lose it over an incorrect response to the VA on this letter.  We suspect that the VA will start on the 2011 filings in the near future.

This entry was posted on Thursday, June 5th, 2014 at 5:28 pm and is filed under General Legal, Veterans.