You can file this under the question I posed back in April.
Is the proposed look-back law good for veterans and surviving spouses?
I told you then that the VA was in the process of extending efficiency of communication between the Department and the IRS. At the time, I had started to see Department of Veterans Affairs letters that requested more extensive financial information based on IRS communication.
On its face, more VA accountability and protecting the integrity of Pension programs aren’t a bad thing. But the practical consequences of additional safeguards that bring to light unreported income and net worth isn’t without collateral damage.
Regardless of the amount of information the VA wants to see, or the documentation they require, the Department gives Pension recipients a limited period of time to furnish such information. VA letters that ask the recipient for several pages worth of information and documentation aren’t uncommon.
When the recipient, or more often a relative, is unable to submit all the necessary information, the VA terminates benefits and issues an over-payment. This draconian measure takes place regardless of whether the recipient is actually entitled to the benefit. Always remember, the VA is very serious about deadlines.
New Income Rules For Aid And Attendance?
How does more effective communication between the VA and the IRS affect original claims?
The VA is now asking applicants about interest earned from accounts liquidated prior to application. If you apply for Aid and Attendance in 2014, don’t be surprised when the VA wants to know about interest from the bank account you closed in 2013.
In the most recent letter I read, the VA asked about $13.00 in interest. They listed the account number and asked the applicant to explain the unreported income.
I have no doubt that all these new measures are preparation for a sometime-to-be-passed Look Back Law that dramatically and negatively affects veterans and surviving spouses.
I take no issue with the VA protecting their programs.
But I wonder if they realize or care how delays caused by increased reporting standards harm applicants.
Sometimes the above accountability technique will prevent unwarranted benefit payments. But just as often, and probably more often, the More Information letter will cause a delay that prevents an applicant from receiving an award letter.
When the surviving spouse who was eligible and would have received a retroactive payment dies before benefits are awarded, the VA keeps that money despite the fact that the spouse was entitled to benefits to assist with the expense of custodial care.
The new VA procedures are guaranteed to have a cooling effect on the Aid and Attendance benefit. New applicants will be discouraged from applying. Applicants who have already applied will be discouraged from furnishing the required information or, worse, believe that the unreported income makes them ineligible.
Applying for the Aid and Attendance benefit is soon to become more confusing and less appealing.