VA Look Back Rule Impacts Benefits

The VA look back rule changed in October 2018. Starting October 18, 2018, the VA imposed a new rule that negatively impacts Veterans and their families who are seeking benefits through a nursing home. In general, the new rule requires the disclosure of gifts. When a gift is made inside the new look back period, the VA calculates penalties and ineligibility periods. As a result, the look back rule for VA benefits has positive and negative implications.

Veterans and military families who transferred assets within three years of applying for benefits may unintentionally subject themselves to a 5 year waiting period. Depending on the gift, it might be preferable to wait three years when applying for certain benefits versus getting hit by a VA penalty. Even worse, the penalty period can start over as of the date of the last gift.

In other words, taking a lackadaisical strategy to veteran benefits can have long term consequences. Therefore, before spending down assets or making asset transfers, consider weighing long term implications with other processes that might offer more opportunity to protect assets.