By Zach Bloxham, JD
Assisting Veterans and their spouses in planning for long-term care is one of the most professionally rewarding and emotionally satisfying experiences the practice of law can provide. This article introduces the five tests a claimant must meet to attain VA eligibility.
The Five Tests for VA Pension
The quantity of VA programs can be difficult to itemize and even more onerous to understand. Each benefit has its own purpose and eligibility criteria. This can lead practitioners to stick with what they know and ignore the helpful information that is readily available to them. Some of the programs, such as Dependency Compensation, are not means-tested. Others, such as VA Pension, have strict limitations that, if not met, will be a bar to a successful application. As such, the rules governing specific programs within the VA umbrella of benefits are distinct.
To qualify for VA pension benefits, a claimant must successfully navigate five inquiries: service, medical, income, asset, and transfer. Failure to satisfy one of these will cause the application to fail as a whole. Failure to meet some criteria can be overcome with proper planning; however, other failures are fatal to the claim, and no remedial measures are available.
1. Service Test
While all VA benefits have some level of service component to the analysis, VA Pension has a specific service regime that individual claimants must meet to garner eligibility. To meet the service requirement, a claimant must pass a three-pronged analysis: (1) the Veteran must have been discharged in circumstances other than dishonorable, (2) the Veteran must have served at least 90 days of active-duty service, and (3) the Veteran must have served at least one day of active service during a Congressionally-defined wartime period.
Veterans, spouses, family members, and even attorneys often prejudice potential claims by mistakenly assuming additional restrictions on the service test that do not exist in VA rules or regulations. For example, a Veteran’s discharge need not be explicitly specified as honorable. An alternative discharge, such as other or general, is sufficient to meet the standard. The prohibition is on a discharge that is dishonorable.
Additionally, the applicable wartime periods as defined by Congress do not parallel the dates of active hostility. This can lead to misunderstanding by potential claimants, who may believe that the Veteran must have either seen combat or have had boots on the ground to qualify. While the latter may be required for a small segment of Vietnam-era Veterans, the general rule is that the Veteran does not need to have been in theater to meet the service test for VA Pension.
2. Medical Test
A claimant can meet the basic pension requirements for the medical test by being aged 65 or older. The VA presumes that a claimant aged 65 or older is disabled for purposes of the benefit program. This might come as a shock to your client, but it also works to their benefit. Additional monthly pension benefits—Housebound and Aid and Attendance—are available to claimants with other health struggles. The latter is where practitioners should typically, rightly, spend their time to ensure the claimant can receive the highest award under the law.
To meet the medical test for Pension with Aid and Attendance, a typical claimant must be above age 65 and meet certain presumptions related to health status; namely, they must be blind or nearly so, a patient in a nursing home, or need the assistance of another person for the activities of daily living (ADLs). The ADLs considered in determining a Veteran’s eligibility for Aid and Attendance are outlined in the applicable regulations and include eating, bathing, dressing, toileting, and prosthetic adjustment, or protection from hazards incident to the Veteran’s daily environment due to mental or physical incapacity that requires care on a regular basis.
It is important to note that the medical test is not so binary as to make it difficult to ascertain. The regulation expressly states that a claimant is “not required” to demonstrate “all of the disabling conditions” outlined. The medical test is a query about the claimant’s “condition as a whole.” It is only necessary to establish that the claimant is “so helpless as to need regular aid and attendance, not that there be a constant need.”
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3. Income Test
VA regulations require an application for pension benefits to be denied if the claimant’s attributable income exceeds the statutory income limit.[3] A claimant’s income includes payments of any kind from any source unless explicitly exempt. Income for VA Purposes (IVAP) can be reduced by paying acceptable unreimbursed medical expenses (UMEs). UMEs are payments made by the claimant that are regular, recurring, and unreimbursed by any third party.
These UMEs are defined quite expansively,[3] encompassing care, medications, supplements, adaptive equipment, transportation expenses, insurance premiums, in-home caregiving, and expenses related to facility care such as in an assisted living, memory care, or nursing home facility. Long-term care costs can be used as a UME to reduce attributable income if the claimant is receiving nursing home care, custodial care at an assisted living facility, or similar care through in-home caregiving, as long as a medical professional recommends such care to provide the claimant with two activities of daily living or the assurance of a protective environment.
If a claimant’s IVAP exceeds the statutory income limit, or Maximum Annual Pension Rate (MAPR), then the claimant’s application will be denied. If the claimant’s IVAP can be reduced below the MAPR, minus a 5 percent deductible, the claimant will be eligible for benefits.
The VA Pension program is designed to reimburse claimants whose incomes are being swallowed up by the punishing costs of long-term care. Therefore, it is incumbent on the claimant to actually incur costs at a facility or at home prior to seeking the benefit. Having heard about the long wait times for VA pension claims, claimants mistakenly believe they can apply for pension benefits and then move into the long-term care facility after they are approved. The benefit does not work that way in practice.
4. Asset Test
The VA implemented a bright-line asset test known as a net worth limit in 2018. This limit increases every year by the same percentage that the Social Security Administration increases benefits to account for the rising cost of living. For 2026, the net worth limit is $163,69955,356. If a claimant has assets above the limit, they are ineligible for the VA pension benefit.
An important factor in assessing the asset test is to define what the VA considers an asset. A covered asset—a VA term of art with a defined term—is an asset that was part of the claimant’s net worth, was transferred for less than fair market value, and, if not transferred, would have caused, or partially caused, the asset test to be exceeded.
Net worth includes all property that an individual owns, including real and personal property, unless excluded, less the amount of encumbrance. Similar to long-term-care Medicaid eligibility criteria, a primary residence, vehicle, and personal property are exempt from the initial and continuing VA eligibility determination. However, important distinctions within the VA rules must be understood to provide the best counsel to potential claimants. For example, the VA exempts a primary residence regardless of value but limits the lot size to two acres. This means a residence may be exempt from VA while not being exempt from Medicaid—and vice versa.
The primary residence is not a covered asset for purposes of pension entitlement unless sold before a claim for benefits is approved, or, if sold after, the proceeds are not used to purchase another primary residence within the same calendar year. This rule can lead to difficult circumstances if the home is sold in November or December. It is incumbent upon the attorney to properly counsel clients seeking VA pension benefits while selling their primary residence.
5. Transfer Test
Federal regulations prohibit a claimant from transferring assets for less than fair market value in the three years preceding the date the VA receives an original or new claim. This three-year look-back on asset transfers works in tandem with the asset test, ensuring that an individual cannot be ineligible for being over the asset limit on a Monday, transfer all of their assets to a friend on a Tuesday, and be eligible for benefits on Wednesday.
For 2026, the VA has a penalty divisor of $2,874, meaning if $20,000 were gifted, the claimant would be ineligible for six months of benefits, as VA transfer penalties are rounded down to the nearest whole number. This penalty divisor is the same for all pension claimants, whether a single Veteran, surviving spouse, or married claimant. While a consistent penalty divisor provides a better outcome for the single Veteran and surviving spouse claimant, the value of the penalty divisor, particularly when compared to that of Medicaid, is vanishingly low, thereby imposing an even more burdensome regulatory penalty on Veterans and spouses.
Perhaps the linchpin to all VA pension planning as it relates to the asset and transfer tests is the dual foundational planning implications unique to the VA rules, namely that a noncovered asset may be transferred without regard to the transfer of asset restriction, and if the claimant’s assets are below the asset limit, those assets can be transferred without regard to the transfer of asset restriction. These two realities, giving the Veteran and spouse a large degree of flexibility in the rules, are distinct and give attorneys multiple options in assisting claimants in planning for pension benefits.
Conclusion
As the necessity for long-term care increases and the costs for such care continue to rise, there is a greater and more pronounced need for attorneys to assist wartime Veterans and spouses with claims for benefits. VA Pension with Aid and Attendance is a foundational program for those who need another person’s assistance and whose livelihoods—physically, mentally, emotionally, and financially—are at risk. A claimant who is seeking benefits under the VA Pension rules must meet and pass service, medical, income, asset, and transfer tests. An attorney who understands these rules can, in a very real sense, be the difference between a Veteran and a spouse qualifying for the benefits they so desperately need and have so valiantly earned and having those benefits fall by the wayside without a beneficiary to receive them.
1. M21-1, pt. III, subpart ii, ch. 6d; Benefit eligibility based on character of discharge, 38 C.F.R. § 3.12, https://www.ecfr.gov/current/title-38/chapter-I/part-3/subpart-A/subject-group-ECFRf5fe31f49d4f511/section-3.12. If service began after September 7, 1980, additional length of service may apply—usually two years of continuous service or the completion of the full service obligation if less than two years.
2. Periods of war, 38 C.F.R. § 3.2, https://www.ecfr.gov/current/title-38/chapter-I/part-3/subpart-A/subject-group-ECFRf5fe31f49d4f511/section-3.2. World War II (December 7, 1941↿–December 31, 1946); Korean War (June 27, 1950–January 31, 1955); Vietnam War (February 28, 1961–May 7, 1975 for those who served in the Republic of Vietnam; August 5, 1964–May 7, 1975 for everyone else); Gulf War (August 2, 1990–future date set by law).
3. M21-1 IX.i.3.A.1.a.
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