WEDNESDAY, JULY 23, 2014
J.J. Montanaro, a financial planner with USAA Bank, is an Army veteran who graduated from West Point. His father was a career Navy pilot who flew combat missions in Vietnam and retired with the rank of lieutenant commander. He was diagnosed years later with mesothelioma, a lung cancer traced to exposure to asbestos used on an aircraft carrier where he served.
The fatal disease was mercifully swift, Montanaro says, but after his fathers death, because he had been classified as 100% disabled by his service-connected ailment, Montanaros stepmother became eligible for a tax-free Dependent and Indemnity Compensation pension. But getting that spousal benefit is not automatic; she had to know it existed, and she had to apply for it.
There are 23 million veterans alive today in the United States. Many are from the nations recent wars in Iraq and Afghanistan, of course, but others served as long ago as World War II. Add in their wives and other immediate family members, and there are some 60 million people in the U.S. who are potentially eligible for some kind of medical or financial assistance from the Department of Veterans Affairs.
Yet only a fraction of this population is accessing the resources that Congress voted for veterans. In some cases, these resources could provide free medical care, loan backing for a home or even, in the case of a person with a recognized service-caused disability, a tax-free pension of up to $2,858 a month for a veteran living alone or $3,018 a month for a veteran and spouse. (These figures are for a 100% service-disabled veteran.) All too often, these potential benefits are ignored by financial advisors.
Part of the problem is that many of the benefits offered by the VAparticularly financial support payments are need-based, and the typical client of a financial advisor has far more than the $80,000 liquid asset limit, not to mention an income above the eligibility level.
ELIGIBILITY
What some advisors dont know, though, is that all non-reimbursed medical costs are deductible in calculating income. For example, for veterans who served during wartime and later became disabled and require aid either at home or in an institution, the VA can provide a pension supplement to bring net annual income up to $20,795 for a single veteran or $24,652 for a veteran and spouse. A veteran with a retirement pension of $50,000 might appear ineligible, but with the fully deductible cost of a doctor-ordered live-in home caregiver running at more than that, the person would be eligible for the full VA pension.
A client may tell an advisor that he or she is providing assistance to an elderly parent, but many advisors might not even think to ask if that parent is a veteran who might be eligible for VA income support.
Montanaro suggests that given the number of aging and disabled veterans, all advisors should make a point of going to the VAs website (VA.gov) to study up on all the benefits available. If there is a possibility that a client, or more often, a clients parents, might be eligible for assistance, he says, the client should be advised to see a city or county veterans affairs advocate (many counties or incorporated cities have such people on staff) or an expert at a veterans service organization (like the American Legion or Veterans of Foreign Wars), who will help file the often daunting paperwork at no charge.
You dont have to be an expert on veterans benefits, he says, but you need to know how to explore the eligibility of clients and their family members, and you need to know who to refer them to so they can apply for aid.
He adds, Family veteran status is not something that often comes up in a client interview, so its important for the advisor to ask the question.
Dave Lindorff has contributed to Businessweek, The Nation and Salon.com. His mother and father were both WWII veterans.
