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⭒ News & Notes Archive

September 2018

In this Issue

New VA Pension Rules Effective October 18, 2018

On September 18, 2018, the Department of Veterans Affairs (VA) published its final rules amending 38 CFR Part 3, regarding net worth, asset transfers and income exclusions for needs-based benefits.  These new regulations will become effective October 18, 2018 and will not apply to transfers made prior to October 18, 2018.  Thus, it would behoove anyone in need of needs-based VA pension and who might have assets in excess of the new net worth line to do planning before 10/18/18.

The proposed regulations were first published on January 23, 2015 and resulted in over 850 public comments.  The purported purpose of these regulations, according to the VA, is to “maintain the integrity of the pension program” and to respond to the recommendations made by the Government Accountability Office (GAO) in their 2012 report “Pension Poachers: Preventing Fraud and Protecting America’s Veterans,” decrying the predators that take advantage of veterans and sell annuities to “qualify” them for pension benefits. 

While the final regulations still include a bright-line net worth limit and lookback and penalty periods, some of the more onerous provisions in the proposed rules have been softened or eliminated.  Highlights include:

Net Worth – 38 CFR §3.274:  

  • Net Worth limit is equal to the CSRA under Medicaid – currently $123,600
  • Increases annually per Social Security COLA
  • Includes total of applicant’s or beneficiary’s annual income and assets
  • Includes assets of the spouse
  • Net worth calculated as of the date of the original claim; after a period of non-entitlement, or when VA receives information that net worth has changed

Assets – 38 CFR §3.275

  • Defined as fair market value of all real and personal property owned by the claimant and any dependents, less mortgages and other encumbrances
  • Home, plus “residential lot area” that does not exceed two acres excluded, unless the additional acreage is not marketable.
  • Veteran does not have to live in the home for it to be excluded
  • Personal effects – “suitable to and consistent with a reasonable mode of life, such as appliances and family transportation vehicles” – excluded

Transfers of Assets – 38 CFR §3.276

  • 36-month Lookback period triggered when there is a new claim or claim following a period of non- entitlement
  • Does not apply to transfers made prior to October 18, 2018
  • Only applies to “covered assets” i.e., asset that was part of claimant’s net worth, transferred for less than fair market value, and if not transferred, would have caused the net worth to be over the limit
  • Exceptions for transfers as a result of fraud or unfair business practices and for transfers to a trust established for a disabled child prior to age 18

Penalty Period – 38 CFR §3.276 (e)

  • Maximum period of ineligibility is 5 years (previous proposal was 10 years)
  • Starts the first of the month after the month last transfer was made
  • Based on the MAPR for A&A for a married Veteran divided by 12 and rounded down
  • Only the amount of assets transferred that exceeded the net worth subject to penalty
  • Penalized transfers can be cured by partial or total return of assets

Trusts and Annuities – 38 CFR §3.276 (a)(5) & (6)

  • Purchase of an annuity or transfers to a trust after 10/18/18 will be penalized unless veteran retains control and the ability to liquidate – BUT then counted as an asset and counted as part of Net Worth

Some Rules Clarified or Softened While the new regulations are by no means comforting to a veteran or his/her spouse who is in desperate need of aid and attendance, and the new rules will clearly be an impediment to the expeditious processing of applications, some of the harsher proposed rules have been clarified or softened. For example, the provisions for deductible medical expenses are more generous than the previously proposed rules; the limit on hourly rates for in-home care was eliminated; and payments for residential care or assisted living are still permissible. (38 CFR §3.278 Deductible Medical Expenses)

The Regulations Will Invite Abuse

Purportedly the revised rules “would reduce opportunities for financial advisors to provide advice for the restructuring of assets.”  This conclusion indicates a lack of awareness of the problem.  By complicating the application process even more than it is now to the degree that applicants will have to submit 3 years-worth of income and assets documentation, the terms of gifts, trusts, annuities, deeds, and whatever other information the VA deems important to determine whether a transfer constituted a transfer of a covered asset, the regulations create a new market for VA “benefits consultants” and estate planning attorneys.  Unfortunately, those most in need will be denied benefits because they will be unable to afford the hourly rate of these new “VA benefit experts.” Instead of proposing any rules to outlaw or punish the predators who take advantage of veterans and their spouses, the Department of Veterans Affairs has chosen to punish the veterans. If the goal is to deny claims and ask questions later, hoping that the veteran will die before getting any relief, these regulations should do the trick.

If you are involved in VA planning, better act soon. The new regulations can be found at:


Legislative Roundup: What Passed, What Didn’t

September 30 was the last day for Governor Brown to veto or sign bills that made it to his desk:

  • AB 3211 (Kalra) Advance Health Care Directives – signed into law! This bill increases the likelihood that adults who wish to make an anatomical gift are given the opportunity to do so. Thank you to everyone who sent letters of support.
  • AB 2233 (Kalra) Assisted Living Waiver – vetoed. This bill would have expanded the ALW program. While Governor Brown’s veto is disappointing, we thank everyone who called the Governor’s office and sent letters. With strong public approval and bipartisan legislative support, there’s a strong chance for success next year.
  • AB 2850 (Rubio) Online Nursing Assistant Training – signed into law. This bill undermines training requirements for certified nursing assistance (CNAs) by allowing all classroom training to be provided online.
  • AB 1953 (Wood) Related party transactions by skilled nursing facilities – signed into law. This bill would require nursing homes to submit profit and loss statements for related parties to the State under certain circumstances. 

State Seeks to Revoke Licenses of Oakmont Assisted Living Facilities that Abandoned Residents During a Deadly Fire Storm in Santa Rosa

In a bold action that sent a badly needed message to assisted living operators throughout California, the Community Care Licensing Division (CCLD) of the California Department of Social Services initiated legal action to revoke the licenses of two assisted living facilities operated by Oakmont Senior Living and ban their administrators from managing, operating, owning or working in California assisted living facilities for the rest of their lives. The CCLD actions are the culmination of a nearly year-long investigation involving Oakmont of Varenna and Villa Capri, neighboring assisted living facilities where the lives of hundreds of residents were endangered by deadly wildfires that erupted on the night of October 8-9, 2017. CCLD issued its findings and enforcement actions in an accusation dated September 4, 2018.

Key House Subcommittee Holds Hearing on Unsafe Conditions in Nursing Homes

On September 6, 2018, the Subcommittee on Oversight and Investigations of the U.S. House Committee on Energy and Commerce conducted an oversight hearing, Examining Federal Efforts to Ensure Quality of Care and Resident Safety in Nursing Homes. The hearing opened with statements from several Subcommittee members expressing concern on the longstanding nature of nursing home neglect and the lack of effective oversight. The members voiced concerns about neglect and abuse, lack of timely investigations, illegal evictions of residents, understaffing, poor emergency preparedness, the high incidence of harm in nursing home and the failure to detect it, excessive drugging and chemical restraint, the rolling back of federal regulations and fines, dangerous owners, and more.  A CMS witness stated it is taking steps to address key concerns, while witnesses from the GAO and OIG reported that abuse and neglect have been pervasive problems for decades and remain so. 

In the Nursing Home, Empty Beds and Quiet Halls

September 28, 2018 New York Times column explores why nursing home occupancy levels are dropping – nearly one in five beds nationally is empty – despite the booming number of elders as the population continues to age. It explains that this counterintuitive trend is driven by strong consumer desire to avoid nursing homes whenever possible and the increasing availability of options such as home care and assisted living facilities.

Managed Care Organizations Contracting with Lower Quality Nursing Homes in California

Nursing homes that are part of networks established by Cal MediConnect health plans in California are of questionable quality, according to new research findings published in September. The study found that, on average, network nursing homes scored lower on key quality measures, had more deficiencies and lower staffing levels than non-network nursing homes. Consequently, members of these health plans are more likely to be placed in lower quality nursing homes. Cal MediConnect is a demonstration program to manage and coordinate care for persons eligible for both Medicare and Medi-Cal.

Nursing Home Violation of the Month

Staff Person “Snaps” Video of Resident’s Genitals and Enjoys a Laugh:  A nursing aid at Monterey Palms in Palm Desert used a cell phone to record and post a social media video clip of an apparently sleeping resident’s genitals.  The video begins with the aid cracking “this is what we have to deal with every f—ing day” and then shows the resident lying in bed with no pants.  After a close-up of the resident’s genitals the aid and a licensed nurse, who was also in the room, are laughing.  The facility was fined $2,000 for this outrageous breach of trust and privacy.

Read the full citation HERE.


A Farewell Interview with Elder Advocate Professor Lillian Hyatt
By Lisa Kopochinski, NASWCA Editor

Professor Lillian Hyatt is a force to be reckoned with. At age 93 1/2 and nearly blind, this long-time elder care advocate is candid that her journey on earth is nearly over.

This is why she is adamant in her mission of letting as many people as possible know the injustices — particularly financial — that many seniors face unknowingly when they choose to move into a CCRC.A sterling example of empowerment, Professor Hyatt — who started her social work career later in life at the age of 58 after receiving her MSW from California State University, San Francisco in 1983 — became an adjunct professor of social work at SFSU. Throughout her career and to this day, she has inspired people to make a difference in numerous areas such as the substance abuse impact on families, interfaith understanding, nursing home standards and elder care.

Click the following link to listen to the 12-minute interview:

CANHR on the Move

CANHR staff attorneys, Tony Chicotel and Jody Spiegel, at the Wild World of Long Term Care Evictions trainings for legal services programs. The two trainings were hosted by Legal Aid Society of San Diego and by Greater Bakersfield Legal Assistance.