What is the Asset / Net Worth Limit for Aid and Attendance Pension?

Up to December 1, 2019, a claimant for Aid and Attendance Pension cannot have a net worth of more than $127,061. This amount goes up every December 1 with inflation. Net worth is defined as assets plus IVAP (Income for VA Purposes).

The net worth limit for Pension or Survivor Pension entitlement is $127,061 for effective dates of payment starting December 1, 2018 through November 30, 2019. This limit is increased by the same percentage as the COLA in Social Security benefits each year on December 1 of each year and will parallel Medicaid's Community Spousal Resource Allowance (CSRA). The divisor for calculating the penalty period to be used for 2019 is $2,230 a month.

Definition of Net Worth and the Bright Line

Test Effective October 18, 2018, the Department of Veterans Affairs (VA), changed the net worth criteria for Pension claims. Net Worth on or after October 18, 2018 is the sum of a claimant's:


Please note when IVAP is a negative number, it is to be considered zero dollars. As a result, assets cannot be further reduced by negative income. Net worth can only be reduced to the extent that there is no income to add to the assets and thus if IVAP is zero, the net worth is the value of the assets alone. Also, the IVAP calculation is based on an initial application for Pension. This means that only reasonably predictable medical expenses can be subtracted from household gross income such as recurring insurance premiums, the recurring cost of paying caregivers or care services and possibility the recurring cost of renting medical devices.

Income for net worth purposes includes the income of the claimant and spouse or the income of a single surviving spouse.

VA calculates net worth when eligibility has been met and then only under the following conditions:


If the evidence shows that net worth exceeds the net worth limit, VA may decide the claim before determining if the claimant meets other entitlement factors. VA will notify the claimant of the entitlement factors that have not been established.

VA will deny or discontinue Pension if a claimant's or beneficiary's net worth exceeds the net worth limit. This is referred to as the Bright Line net worth test.

If the claimant does not meet other factors necessary for Pension entitlement, such as military service requirements, VA will deny the claim without calculating net worth.

Example 1 – The net worth limit is $127,061. A claimant has assets of $116,000, annual retirement income of $8,000, and annual predictable nursing home expenses of $29,000. Apply the nursing home expenditure to income, which decreases annual income to $0. Because income is $0, the claimant's net worth is $116,000; therefore, his/her net worth is not excessive for VA Pension.

Example 2 – The net worth limit is $127,061 and the maximum annual Pension rate (MAPR) is $13,535. A claimant has assets of $127,000 and annual retirement income of $10,000. The claimant pays reasonably predictable annual medical expenses of $9,000. In this case, medical expenses that exceed $676 (5% of the MAPR) are deductible from income. After applying the expenditures, annual income decreases to $1,659. Adding income to assets produces net worth of $127,324, which is over the bright line limit, barely. VA must deny the claim for excessive net worth.

Defining Assets

Assets are the fair market value of all property that an individual owns, including all real and personal property, unless excluded under 38 CFR 3.275(b). If the total value of an annuity or similar financial instrument is used when calculating the asset amount, VA does not include the monthly income derived from the same annuity or similar financial instrument when calculating income for net worth. This would result in double counting for calculating net worth.

Fair market value is the price at which an asset would change hands between a willing buyer and seller. VA will use the best available information to determine fair market value, such as inspections, appraisals, public records, and the market value of similar property. Fair market value is determined based on valuations at the time of application.

The following are rules for asset inclusion for net worth.

If the claimant is a veteran then the veteran's assets include the assets of the veteran as well as the assets of his or her spouse.

If the claimant is a surviving spouse, the assets include only the assets of the surviving spouse.

If the claimant is a surviving child and he or she has no custodian or is in the custody of an institution, the child's assets include only the assets of the child.

If a surviving child has a custodian other than an institution, the child's assets include the assets of the child as well as the assets of the custodian. If the child is in the joint custody of his or her natural or adoptive parent and a stepparent, the child's assets also include the assets of the stepparent.

VA will not consider a child to be a veteran's or surviving spouse's dependent child for Pension purposes if the child's net worth exceeds the net worth limit

The total value of an annuity, trust or other similar financial instrument is counted as an asset if the claimant establishes that he or she has the ability to liquidate the entire balance. For example if the entire asset is locked up in an irrevocable trust and unavailable, it is not an asset. Likewise if an income annuity is income only and has no feature to get to the original purchase amount, it is not an asset. Other such arrangements as limited partnerships, private stock or an installment sale would likely not have an option to sell or liquidate and as a result would also not be counted as assets.

If the claimant cannot liquidate the value of the annuity, trust or other similar financial instrument or information about the liquidity of an annuity is unavailable, VA counts the monthly income received as income for net worth purposes and excludes the financial instrument value from assets. The same would be true of any other financial arrangement that locks up the asset but produces income.

Exclusions from Assets

The value of a claimant's primary residence (single-family unit) – including 2 acres of residential lot area – in which the claimant has an ownership interest is excluded as an asset. VA recognizes one primary residence per claimant. If the residence is sold after Pension entitlement is established, any net proceeds from the sale is an asset except to the extent the proceeds are used to purchase another residence within the same calendar year as the year in which the sale occurred.

This rule concerning reinvesting proceeds from the sale of a house prior to the end of the calendar year is not reasonable. For example suppose the house sold in December. A new house would have to be purchased with the proceeds prior to the end of that month. When it initiated the rules changes, VA pointed out that this was an inevitable requirement. It has to do with not what is reasonable but what is already in the rules pertaining to counting assets during a calendar year. The asset from a sale must be counted by the end of the calendar year. VA argues that this rule is not as onerous as it seems. If a new house is purchased in February of the following year, the claimant only loses one month worth of benefit – the month of January.

VA will not include a claimant's primary residence as an asset even if the claimant resides in:


It is not spelled out if the claimant resides somewhere other than the primary residence and that place of residence is not a living arrangement associated with health care or custodial care, whether the primary residence is still exempt.

Rental income on a primary residence not occupied by the claimant or a dependent is countable income and sale of the property is a conversion of assets. If the property is sold while someone is on claim, this creates additional assets and may disqualify the claimant for receiving future benefits if the net worth limit is exceeded. If the claimant owns and resides in a multifamily dwelling, only the value of the unit actually occupied by the claimant is excluded from net worth.

The size of the residential lot area that can be excluded from net worth consideration is determined by the degree to which the property is connected to the dwelling and the typical size of lots in the immediate area. For claims received on or after October 18, 2018, residential lot area means the lot on which a residence sits that does not exceed 2 acres, unless the additional acreage is not marketable.

In some instances, a claimant's place of residence and place of business are the same. As an example, a farmer may live in a house on the farm or a grocer may live in an apartment over the store. In such cases, the value of the residence area must be considered separately from the value of the business area. The value of the residence area may be excluded. The value of the business area is considered an asset the same as any other business asset.

If the claimant lives on a farm which is not used for business purposes, VA will exclude the value of the residence area, including the lot allowance, and consider the rest of the farm as an asset. This rule can create a problem. Many individuals who live in rural areas have lots larger than 2 acres – sometimes up to 10 or 15 acres. In many cases, they do not use their acreage for farming. VA has recognized this dilemma for rural residents and generally proving a statement that the extra acreage cannot be sold is sufficient to allow an exception for the larger lot size.

State laws may provide that certain property is part of the claimant's homestead or exempt from the claims of creditors. Such homestead and exemption statutes are of no consequence in determining if the value of the property is to be considered part of a claimant's estate for VA purposes.

VA will not adjust countable assets other than the exempt primary residence by subtracting any mortgages or encumbrances from those countable assets that are attached to the primary residence.

The value of personal effects suitable to and consistent with a reasonable mode of life, such as appliances and family transportation vehicles are also exempt from counting as assets. VA will also exclude from assets any amount designated by statute as not countable as a resource, regardless of whether or not it is listed in 38 CFR §3.279 – the source of the rules above.

Determining the Value of Property and its Effect on Net Worth

When a claimant makes application, it may be necessary to determine the value of property for declaring net worth. Claimants who have held parcels of real estate for long periods of time may be unaware of current real estate prices, and greatly underestimate the value of their holdings. If it appears to an adjudicator that a claimant is underestimating the value of real property, the claimant will be asked to furnish evidence of the current market value of the real estate.

Acceptable sources of information about property value include a


For claims received on or after October 18, 2018, residential lot area means the lot on which a residence sits that does not exceed 2 acres, unless the additional acreage is not marketable. If the size of the residential lot area is not listed on the application, the adjudicator will request more information. As a general rule, a claimant's statement that additional acreage is not marketable will be accepted as fact, unless there is contradictory evidence in the record.


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