GAO, ALFA Warn VA to Protect Senior Veterans from Financial Exploitation

The Veterans Administration needs to improve the qualifications process for its pension program to protect elderly veterans from poor estate and financial advice that could affect their ability to pay for their care, and to make sure that only veterans with financial need receive pension benefits, the Government Accountability Office (GAO) said in a report to Congress. 

Senior veterans face the danger of being misled by financial and estate planning services who are supposed to help them meet financial eligibility requirements for benefits. 

The GAO selected a sample of 25 organizations offering financial and estate planning services to elderly veterans and found that about half advised claimants to place their assets into some type of annuity. But some financial products, such as deferred annuities, may not be the best choice for elderly people because they may not be able to access funds needed for their care within their expected lifetime unless they pay high withdrawal fees. 


These products might also strip eligibility for Medicaid for a period of time, GAO points out. 

VA programs can help give senior veterans and their families more choices when they need long-term services but don’t need or want to enter an institutional setting, so it’s important to prevent exploitation, says senior living trade group the Assisted Living Federation of America (ALFA) in a statement to the U.S. Senate Special Committee on Aging for its Wednesday hearing on the GAO’s report.

“It is our view that if a financial advisor to a veteran in any way misleads a veteran and misrepresents the Aid and Attendance program to his or her advantage at the expense of the veteran, it is an insidious form of elder abuse. It should not be tolerated and those responsible should be sanctioned to the full extent of the law,” said Rick Grimes, president and CEO of ALFA, in a prepared statement. 


Grimes recommended setting clear eligibility standards for the VA benefit and creating guidelines for those who closely serve seniors, such as senior living community operators, along with requiring a “look-back period on veterans finances, similar to the Medicaid process. 

Unlike other means-tested programs, the VA doesn’t currently conduct a look-back review to determine whether a benefits applicant transferred assets below fair market value prior to applying, and doesn’t prohibit the practice.

In one case, a pension claimant transferred more than one million dollars less than three months before applying, and was granted benefits, the report said. But if the administration did adopt a similar look-back process, along with certain other determinations as to income and asset source, the VA could have more control in making sure only those in financial distress receive benefits. 

Read the GAO report and recommendations here

Written by Alyssa Gerace

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