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how does selling a home affect VA benefits?

My mother and stepfather were placed into assisted living after both having medical issues. They insisted on keeping their house, in hopes of going home one day. To help pay for their care, we applied and received VA benefits. Now they are both in wheelchairs, but otherwise doing Ok. We must sell the house to keep paying for their care, there are no other assets. We feel they can both live many more years (for which we are grateful) but will probably need all the house benefits as well as the VA to keep them in assisted living and cover their drugs and supplemental insurance. We are not touching a penny. Is there a way to continue with the VA benefits without being dishonest after the house sells? It is a modest home, but over $80,000.

Status: Open    May 21, 2016 - 09:04 AM

VA Benefits

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Expert Answers

May 23, 2016 - 06:24 AM

You will have to report the sale or it will catch up with them eventually and put them into an overpayment situation with the VA. You will need to report the net proceeds from the sale. Essentially at the time the house sells I would resubmit the details to the VA regarding their medical expenses and income. Show the VA where the money is going and how that even though this chunk of money is here now that it will be spent within (X) months due to their medical expenses. Either way if the VA reduces their pension due to the assets generated by the home sale as soon as that money is almost gone you can reapply for the pension and get it reinstated. I would shy away from any estate planners who will shift assets around in order to maintain the pension as the VA is nearing a look back period similar to Medicaid and will bring penalties that could hurt you later. If you have further questions please let me know and I will help you as much as I can.


May 23, 2016 - 02:07 PM

Thanks so much! Great info. We had wondered about reapplying after the funds dwindle down. Don't want to cheat the system just want to make sure they can stay where they are as long as necessary. Thanks again!
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