VETERANS’ PENSION 

BENEFITS

Improvements Needed 

to Ensure Only 

Qualified Veterans and 

Survivors Receive 

Benefits

Report to Congressional Requesters

May 2012

GAO-12-540

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-540, a report to 

congressional requesters 

May 2012

VETERANS’ PENSION BENEFITS 

 

Improvements Needed to Ensure Only Qualified 

Veterans and Survivors Receive Benefits

Why GAO Did This Study

The VA pension program is intended to 

provide economic benefits to wartime 

veterans and survivors with financial 

need. GAO was asked to examine (1)

how the design and management of 

VA’s pension program ensure that only 

those with financial need receive 

pension benefits and (2) what is known 

about organizations that are marketing

financial products and services to 

enable veterans and survivors to 

qualify for VA pension benefits. GAO’s

study included a review of VA’s 

policies and procedures, site visits to 

VA’s three Pension Management 

Centers, and online research and 

interviews of organizations that market 

financial and estate planning services 

to help veterans and survivors qualify 

for VA pension benefits.

What GAO Recommends

Congress should consider establishing 

a look-back and penalty period for 

pension claimants who transfer assets 

for less than fair market value prior to 

applying, similar to other federally 

supported means-tested programs. 

VA should (1) request information 

about asset transfers and other assets 

and income sources on application 

forms, (2) verify financial information 

during the initial claims process, 

(3) strengthen coordination with VA’s 

fiduciary program, and (4) provide 

clearer guidance to claims processors 

assessing claimants’ eligibility. In its 

comments on this report, VA concurred 

with three of GAO’s recommendations 

and concurred in principle with one, 

citing concerns about the potential 

burden on claimants and recipients of

verifying reported financial information. 

VA agreed to study the issue further.

What GAO Found

The Department of Veterans Affairs’ (VA) pension program design and 

management do not adequately ensure that only veterans with financial need 

receive pension benefits. While the pension program is means tested, there is no 

prohibition on transferring assets prior to applying for benefits. Other meanstested programs, such as Medicaid, conduct a look-back review to determine if 

an individual has transferred assets at less than fair market value, and if so, may 

deny benefits for a period of time, known as the penalty period. This control helps 

ensure that only those in financial need receive benefits. In contrast, VA pension 

claimants can transfer assets for less than fair market value immediately prior to 

applying and be approved for benefits. For example, GAO identified a case 

where a claimant transferred over a million dollars less than 3 months prior to 

applying and was granted benefits. Also, VA’s process for assessing initial 

eligibility is inadequate in several key respects. The application form does not 

ask for some sources of income and assets such as private retirement income, 

annuities, and trusts. As a result, VA lacks complete information on a claimant’s 

financial situation. Also, the form does not ask about asset transfers—information 

VA needs to determine whether these assets should be included when assessing 

eligibility. In addition, VA does not verify all the information it does request on the 

form. For example, VA does not routinely request supporting documents, such as 

bank statements or tax records, unless questions are raised. VA’s fiduciary 

program, which appoints individuals to manage the financial affairs of 

beneficiaries who are unable to do so themselves, collects financial information 

that may affect some pension recipients’ eligibility, but VA pension claims 

processors do not have access to all this information. Further, guidance on when

assets should be included as part of a claimant’s net worth is unclear; and VA 

claims processors must use their own discretion when assessing eligibility for 

benefits, which can lead to inconsistent decisions. 

GAO identified over 200 organizations that market financial and estate planning 

services to help pension claimants with excess assets meet financial eligibility 

requirements for these benefits. These organizations consist primarily of financial 

planners and attorneys who offer products such as annuities and trusts. GAO

judgmentally selected a nongeneralizable sample of 25 organizations, and GAO 

investigative staff successfully contacted 19 while posing as a veteran’s son

seeking information on these services. All 19 said a claimant can qualify for 

pension benefits by transferring assets before applying, which is permitted under 

the program. Two organization representatives said they helped pension 

claimants with substantial assets, including millionaires, obtain VA’s approval for 

benefits. About half of the organizations advised repositioning assets into a trust, 

with a family member as the trustee to direct the funds to pay for the veteran’s 

expenses. About half also advised placing assets into some type of annuity. 

Some products and services provided, such as deferred annuities, may not be 

suitable for the elderly because they may not have access to all their funds for 

their care within their expected lifetime without facing high withdrawal fees. Also, 

these products and services may result in ineligibility for Medicaid for a period of 

time. Among the 19 organizations contacted, the majority charged fees, ranging

from a few hundred dollars for benefits counseling to $10,000 for establishment 

of a trust. 

View GAO-12-540. View related video clip.

For more information, contact Daniel Bertoni 

at (202) 512-7215 or bertonid@gao.gov. 
Page i GAO-12-540 Veterans’ Benefits

Letter 1 

Background 2

VA Pension Program Design and Management Do Not Ensure Only 

Those with Financial Need Receive Benefits 6

Many Organizations Help VA Pension Claimants Transfer Assets to 

Qualify for Benefits 15

Conclusions 22

Matter for Congressional Consideration 22

Recommendations for Executive Action 23

Agency Comments and Our Evaluation 23

Appendix I Objectives, Scope, and Methodology 26

Appendix II Full Transcript of Selected Calls with Organizations Providing Products 

and Services to Help Claimants Qualify for VA Pension Benefits 29

Appendix III Comments from the Department of Veterans Affairs 58

Appendix IV GAO Contact and Staff Acknowledgments 63

Related GAO Products 64

Table

Table 1: 2012 Maximum Annual Pension Benefit Limits 4

Figures

Figure 1: Section of Application Form Pertaining to Income and 

Assets 9

Figure 2: Excerpts from Websites of Organizations That Offer to 

Transfer Assets to Help Claimants Qualify for VA Pension 

Benefits 16

Contents
Page ii GAO-12-540 Veterans’ Benefits

Figure 3: Transcript Excerpts of Calls with Organizations Providing 

Products and Services to Help Claimants Qualify for VA 

Pension Benefits 17

Abbreviations

EVR Eligibility Verification Report

IVM Income Verification Match

PMC Pension Management Centers

SSA Social Security Administration 

SSI Supplemental Security Income

VA Department of Veterans Affairs

VBA Veterans Benefits Administration

View GAO Components

Video: Examples of Messages from Companies about Transferring 

Assets to Qualify for VA Pension Benefits

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-12-540 Veterans’ Benefits

United States Government Accountability Office 

Washington, DC 20548

May 15, 2012

The Honorable Patty Murray

Chairman

The Honorable Richard Burr

Ranking Member

Committee on Veterans’ Affairs

United States Senate

The Honorable Herb Kohl

Chairman

Special Committee on Aging

United States Senate

The Honorable Ron Wyden

United States Senate

The Department of Veterans Affairs’ (VA) pension program is intended to 

provide economic benefits to wartime veterans with financial need. It is 

available to veterans who are age 65 and older or who have disabilities that 

are unrelated to their military service, as well as to their surviving spouses 

and dependent children. To be eligible for VA pension benefits, a claimant 

must meet certain income and asset requirements. Recently, concerns 

have been raised that some organizations are marketing financial products

and other services to enable claimants whose assets exceed the pension 

program’s financial eligibility thresholds to qualify for these benefits. Also, 

these organizations may charge substantial fees for products and services 

that may not always be in claimants’ best long-term interests.

At your request, we reviewed VA’s pension program. Specifically, we 

examined (1) how the design and management of VA’s pension program 

ensure that only those with financial need receive pension benefits, and 

(2) what is known about organizations that are marketing financial 

products and services to veterans and survivors to enable them to qualify 

for VA pension benefits. To address our first objective, we reviewed 

relevant federal laws and regulations, as well as policies and procedures 

regarding how VA assesses financial eligibility for pension benefits. We 

interviewed officials from VA headquarters, as well as staff at VA’s three 

Pension Management Centers (PMC) to determine how these policies 

and procedures are applied. We also reviewed a nongeneralizable 

random sample of 85 pension claims that were entered into VA’s 

electronic case file system in fiscal year 2010, in which VA had to formally 

 
 

Page 2 GAO-12-540 Veterans’ Benefits

determine if the claimant met asset thresholds.1

We conducted this performance audit from July 2011 to May 2012 in 

accordance with generally accepted government auditing standards. 

These standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. Additional information on our 

scope and methodology is provided in appendix I.

To address our second 

objective, we conducted internet research and interviews with veterans’ 

advocacy groups, VA officials, and state and local officials to identify 

organizations that market financial and estate planning services to help

veterans and surviving spouses qualify for VA pension benefits. We 

contacted some of these organizations to obtain their views on the types 

and suitability of the products and services they provide. In addition, we 

judgmentally selected 25 organizations to contact where our investigative 

staff posed as the son of an 86-year-old veteran, to obtain first-hand 

information about the types of products and services provided, and 

associated costs for a potential pension claimant. The 25 organizations 

were judgmentally selected to achieve geographic dispersion and include 

both financial planners and attorneys. Based on availability, we had 

discussions with representatives of 19 of these organizations.

In fiscal year 2011, VA provided about $ 4.3 billion in pension benefits for 

about 517,000 recipients. These benefits are available to low-income 

wartime veterans who are age 65 and older, or who are under age 65 but 

are permanently and totally disabled as a result of conditions unrelated to 

their military service.2

 

1

Our sample was nongeneralizable because not all pension claims where VA had to 

determine if the claimant met asset thresholds had been entered into VA’s electronic case 

file system in fiscal year 2010.

Surviving spouses and dependent children may 

also be eligible for these benefits. At the end of fiscal year 2011, about 

2

VA currently administers three pension programs, commonly referred to as Improved 

Law Pensions (Pub. L. No. 95-588, 92 Stat. 2497), Prior Law Pensions (Pub. L. No. 86-

211, 73 Stat. 432), and Old Law Pensions (Pub. L. No. 73-2, 48 Stat. 8). About 95 percent 

of all pension recipients are under the Improved Pension program, and new beneficiaries 

can only accede to this program. We will focus on the Improved Pension program in this 

report. For veterans with service-connected disabilities, VA provides cash benefits through 

its disability compensation program.

Background
 

Page 3 GAO-12-540 Veterans’ Benefits

314,000 pension recipients were veterans and about 203,000 were 

survivors. Also, about 329,000 recipients were over 65 and the average 

age was 71 for veterans and 79 for survivors. Average annual payments 

in fiscal year 2011 were $9,669 for veterans and $6,209 for survivors.

VA provides pension benefits through its Veterans Benefits Administration 

(VBA), and accredits representatives of veterans’ service organizations, 

attorneys, and claims agents to assist claimants with the preparation and 

submission of VA claims at no charge.3 To become accredited, an 

individual must meet certain requirements set forth in federal law.4 Claims 

processors assess claims at VBA’s three Pension Management Centers 

(PMC) in Philadelphia, Penn.; Milwaukee, Wis.; and Saint Paul, Minn. As 

part of the pension program, VA provides enhanced pension benefit 

amounts to veterans and surviving family members who demonstrate the 

need for aid and attendance, or who are considered permanently 

housebound.5

To qualify for pension benefits, claimants’ countable income must not 

exceed annual pension limits that are set by statute. These income limits 

are also the maximum annual pension payment that a beneficiary may 

receive. Such limits may vary based on whether claimants are veterans or 

survivors and their family composition, as well as whether claimants need 

aid and attendance or are considered housebound. For example, to 

qualify for pension benefits in 2012, a veteran with no dependents and 

who is in need of Aid and Attendance benefits cannot have income that 

exceeds $20,447, while a surviving spouse in similar circumstances 

For pension beneficiaries who are deemed unable to 

manage their affairs due to mental impairments, VA appoints a fiduciary 

to manage the beneficiary’s finances.

 

3

See 38 U.S.C. §§ 5901-5904. 

4

Id.

5

Veterans may be eligible for Aid and Attendance benefits if they demonstrate an inability 

to perform everyday personal functions such as bathing, dressing, eating, adjusting 

prosthetic devices, and protecting themselves from hazards or dangers in their daily 

environment. They may also be eligible for these benefits if they are a patient in a nursing 

home, bedridden, or are blind or nearly blind. Veterans may be eligible for Housebound 

benefits if they have a disability rated at 100 percent and, as a result, are permanently or 

substantially confined to their homes, or have a disability rated at 100 percent and at least 

one other disability rated at 60 percent or more (although these individuals are legally 

classified as housebound, they may be able to leave their homes). See GAO, VA 

Enhanced Monthly Benefits: Recipient Population Is Changing, and Awareness Could Be 

Improved, GAO-12-153 (Washington, D.C.: Dec. 14, 2011).
 

Page 4 GAO-12-540 Veterans’ Benefits

cannot have an income that exceeds $13,138. In determining if a 

claimant’s income is below program thresholds, VA includes recurring 

sources of income such as the Social Security Administration’s (SSA) 

retirement and disability benefits, but not income from public assistance 

programs such as Supplemental Security Income (SSI). VA also allows 

some expenses, such as certain unreimbursed medical expenses that 

exceed 5 percent of the maximum pension amount the claimant is eligible 

for, to be deducted from a claimant’s countable income. The annual 

amount pension beneficiaries receive is the difference between their 

countable income and the maximum pension amount they would be 

eligible for (see table 1).6

Table 1: 2012 Maximum Annual Pension Benefit Limits

Type of benefit

Limit for veteran with 

no dependents

Limit for veteran with 

one dependent

Limit for surviving 

spouse with no 

dependents 

Limit for surviving 

spouse with one 

dependent

Pension without Aid and 

Attendance or 

Housebound benefit

$12,256 $16,051 $8,219 $10,759

Pension with Housebound 

benefit

14,978 18,773 10,046 12,582

Pension with Aid and 

Attendance benefit

20,447 24,239 13,138 15,673

Source: GAO analysis of information from VA website.

VA’s policy manual specifically states that the pension program is not 

intended to protect substantial assets or preserve an estate for a 

beneficiary’s heirs. In assessing financial eligibility for pension benefits, 

VA also considers net worth or the total value of claimants’ assets, such 

as bank accounts, stocks, bonds, mutual funds, and any property other 

than the claimant’s dwelling, a reasonable lot area, a vehicle, and 

personal belongings.7

 

6

Certain veterans who receive nursing home or domiciliary care at the government’s 

expense are only eligible for no more than $90.00 per month in pension benefits.

There are no thresholds on the value of a 

7

See 38 C.F.R. § 3.275. For claimants who are veterans, VA also assesses the net worth 

of the veteran’s spouse to determine financial eligibility.
 

Page 5 GAO-12-540 Veterans’ Benefits

claimant’s assets that are defined in statute.8 However, according to VA’s 

procedures manual, claims processors are generally required to formally 

determine if claimants with assets worth over $80,000 have financial 

resources that will last a reasonable period of time to pay for their basic 

expenses. In making this determination, claims processors consider net 

worth, income, expenses, age, and life expectancy to determine if 

claimants’ financial resources are sufficient to pay for their expenses 

without assistance from VA. Ongoing eligibility for pension recipients who 

previously reported any income other than, or in addition to, Social 

Security income is also assessed. These recipients must complete an 

annual Eligibility Verification Report (EVR), which requests information on 

income and assets, that is used to determine if recipients continue to be 

financially eligible for the pension program.9

Potential VA pension recipients may also be eligible for other meanstested programs. For example, they may be eligible for Medicaid, a joint 

federal-state health care financing program that provides coverage for 

long-term care services for certain individuals whose income and 

resources do not exceed specific thresholds. Each state administers its 

Medicaid program and establishes specific income and resource eligibility 

requirements that must fall within federal standards, but we reported in 

2007 that in most states, an individual must have $2,000 or less in 

countable financial resources to be eligible.10 Similarly, the SSI program 

provides cash benefits to individuals who are age 65 or older, blind, or 

disabled, and who have limited income and whose financial resources are 

$2,000 or less ($3,000 if the individual lives with their spouse).11

 

8

The relevant statute states that a veteran’s pension shall be denied “when the corpus of 

the estate of the veteran or, if the veteran has a spouse, the corpus of the estates of the 

veteran and of the veteran’s spouse is such that under all the circumstances, including 

consideration of the annual income of the veteran, the veteran’s spouse, and the veteran’s 

children, it is reasonable that some part of the corpus of such estates be consumed for the 

veteran’s maintenance.” 38 U.S.C. § 1522(a).

9

38 C.F.R. § 3.277.

10GAO, Medicaid Long-Term Care: Few Transferred Assets before Applying for Nursing 

Home Coverage; Impact of Deficit Reduction Act on Eligibility Is Uncertain, GAO-07-280 

(Washington, D.C.: Mar. 26, 2007).

11Individuals in some states who require long-term care services can become eligible for 

Medicaid benefits through participation in the SSI program.
 

Page 6 GAO-12-540 Veterans’ Benefits

We found several potential vulnerabilities in the VA pension program’s 

design, as well as in VA’s policies and procedures, that hinder the 

department’s ability to ensure that only those in financial need receive 

benefits. More specifically, the program allows claimants to transfer 

assets prior to applying for benefits, and VA lacks complete information 

on claimants’ finances, relies on self-reported information, and does not 

utilize all opportunities for coordination within the agency. Additionally, 

guidance that claims processors use may be unclear. Despite being 

means-tested, the program currently permits VA pension claimants to 

transfer assets and reduce their net worth prior to applying for these 

benefits.12 Federal regulations state that, when evaluating financial 

eligibility for pension benefits, assets gifted to someone that does not 

reside in the claimant’s household will reduce the claimant’s net worth if 

all rights of ownership and control of the assets have been relinquished.13

As a result, prior to applying for benefits, claimants can transfer excess 

assets to someone outside their household to meet the financial eligibility 

criteria for VA pension benefits and be approved, as long as they no 

longer retain ownership or control of the assets.14 For example, we 

identified a case involving a pension recipient who transferred over a 

million dollars in assets into an irrevocable trust less than 3 months prior 

to applying for these benefits.15

 

1238 C.F.R. § 3.276(b).

VA was aware of the asset transfer when 

13Id.

14Assets gifted to a family member in the pension claimant’s household do not reduce the 

claimant’s net worth.

15An irrevocable trust is one that cannot be terminated by the individual who set up the 

trust once it is created. Black’s Law Dictionary (8th ed. 2004).

VA Pension Program 

Design and 

Management Do Not 

Ensure Only Those 

with Financial Need 

Receive Benefits

Program Allows Claimants 

to Transfer Assets Prior to 

Applying, Unlike Other 

Means-Tested Programs
 

Page 7 GAO-12-540 Veterans’ Benefits

this pension claim was approved and did not count the trust as part of the 

claimant’s net worth. Although these types of transfers are generally

permitted under law for the pension program, this practice is not 

consistent with other federal means-tested programs and weakens the 

pension program’s goal of supporting those with financial need.

In contrast, for Medicaid—another means tested program—federal law 

explicitly restricts eligibility for coverage for long term care for certain 

individuals who transfer assets for less than fair market value prior to 

applying.16,17 As a result, when an individual applies for Medicaid 

coverage for long-term care, states conduct a look-back—a review to 

determine if the applicant transferred assets for less than fair market 

value prior to applying. Individuals who transfer assets for less than fair 

market value during the 60 months prior to applying may be denied 

eligibility for long-term care coverage for a period of time, known as the 

penalty period.18 For example, gifting assets would generally be 

considered a transfer of assets at less than fair market value and would 

result in a penalty period. Also, under the SSI program, claimants who 

transfer assets for less than fair market value prior to applying may 

become ineligible for these benefits for up to 36 months.19

 

1642 U.S.C. § 1396p(c). 

17An asset transfer at less than fair market value would occur when the claimant gifts or 

sells a resource and gets in return an amount that is less than the value of the resource on 

the open market at the time of the transfer.

18The penalty period is calculated by dividing the uncompensated dollar value of the 

assets transferred by the average monthly cost of private nursing home care in the state 

(or in the community, at the option of the state). The penalty period generally begins on 

the later of (1) the first day of the month during or after which the individual transferred 

assets at less than fair market value, or (2) the date on which the individual would have 

been eligible for Medicaid coverage for long-term care if it were not for these asset 

transfers. Certain asset transfers are exempt from Medicaid penalty provisions such as a 

home transferred to an individual’s spouse or disabled child. Asset transfers would also 

not be penalized if the individual can demonstrate that the transfer was carried out 

exclusively for purposes other than qualifying for Medicaid, or when the state determines 

that the penalty would result in undue hardship. 42 U.S.C. § 1396p(c).

1942 U.S.C. § 1382b(c)(1)(A).
 

Page 8 GAO-12-540 Veterans’ Benefits

VA lacks complete information on claimants’ finances because the forms 

used to assess financial eligibility do not prompt applicants to report 

certain types of income and asset information. While the instructions on 

the pension application forms ask claimants to report all income sources 

and assets they own,20 the forms do not provide spaces for claimants to 

report some types of income and assets. For example, even though 

elderly pension claimants may receive private monthly retirement income, 

such as income from a company’s retirement plan, the application forms 

do not specifically provide space for claimants to report such income. 

According to SSA, in 2009, 9 percent of the aggregate income of those 

age 65 and older consisted of private pension income.21

The application forms do provide a space to report other income sources 

not specifically itemized on the forms. However, some claims processors 

we spoke with said claimants who report an amount in that space do not 

usually specify the source of this income, or if this amount represents a 

single or a combination of income sources. As a result, they have to 

follow up with the claimant to obtain this information, which delays the 

processing of these claims.

Similarly, although the application forms specifically ask claimants to 

report assets such as bank accounts, stocks, and real property, the forms 

do not ask about other common assets such as annuities and trusts, 

which need to be considered when VA assesses claimants’ financial 

eligibility. (See figure 1 to view the section of the application form 

pertaining to income and assets.)22

 

20VA has one pension application form for veterans and another form for surviving 

spouses and dependents.

We found cases where claimants did 

not report assets that they are not specifically asked to report. For 

example, in one case a claimant did not report a trust with assets valued 

at about $575,000. In another case, a claimant did not report a trust worth 

21Social Security Administration, Fast Facts and Figures about Social Security 2011

(Washington D.C.: August 2011). 

22An annuity is a financial instrument that provides income over a defined period of time 

for an initial payment of principal. An immediate annuity provides income immediately after 

the initial lump-sum payment. For a deferred annuity, the initial investment accumulates 

interest over a specified period of time before payments begin to be received. A trust is an 

arrangement in which a grantor transfers property to a trustee with the intention that it be 

held, managed, or administered by the trustee for the benefit of the grantor or certain 

designated individuals. 

VA Lacks Complete 

Information on Claimants’ 

Finances
 

Page 9 GAO-12-540 Veterans’ Benefits

about $612,000. In contrast, we reviewed several state application forms 

for Medicaid long-term care benefits that specifically asked individuals to 

report information about annuities and trusts they may own, as well as 

retirement income.

Figure 1: Section of Application Form Pertaining to Income and Assets

VA’s application forms also do not provide a specific space for claimants 

to report asset transfers, even though the instructions on the veterans’ 

application form ask claimants to disclose this information. Asset transfers 

to someone outside the claimant’s household are allowed under the 

pension program, as long as the claimant relinquishes ownership and 

control of the asset. However, VA still needs to know about any asset 

transfers when assessing a claimant’s financial eligibility because, 
 

Page 10 GAO-12-540 Veterans’ Benefits

consistent with VA’s regulations, the department must determine whether 

the claimant retains ownership and control of the transferred asset and if 

this asset should be counted as part of the claimant’s net worth. Without a 

designated space to report this type of information, claimants may not 

report asset transfers on the application forms. For example, we saw one 

case where a veteran transferred assets worth about $500,000 into an 

irrevocable trust 2 weeks prior to applying and did not report this on the 

application. VA learned of this asset transfer because the claims 

processor inquired about how the claimant’s medical expenses were 

being paid. If the claims processor had not identified these assets and 

determined that they should be included in the claimant’s net worth, 

because the claimant had not relinquished all ownership and control, the 

claim could have been approved. Application forms that do not 

specifically request information about certain income sources and assets, 

as well as asset transfers, may prevent VA from obtaining complete 

information about claimants’ financial situation to properly assess their 

eligibility for pension benefits.

When assessing pension claimants’ eligibility, VA relies primarily on selfreported financial information that, unlike other means-tested programs, is 

not independently verified.23

 

23We reported a similar finding in GAO, Veterans Benefits: Improved Management Would 

Enhance VA’s Pension Program, 

VA does not require claimants to submit 

documents that corroborate self-reported financial information with their 

application, such as bank statements and tax returns. VA also does not 

require receipts to verify some types of claimed deductible expenses, 

even though these expenses may be a factor that enables some pension 

claimants to qualify for benefits. Without independent verification of selfreported financial information, VA will have difficulty detecting fraudulent 

claims. We identified cases where VA found individuals were advised by 

third parties to claim expenses they did not incur related to assistance 

with everyday living activities. For example, we saw one claim that was 

prepared by a financial planner in which $1,700 in monthly caregiver 

payments to a daughter were claimed. The claimant subsequently stated 

to VA that he did not pay his daughter any caregiver fees. In another 

case, a pension recipient claimed an attorney advised him to claim he 

was paying his son $1,000 per month for services that were not being 

provided in order to be eligible for a higher pension rate. The recipient 

GAO-08-112 (Washington D.C.: Feb. 14, 2008).

VA Relies on Self-Reported 

Information, and 

Verification Processes Are 

Incomplete
 

Page 11 GAO-12-540 Veterans’ Benefits

subsequently withdrew this claimed medical expense. Most claims 

processors we spoke with said they accept self-reported financial 

information unless questions arise, and in those cases, supporting 

documentation may be requested. In contrast, some state Medicaid 

programs and the SSI program require applicants to submit documents 

that support some reported financial information, such as bank 

statements and tax returns.

VA also does not make use of existing opportunities to verify self-reported 

financial information during the initial eligibility determination. For 

example, VA conducts computer matches to verify reported income from 

SSA benefits during the initial claims assessment process but is not using 

this type of technology to verify the accuracy of other self-reported 

financial information. Additional automated systems may be available that 

would enable VA to independently verify financial information during the 

initial eligibility assessment. For example, while VA performs a data 

match with Internal Revenue Service and SSA data to assess ongoing 

eligibility, it does not perform this match at the time of the initial claims 

assessment. In addition, for the SSI program, SSA recently implemented 

the Access to Financial Institutions system that allows the program to 

electronically request and receive records from financial institutions and 

verify an applicant’s or recipient’s financial information. Similarly, 

Medicaid requires states to implement an asset verification system for 

assessing applicants’ and recipients’ financial eligibility.24

VA’s efforts to verify ongoing eligibility for pension benefits also have 

some shortcomings. Pension recipients who have previously reported 

income in addition to, or other than, Social Security income must annually 

complete an EVR. However, like the application forms, the EVRs do not 

provide spaces for claimants to report private retirement income, 

annuities, trusts, or asset transfers, and self-reported financial information 

is not independently verified unless the claims processor has questions. 

In addition, because not all pension recipients complete an EVR, VA may 

not be able to identify potential changes in the financial situation of 

recipients that may affect their ongoing eligibility for these benefits.

Other efforts to verify ongoing eligibility may not be effective in identifying 

ineligible pension recipients. VA’s Income Verification Match (IVM) 

 

2442 U.S.C. § 1396w.
 

Page 12 GAO-12-540 Veterans’ Benefits

program uses a computer match to compare income reported to VA by 

pension recipients for a given year with SSA earned income data and IRS 

unearned income data for that year, to determine if these recipients have 

any unreported income. However, there is about a 15-month lag between 

when a pension recipient reports income and when the IVM can be 

conducted, and the delay may be even longer. For example, in 2011, VA 

was completing IVMs for income information that was reported in 2007.

As a result, improper payments may be made to ineligible pension 

recipients for at least over a year, but possibly several years, before the 

error is detected. In one case we reviewed, a beneficiary, who was 

approved for benefits in 2004 and reported $900 in net worth when he 

applied, had stocks worth over $162,000 at that time, which was only 

identified through the IVM process in 2007. This created an overpayment 

of over $18,000 that VA eventually waived.25 In addition to the IVM not 

being conducted in a timely manner, the match does not identify any 

assets that do not generate income, such as deferred annuities for which 

payments have not begun. Therefore, the IVM would not be effective in 

identifying these types of assets. Ultimately, delays in the IVM process 

prevent VA from promptly detecting improper pension payments and 

increase the magnitude of these payments.

Opportunities for coordination between VA’s pension and fiduciary 

programs to identify ineligible pension recipients are not always 

maximized.26

 

25VA regulations set forth that overpayments will not be collected when it is determined 

that collection would be “against equity and good conscience.” 38 C.F.R. § 1.962.

According to VA officials, over half of VA beneficiaries in the 

fiduciary program are pension recipients. Field examiners in this program 

visit beneficiaries and fiduciaries, and prepare reports that may contain 

financial information of some pension recipients. Claims processors had 

access to these reports, but VA issued guidance in July 2011 that 

restricts pension claims processors from accessing them in VA’s 

electronic case file system. VA determined that claims processors did not 

need to review fiduciary program reports as part of their daily work. This 

guidance was issued due to concerns about the privacy of fiduciaries’ 

personal information, and concerns that pension recipients in the fiduciary 

26VA’s fiduciary program appoints and monitors third parties to help manage and protect 

the funds of VA beneficiaries who are unable to manage their own affairs due to mental 

impairments. Fiduciaries can be a spouse or other family member, or an entity such as a 

law firm, hospital, or nursing home. See 38 U.S.C. § 5502.

Opportunities for Internal 

Coordination Are Not 

Maximized
 

Page 13 GAO-12-540 Veterans’ Benefits

program were being put under greater scrutiny. However, fiduciary field 

exam reports may contain information on beneficiaries’ finances that 

could be useful for claims processors in assessing eligibility for pension 

benefits. While safeguarding fiduciaries’ personal information is important, 

access to these reports allows claims processors to obtain a more 

accurate picture of a beneficiary’s financial situation. As a result, critical 

information to identify potentially ineligible individuals is not received, 

which may result in improper payments. Fiduciary program staff must 

notify the pertinent PMC when they identify information that may affect 

the ongoing eligibility of a pension recipient for these benefits, such as 

changes in a recipient’s income and assets. Claims processors generally 

rely on notification from fiduciary program staff about possible financial 

ineligibility of pension beneficiaries, since these claims processors no 

longer have direct access to those documents. A VA official from one of 

the PMCs told us that when claims processors had access to field exam 

reports prior to the issuance of the new guidance, cases of asset 

transfers or unreported assets were identified from reviews of these 

reports, even when there was no prior notification from fiduciary program 

staff. In addition, as part of our case file review, we identified cases of 

asset transfers or unreported assets that were identified in fiduciary field 

exam reports. Without access to field exam reports from the fiduciary 

program, claims processors may not have all available information to 

assess an individual’s financial eligibility.

VA’s guidance to claims processors on assessing financial eligibility for 

VA pension benefits is unclear about when certain assets should be 

counted as part of an applicant’s net worth. As a result, claims processors 

may make inconsistent eligibility decisions. For example, VA’s procedures 

manual states that the value of any property owned by pension claimants 

must be considered when assessing financial eligibility for benefits, but 

the manual does not specifically discuss when or under what 

circumstance annuities or trusts should count as part of net worth. 

According to VA officials, and consistent with VA regulations, the decision 

as to whether an asset should be counted in a claimant’s net worth 

depends on whether the claimant has ownership and control of the asset. 

However, VA has not adequately defined the concept of ownership and 

control of assets in either its regulations or internal guidance and policy 

documents. As a result, VA cannot ensure that claims processors are 

making fully informed eligibility decisions that are consistent with VA 

policy.

Unclear Guidance on 

Assessing Financial 

Eligibility May Lead to 

Inconsistent Decisions
 

Page 14 GAO-12-540 Veterans’ Benefits

Several claims processors we spoke with confirmed that guidance on 

assessing net worth is unclear, and that it is difficult to determine when to 

count certain assets. For example, one claims processor expressed 

uncertainty whether to count trusts established for children residing 

outside of a claimant’s household when the funds are being used to pay 

for claimant’s expenses, since VA’s regulations do not directly address 

these types of cases. A VA official acknowledged that guidance on what 

constitutes ownership and control of an asset could be improved. We 

were provided local training material from one PMC on when to count 

assets in a trust and found that it seemed inconsistent with VA’s 

regulations regarding when to count assets. For example, the PMC 

training material stated that a claim involving assets transferred into a 

trust a claimant cannot access would likely be denied due to excess net 

worth. However, as we noted earlier, VA regulations indicate that assets 

gifted to someone outside a claimant’s household should not be counted 

as part of net worth if ownership and control of the asset has been 

relinquished. Also, according to VA officials we spoke with, claims 

processors do not have access to VA attorneys who could assist them in 

examining trust agreements and other documents to determine if a 

claimant has ownership and control of an asset.

Unclear or disparate guidance about counting assets as part of net worth 

may also lead to different decisions in similar cases. For example, we 

saw two separate cases in which, just prior to applying, claimants 

transferred excess assets into trusts to which they did not have access. 

One of the claims was approved, but the other was denied. For the 

approved claim, VA determined the claimant did not have ownership and 

control of the trust and therefore did not count it in the veteran’s net 

worth. For the denied claim, VA also determined that the claimant did not 

have access to the trust, but the claim was denied because the claims 

processor felt the applicant was attempting to manipulate assets to qualify 

for benefits. The denial letter to the claimant explained that VA’s income 

programs are not intended to protect substantial assets or build up the 

beneficiary’s estate for heirs.

Further, we found that VA also lacks specific guidance on how to 

determine whether or not a claimant’s financial resources are sufficient to 

meet their basic needs without the pension benefit. VA’s procedures 

manual states that pension claims should be denied if a claimant’s 

financial resources are sufficient enough to pay for their living expenses 

for a “reasonable period of time,” but it does not define this term. As a 

result, claims processors must use their own discretion to determine what 

period of time is reasonable for claimants to use their assets before 
 

Page 15 GAO-12-540 Veterans’ Benefits

needing the assistance of the VA pension. Among case files we reviewed, 

we found inconsistent claims decisions for claimants whose financial 

resources would last about the same amount of time and who had similar 

life expectancies. For example, two veterans whose net worth was 

projected to provide for their needs for 2 years received different 

decisions on their claims based on this net worth. In this instance, a 90-

year-old with a life expectancy of 4.4 years was denied benefits, while a 

94-year-old with a life expectancy of 3.2 years was approved. Also, when 

we presented a hypothetical scenario of a claimant whose financial 

resources would last a specific amount of time, different processors at the 

same PMC gave differing opinions about whether the claimant should be 

approved for benefits.27

We identified over 200 organizations located throughout the country that 

market their services to help veterans and surviving spouses qualify for VA 

pension benefits by transferring or preserving excess assets.28

 

27We asked claims processors at VA’s three PMCs whether they would approve or deny a 

claim involving an applicant with a life expectancy of 10 years whose net worth would be 

depleted in 5 years.

These 

organizations consist primarily of financial planners and attorneys offering 

products and services such as annuities and the establishment of trusts, to 

enable potential VA pension claimants with excess assets to meet financial 

eligibility criteria for VA pension benefits. For example, one organization 

marketed on its website that it develops financial plans which include 

various insurance products, and that its specific area of expertise is to help 

VA pension claimants with hundreds of thousands of dollars in assets 

obtain approval for these benefits. Also, a law firm we identified marketed 

transferring excess assets into special trusts to enable VA pension 

28See appendix I for an explanation of how we identified these organizations.

Many Organizations 

Help VA Pension 

Claimants Transfer 

Assets to Qualify for 

Benefits

Over 200 Organizations 

Market Services to Help 

Qualify Veterans and 

Surviving Spouses for VA 

Pension Benefits
 

Page 16 GAO-12-540 Veterans’ Benefits

claimants to qualify for these benefits. These services being marketed and 

provided by these organizations are legally permissible under program 

rules because current federal law and regulations allow VA pension 

claimants to transfer assets and reduce their net worth prior to applying for 

benefits. (See figure 2 for excerpts from websites of organizations that offer 

to transfer assets to help claimants qualify for pension benefits.)

Figure 2: Excerpts from Websites of Organizations That Offer to Transfer Assets to 

Help Claimants Qualify for VA Pension Benefits

During our investigative calls to 19 organizations, all of them correctly 

pointed out that pension claimants can legally transfer assets prior to 

applying. These organizations indicated that it is possible to qualify for VA 

pension benefits despite having excess assets, and almost all provided 

information on how to transfer these assets. (See figure 3 for transcript 
 

Page 17 GAO-12-540 Veterans’ Benefits

excerpts of calls with organizations on services they provide to qualify for 

VA pension benefits.)29

Figure 3: Transcript Excerpts of Calls with Organizations Providing Products and Services to Help Claimants Qualify for VA 

Pension Benefits

Note: To hear additional audio excerpts from the three phone calls, go to 

http://www.gao.gov/multimedia/video#video_id=590696. 

A number of different strategies may be used to transfer pension claimants’ 

excess assets so that they meet financial eligibility thresholds. Among the 

19 organizations our investigative staff contacted, about half advised 

transferring excess assets into an irrevocable trust with a family member as 

the trustee to direct funds to pay for the veteran’s expenses. About half 

 

29Representatives’ quotes in figure 3 are not from organizations whose websites are 

quoted in figure 2.
 

Page 18 GAO-12-540 Veterans’ Benefits

also advised placing excess assets into some type of annuity. Among 

these, several advised placing excess assets into an immediate annuity 

that generates income for the client. In employing this strategy, assets that 

VA would count when determining financial eligibility for pension benefits 

are converted into monthly income. This monthly income would fall below 

program thresholds and enable the claimant to still qualify for the benefits. 

About one-third of the organizations recommended strategies that included 

the use of both annuities and trusts. For example, one organization we 

contacted advised repositioning some excess assets into an irrevocable 

trust, with the son as the trustee, and placing remaining excess assets into 

a deferred annuity that would not be completely accessible, since most of 

the funds could not be withdrawn without a penalty. In addition, several 

organization representatives we interviewed also told us they may advise 

using caretaker agreements to enable a client to qualify for VA pension 

benefits. Organizations told us this strategy generally involves the pension 

claimant transferring assets to family members as part of a contract, in 

exchange for caretaker services to be provided by these family members 

for the remainder of the claimant’s lifetime.

Some organization representatives we interviewed told us that 

transferring assets to qualify for VA pension benefits is advantageous for 

elderly pension claimants because it enables them to have more income 

to pay for care expenses and remain out of a nursing home for a longer 

period of time. For example, representatives from one organization said 

the use of immediate income annuities allows pension claimants to 

increase their monthly income that, combined with the VA pension, could 

help pay for assisted living or in-home care costs. Other financial 

planners and attorneys said if claimants do not conduct financial or estate 

planning to qualify for the VA pension and instead spend down their 

assets prior to applying, the monthly amount of the pension benefit they 

eventually receive may be insufficient to pay for their long-term care. 

They said that, as a result, these claimants may decide to seek Medicaid 

coverage for nursing home care because of their lack of financial 

resources, when they could have remained in an assisted living facility or 

at home with the aid of the VA pension. Some of these organizations told 

us that nursing home care financed by Medicaid is more costly for the 

government than if the veteran had received the VA pension benefit and 

obtained care in a lower-cost assisted living facility.

Many organizations we identified also conduct presentations on VA 

pension benefits at assisted living or retirement communities to identify 

prospective clients. According to attorneys and officials from state attorneys 

general offices we spoke with, managers of assisted living facilities or 
 

Page 19 GAO-12-540 Veterans’ Benefits

retirement communities may have an interest in inviting organization 

representatives to conduct presentations on VA pension benefits because 

these benefits allow them to obtain new residents by making the costs 

more affordable. For example, we obtained documentation indicating that 

one retirement community paid an organization representative a fee for a 

new resident he helped the facility obtain. Another community in another 

state paid organization representatives fees to assist residents in 

completing the VA pension application.

Some products may not be suitable for elderly veterans because they 

may lose access to funds they may need for future expenses, such as 

medical care. To help elderly clients become financially eligible for VA 

pension benefits, some organizations may sell deferred annuities, which 

would make the client unable to access the funds in the annuity during 

their expected lifetime without facing high withdrawal fees, according to 

some attorneys we spoke with. An elderly advocacy organization 

representative we spoke with also noted that elderly individuals are 

impoverishing themselves by purchasing these products when they may 

need the transferred assets to pay for their long-term care expenses. As 

part of our investigative work, one organization provided a financial plan 

to qualify for VA pension benefits that included both an immediate annuity 

as well as a deferred annuity for an 86-year-old veteran that would 

generate payments only after the veteran’s life expectancy.

Some organizations that assist in transferring assets to qualify people for 

VA pension benefits may not consider the implications of these transfers 

on eligibility for Medicaid coverage for long-term care. Individuals who 

transfer assets to qualify for the VA pension may become ineligible for 

Medicaid coverage for long-term care services they may need in the 

future. For example, asset transfers that may enable someone to qualify 

for the VA pension program, such as gifts to someone not residing in a 

claimant’s household, the purchase of deferred annuities, or the 

establishment of trusts, may result in a delay in Medicaid eligibility if the 

assets were transferred for less than fair market value during the 60-

month look-back period. According to several attorneys we spoke with, 

some organization representatives are unaware or indifferent to the 

adverse effects on Medicaid eligibility of the products and services they 

market to qualify for the VA pension. As a result, potential pension 

claimants may be unaware the purchase of these products and services 

may subsequently delay their eligibility for Medicaid.

Some Products and 

Services May Adversely 

Affect Claimants
 

Page 20 GAO-12-540 Veterans’ Benefits

In addition to the potential adverse impact of transferring assets, we 

heard concerns that marketing strategies used by some of these 

companies may be misleading. According to several attorneys we spoke 

with, some organization representatives market their services in a way 

that leads potential pension claimants and their family members to 

believe they are veterans advocates working for a nonprofit organization, 

or are endorsed by VA. As a result, they may fail to realize these 

representatives are actually interested in selling financial Products. For 

example, some organization representatives may tell attendees during 

presentations at assisted living facilities that their services consist of 

providing information on VA pension benefits and assisting with the 

application, and do not disclose they are insurance agents selling 

annuities to help people qualify for these benefits. One elder law attorney 

we spoke with said that many attendees at these presentations may have 

Alzheimer’s disease or dementia, and are not in a position to make 

decisions about their finances. Therefore, they are vulnerable to being 

convinced by these representatives that they must purchase a financial 

product to qualify for these benefits.

Concerns have also been raised that VA’s accreditation of individuals to 

assist with applying for VA benefits may have unintended consequences. 

According to attorneys and officials in one state, organization 

representatives use their VA accreditation to assist in preparing claims as 

a marketing tool that generates trust and allows them to attract clients. 

Claimants may not understand that this accreditation only means that the 

individual is proficient in VA’s policies and procedures to assist in 

preparing and submitting VA benefits claims, and does not ensure the 

Products and services these individuals are selling are in claimant’s best 

interests.

Finally, some organizations may provide erroneous information to clients, 

or fail to follow through on assisting them with submitting the pension 

application, which can adversely affect pension claimants. For example, 

one veteran said he was told by an organization representative to sell his 

home prior to applying for the VA pension and that he did not have to 

report the proceeds from the sale on the application. He followed this 

advice, but VA identified these assets, which caused him to incur a debt 

to VA of $40,000 resulting from a benefit overpayment. Organizations 

may also promise assistance with the application process to any 

interested pension claimant but, unbeknownst to the claimant, may not 

follow through in providing this service if the claimant does not want to 

transfer assets. For example, the daughter of a veteran we spoke with, 

who sought application assistance from an organization representative, 
 

Page 21 GAO-12-540 Veterans’ Benefits

told us the representative never submitted her father’s pension claim to 

VA as promised. She learned of this about a year after she thought the 

claim was submitted and had to reapply through a county veterans 

service officer. Her father was approved 2 months later but passed away 

less than a month after his approval. She believes her father could have 

received benefits for a year if the representative had submitted the claim, 

and believes he did not do so because she did not want to use his 

services to transfer assets.

The costs of services provided by these organizations to assist in 

qualifying for VA pension benefits varied, but organizations may be 

charging prohibited fees. Among the 19 organizations our investigative 

staff contacted for this review, about one-third said they did not charge for 

their services to help claimants qualify for VA pension benefits. For 

example, financial planners told us that, generally, there are no direct 

costs associated with transferring assets into an annuity, but that costs 

would be included in the terms of the annuity, such as the commission 

earned by the insurance agent. Among organizations that did charge for 

services, fees ranged from a few hundred dollars for benefits counseling 

to up to $10,000 for the establishment of a trust. Also, although federal 

law prohibits charging fees to assist in completing and submitting 

applications for VA benefits, representatives from veterans advocacy 

groups and some attorneys we spoke with raised concerns that these 

organizations may be charging for fees related to the application, or find 

ways to circumvent this prohibition, such as by claiming they are charging 

for benefits counseling. For example, one organization our investigative 

staff contacted charged $850 to have an attorney work on the application 

process, a $225 analysis fee, and $1,600 for the establishment of a trust. 

Another organization representative indicated he charged a “long-term 

planning fee” of $1,200 to be paid prior to services being provided. The 

organization representative asked that someone other than the veteran 

pay this fee, claiming that only disinterested third parties can be charged 

fees but not the veteran. In addition, concerns have been raised that fees 

charged may be excessive for the services provided. In July 2011, 

California enacted a law generally prohibiting unreasonable fees from 

being charged for these services.30

 

30See Cal. Civ. Code § 1770(a)(24). An “unreasonable fee” is defined as a fee that is 

exorbitant and disproportionate to the services performed.

Costs for Services to 

Transfer Assets Varied, but 

Some Organizations May 

Be Charging Prohibited 

Fees
 

Page 22 GAO-12-540 Veterans’ Benefits

The VA pension program provides a critical benefit to veterans, many of 

whom are elderly, who have only limited financial resources to support 

themselves. Current federal law allows veterans to transfer significant 

assets prior to applying for a VA pension and still be approved for benefits, 

but this arrangement seems to circumvent the intended purpose of the 

program and wastes taxpayer dollars. Without stronger controls over asset 

transfers, similar to other means-tested programs like Medicaid’s look-back 

and penalty period, VA cannot ensure that only those with financial need 

receive pension benefits. As a result, VA pension claimants who have 

sufficient assets to pay for their expenses can transfer these assets and 

qualify for this means-tested benefit. Moreover, because VA’s policies and 

procedures for assessing the initial financial eligibility of pension claimants 

do not adequately ensure that only veterans and surviving spouses who 

meet financial eligibility requirements are granted benefits, the program is 

vulnerable to abuse. In particular, claims processors’ reliance on unverified 

self-reported information when assessing eligibility means that VA cannot 

be assured that it is obtaining all relevant financial information from 

claimants, including information on asset transfers, trusts, annuities, and 

other forms of retirement income. Without all this information, claims 

processors may improperly grant pension benefits to claimants who do not 

meet financial eligibility requirements. In addition, while safeguarding 

fiduciaries’ personal information is important, the lack of adequate 

coordination between VA’s pension and fiduciary programs may result in 

missed opportunities to identify financially ineligible pension claimants, 

further undermining program integrity. Finally, because VA’s guidance 

concerning when assets should be counted as part of a claimant’s net 

worth and how to evaluate a claimant’s net worth in determining eligibility 

lack sufficient clarity, the program remains vulnerable to inconsistent 

interpretation and payments to ineligible individuals. Ultimately, in this era 

of constrained financial resources, VA has a responsibility to manage 

limited funds wisely, and help ensure continued public support for this 

important program.

To ensure that only those in financial need are granted VA pension 

benefits, Congress should consider establishing a look-back and penalty 

period for claimants who transfer assets for less than fair market value 

prior to applying, similar to other means-tested programs.

Conclusions

Matter for 

Congressional 

Consideration
 

Page 23 GAO-12-540 Veterans’ Benefits

To improve VA’s ability to ensure that only veterans and surviving 

spouses with financial need receive VA pension benefits, the Secretary of 

Veterans Affairs should direct the Undersecretary for Benefits to take the 

following four actions:

1. Modify pension application forms, as well as EVR forms, to include 

space for claimants or recipients to report asset transfers, and to 

specify annuities, trusts, or private retirement income. For assets, 

such as annuities and trusts that are reported, forms should also 

request related documentation to enable claims processors to 

determine if claimants or recipients retain ownership and control of 

these assets.

2. For all claimants, verify financial information during the initial claims 

assessment process. This may include requesting supporting 

documentation such as bank statements and tax returns, or using 

automated databases that can verify financial information.

3. Strengthen coordination between pension and fiduciary programs to 

identify pension claimants or recipients who have transferred or 

unreported assets, such as allowing claims processors access to 

fiduciary field exam reports for these cases.

4. Revise the VA procedures manual to better define the concept of 

ownership and control to help claims processors determine when 

specific types of assets such as annuities and trusts should be 

counted as part of net worth, and establish a more specific criteria for 

what is considered a reasonable period of time for pension claimants 

to use up their financial resources before becoming eligible for 

pension benefits.

We provided a draft of this report to the Secretary of Veterans Affairs for 

review and comment. In its comments (see app. III), VA generally agreed 

with our conclusions, concurred with three of our recommendations, and 

concurred in principle with one other recommendation. 

The agency concurred with our recommendation to modify pension 

application and eligibility verification forms to include a space for 

claimants or recipients to report asset transfers, to specify annuities, 

trusts, and private retirement income, and to request related supporting 

documentation.

Recommendations for 

Executive Action

Agency Comments 

and Our Evaluation
 

Page 24 GAO-12-540 Veterans’ Benefits

VA concurred in principle with our second recommendation that the 

department verify financial information during the initial claims process. 

VA noted, however, that conducting this verification would add additional 

time to adjudicate pension claims. VA said it expects to complete an 

analysis by November 1, 2012 of whether financial information can be 

verified without placing undue burdens on claimants and recipients. We 

acknowledge that rigorous verification processes can sometimes entail 

additional time during the initial claims phase, but we continue to believe 

that such verification is an important part of ensuring that VA adequately 

balances its stewardship responsibilities with its service activities. We 

support the analysis VA is undertaking.

Regarding our recommendation to strengthen coordination between the 

pension and fiduciary programs, VA concurred and noted that it has 

established a workgroup that is developing procedures to further enable 

fiduciary program staff to share income information with pension program 

staff.

VA also concurred with our recommendation that the procedures manual 

be revised to better define the concept of ownership and control of assets 

and to establish a more specific criteria for what is considered a 

reasonable period of time for claimants to use their financial resources 

before becoming eligible for pension benefits. VA stated that it is drafting 

regulations that would address the effect on eligibility of transferring 

assets prior to applying for pension benefits. They noted these 

regulations would address and clarify the various factors VA uses to 

determine whether a claimant’s net worth precludes eligibility for pension 

benefits and would provide a more consistent set of rules for adjudicating 

claims. They added that upon completion of the rulemaking proceeding 

VA will amend its manual provisions consistent with the new regulations 

and provide the procedures to implement them. They expect to complete 

this revision by December 1, 2013.

While VA did not directly comment on GAO’s Matter for Congressional 

Consideration related to establishing a statutory look-back and penalty 

period, VA did note that “unlike Medicaid and SSI, the statutes governing 

VA’s pension program lack provisions addressing the effects of transfers 

of assets on eligibility for program benefits, e.g., a look-back and penalty 

period.” VA asserted that after identifying gaps in VA’s regulations on this 

point, it has begun drafting regulations to address the issue. VA noted in 

its comments that any regulations it promulgates on this issue will be 

subject to challenge in the U.S. Court of Appeals for the Federal Circuit. 

While we commend VA’s efforts in this area, having a clearer statutory 
 

Page 25 GAO-12-540 Veterans’ Benefits

basis for this regulatory effort may help ensure that the regulations, 

should they be finalized, would be more likely to withstand potential legal 

challenges in the courts.

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies of this report to the 

appropriate congressional committees, the Secretary of Veterans Affairs, 

and other interested parties. The report is also available at no charge on 

GAO’s website at http:/www.gao.gov. 

If you or your staff members have any questions concerning this report, 

please contact me at (202) 512-7215 or bertonid@gao.gov. Contact 

points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this report. Staff members who made key 

contributions to this report are listed in appendix IV.

Daniel Bertoni

Director, Education, Workforce,

and Income Security Issues 
Appendix I: Objectives, Scope, and 

Methodology

Page 26 GAO-12-540 Veterans’ Benefits

The objectives of our review were to examine (1) how the design and 

management of the Department of Veterans Affairs’ (VA) pension 

program ensure that only those with financial need receive pension 

benefits and (2) what is known about organizations that are marketing 

financial products and services to veterans and survivors to enable them 

to qualify for VA pension benefits.

To determine how the design and management of VA’s pension program 

ensure that only those with financial need receive pension benefits, we 

reviewed relevant federal laws and regulations, as well as VA’s policies, 

procedures, and guidance regarding how VA assesses financial eligibility 

for pension benefits. We examined VA’s pension application forms and 

other documents VA uses to collect financial information from pension 

claimants or recipients. Also, we visited VA’s three PMCs in Philadelphia, 

Milwaukee, and St. Paul, and interviewed staff and officials from these 

locations as well as from VA’s central office. To verify how VA assesses 

the net worth of pension claimants, we conducted a review of a 

nongeneralizable random sample of 85 of the total of 3,196 fiscal year 

2010 pension claim files completed by each of the PMCs that were 

entered in VA’s electronic case file system, in which VA had to formally 

determine if the claimant’s assets were excessive to be approved for 

pension benefits. We also reviewed pension claims files VA provided us 

that involved asset transfers or unreported income and assets. In 

addition, we reviewed past GAO reports on VA’s pension program, 

Medicaid coverage for long-term care, and the Supplemental Security 

Income program, as well as relevant federal laws and regulations to learn 

how these other means-tested programs assess financial eligibility of 

claimants.

To determine what is known about organizations that are marketing 

financial products and services to veterans and survivors to enable them 

to qualify for VA pension benefits, we conducted an Internet search and 

interviews with stakeholders to identify organizations that market financial 

products and services to help veterans and surviving spouses meet the 

eligibility criteria for VA pension benefits. For our Internet search, we used 

the following search terms “Veterans Affairs and Pension Benefits,” 

“Veterans Affairs and Aid and Attendance Benefits,” and “Veterans Affairs 

and Pension and Aid and Attendance Benefits.” We applied three criteria 

when we examined the content of the websites obtained from our results 

to develop a list of organizations that market these services. To be 

included in our list, the organization’s website must indicate they provide 

services to help someone qualify for VA pension benefits or assess 

eligibility for VA benefits, and either indicate they provide products such 

Appendix I: Objectives, Scope, and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology

Page 27 GAO-12-540 Veterans’ Benefits

as annuities or trusts to transfer assets or indicate they provide services 

to protect or preserve assets. In addition to our Internet search, we also 

included in our list several organizations that met these criteria that we 

identified through interviews with veterans advocacy groups, state 

officials, and attorneys. In applying these criteria, we developed a list of 

over 200 organizations that market these services. We used a 

methodology where two analysts had to agree that the organization met 

the criteria.

Our investigative staff contacted a judgmental sample of 25 of the 

organizations on our list posing as the son of an 86-year-old veteran with 

over $300,000 in countable assets who is interested in applying for VA 

pension benefits. The 25 organizations were judgmentally selected to 

achieve geographic dispersion and include both financial planners and 

attorneys. For these calls, we sought to identify the types of products 

being marketed, their terms and costs, and the effect on the veterans’ 

access to their assets. The addresses for the main offices of the 

companies selected represent 13 different states that encompass about 

one-half of the veteran population age 65 and older. These states also 

include three states that represent one-fourth of the veteran population 

age 65 and older. Of the 25 companies contacted, our investigative staff 

was able to have a discussion with a representative for 19 of these 

organizations. For the other six companies, we either did not receive a 

response to a phone message or our phone calls to the organization were 

not answered.

To learn more about the types of products and services that may be 

provided to enable someone to meet the financial eligibility criteria for VA 

pension benefits, we also interviewed attorneys and financial planners, as 

well as representatives from the National Association of Insurance 

Commissioners. To identify the implications of transferring assets to 

qualify for VA pension benefits, we spoke with attorneys, representatives 

of veterans and elderly advocacy groups, state and local government 

officials, and family members of pension claimants that we were referred 

to who used the services of organizations to apply for these benefits. To 

learn about any investigations involving the practices of some of these 

companies, we spoke with officials from VA’s Office of Inspector General 

and officials from state attorneys general offices in California, Iowa, 

Montana, Oregon, Pennsylvania, Texas, and Washington.
Appendix I: Objectives, Scope, and 

Methodology

Page 28 GAO-12-540 Veterans’ Benefits

We conducted this performance audit from July 2011 to May 2012 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Full Transcript of Selected Calls 

with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 29 GAO-12-540 Veterans’ Benefits

The Department of Veterans Affairs (VA) provides pension benefits to 

eligible veterans and surviving spouses whose income and assets are 

below program thresholds. However, current VA regulations permit 

claimants to transfer excess assets prior to applying. Organizations 

market financial Products and services to help prospective pension 

claimants transfer excess assets and become financially eligible for these 

benefits. An investigator from our Forensic Audits and Investigative 

Service team had phone conversations with representatives from 19 of 

these organizations to learn if the organization would transfer a claimant’s 

excess assets, the types of services provided, and any fees charged. 

(See appendix I for more information on our scope and methodology.) 

Because VA’s pension benefits are meant for claimants with financial 

need, we selected portions of three of these calls that show organizations 

transfer significant assets to help claimants qualify for the benefits, and 

the types of services they provide to do so. The full transcripts of these 

three calls are provided below.

Call 1: Caller is a GAO investigator phoning on behalf of his 

fictitious 86-year-old father who was a veteran, seeking VA pension 

benefits, who wants to learn about the services provided by the 

company. The company representative describes how his father can 

qualify for these benefits, despite having significant assets.

(Whereupon, an outgoing call was placed by the GAO investigator to a 

company representative.)

COMPANY REPRESENTATIVE: [name].

GAO INVESTIGATOR: Hello?

COMPANY REPRESENTATIVE: Hello, this is [name].

GAO INVESTIGATOR: Hey, [name], this is [name].

COMPANY REPRESENTATIVE: Hey, [name], how are you doing?

GAO INVESTIGATOR: I’m doing good. I got your messages. I’m sorry, it’s just 

been a little nuts.

COMPANY REPRESENTATIVE: Not a problem.

GAO INVESTIGATOR: You still there?

COMPANY REPRESENTATIVE: Yeah, I’m here. Yes.

Appendix II: Full Transcript of Selected Calls with 

Organizations Providing Products and Services to 

Help Claimants Qualify for VA Pension Benefits 
Appendix II: Full Transcript of Selected Calls 

with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 30 GAO-12-540 Veterans’ Benefits

GAO INVESTIGATOR: I was calling — it’s your brother or your brother-in-law 

that I spoke to?

COMPANY REPRESENTATIVE: My brother-in-law.

GAO INVESTIGATOR: Yeah, I’m trying to make a decision here with my father. 

We are going to have to, you know, make some decisions on what we’re going to do with 

him. And I just wanted to see, you know, before we go draining all his resources, what our 

options are.

COMPANY REPRESENTATIVE: Okay. You don’t — he’s not in a community yet 

or he is?

GAO INVESTIGATOR: He’s not, he’s still living at his house.

COMPANY REPRESENTATIVE: Okay.

GAO INVESTIGATOR: But, you know, he’s got a lot of, you know, physical 

limitations, he’s got difficulty hearing, and he can’t really move around, so you know – 

COMPANY REPRESENTATIVE: Did his doctor say he needs assistance from 

another person on a regular basis?

GAO INVESTIGATOR: Well, I imagine. I mean, I didn’t ask that question, 

specifically, but I’m sure he would. I mean, right now, you know, we’re kind of trying to 

take care of him ourselves, and you know, we’ve got somebody helping, but we’re going 

to need something more full time.

COMPANY REPRESENTATIVE: Yeah. You guys are helping out with cooking, 

cleaning. Is he still able to drive or no?

GAO INVESTIGATOR: No.

COMPANY REPRESENTATIVE: Okay. So he needs transportation. You know, 

these are the things they are looking for. Did you say his vision is an issue?

GAO INVESTIGATOR: No, his hearing, is what I said.

COMPANY REPRESENTATIVE: (Laughter) I’m sorry.

GAO INVESTIGATOR: And his, not yours.

COMPANY REPRESENTATIVE: (Laughter) Well, maybe mine, a little bit. 

Anyhow, yeah, the VA kind of looks at, you know, daily activities — the activities of daily 

living. And if he can’t do some of those things, he needs assistance, you know, then he 

can qualify for the benefit.

They don’t mean if somebody is completely bedridden or handicapped, they just 

mean if somebody needs assistance and help with some parts of their life.
Appendix II: Full Transcript of Selected Calls 

with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 31 GAO-12-540 Veterans’ Benefits

What we would be able to do – we have people that are still able to drive and live 

at home, but they can’t do certain — they can’t carry the bags from the car if they go 

grocery shopping, because they don’t have the dexterity or the strength.

GAO INVESTIGATOR: All right.

COMPANY REPRESENTATIVE: So, you know, the VA looks at it and says, they 

can’t even go shopping for themselves, they can’t carry the bags from the car, they can’t 

lift them, you know, how are they going to get them into the house?

GAO INVESTIGATOR: Well, I’m sure that’s not a problem. I mean, he definitely 

is, you know, he needs help with just going to the bathroom, getting in and out of bed and 

stuff like that.

COMPANY REPRESENTATIVE: Yeah. He needs help getting in and out of bed, 

getting to the bathroom, those are the things they’re looking at. Absolutely, he needs this 

assistance, and he can qualify for the benefit.

And everything else is just about preparing yourself for the benefit, doing the 

paperwork and so forth.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: And that a process, in and of itself. What I 

would suggest is get together, you know. This is — this doesn’t— this isn’t like a one-time 

sit-down and it’s all done, you know. This can take several weeks, and sometimes even 

up to six weeks, to get all the paperwork completed.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: So you know, but it’s a matter of getting 

started. You know, and that’s what I — you know, if your dad needs assistance, and he 

was a wartime Veteran, we can get him the benefit. All right?

GAO INVESTIGATOR: Okay. Well, you know what, my big concern – [inaudible] 

yeah, you know, which I mentioned to your brother-in-law is, um — you know, he’s got 

some assets, and I don’t know how that affects things.

COMPANY REPRESENTATIVE: You know, the assets come into play, and 

that’s part of the process. We would explain all that to you – what, what — where you 

need to go, how — what needs to be done.

Ideally, an accredited attorney that we – that we work with, he’ll have that 

conversation with you. He’ll explain that to you in more detail.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: But anyone — and I will just tell you this. The 

VA allows you to qualify, regardless of what your assets are. And I’ve had people with 

over a million dollars qualify for this benefit.
Appendix II: Full Transcript of Selected Calls 

with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 32 GAO-12-540 Veterans’ Benefits

GAO INVESTIGATOR: Wow.

COMPANY REPRESENTATIVE: So you know, you’ll hear you can only have this 

much money, you can do this. You’ll even be told you don’t qualify.

GAO INVESTIGATOR: And how do you do that, though, I mean, that’s what I 

don’t understand.

COMPANY REPRESENTATIVE: Well, you have to reposition the assets, that’s 

all. You know, like I said, that’s — that’s part of what the attorney will talk about.

From a process standpoint, I’ll gather all the information that we need from you, 

what will go on the VA application. And we will get a letter back from our VA-accredited 

attorney, and he will outline and tell you you do or you don’t qualify.

Some people qualify immediately; other people, like in your situation, if your 

family has some assets, you may have to jump through some hoops in order to get the 

benefit.

But the VA outlines it and says, this is what you’re allowed to do, in order to 

qualify.

And, you know, we’ll share that with you. We’ll show you exactly what you need 

to do, how to do it, because it has to be done a certain way in order to qualify.

Look at this as kind of something you’re going to do one time, all right? This isn’t 

like doing your taxes, you know, where you need to remember it to understand it for next 

year.

You are going to do this once, and it’s going to be out of your life.

GAO INVESTIGATOR: Okay. Here’s a question that I have. Does he still have 

control of the assets?

COMPANY REPRESENTATIVE: Your family will.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: Yeah, your family will. I mean, all his money, 

his monthly money, will go right into his checking account, just like it probably does, Social 

Security, pension, whatever. The VA benefit will go right into his checking account. All that 

money will keep going right into his account, and he will have access to that.

GAO INVESTIGATOR: Okay, all right. Okay, just so I understand it, so you’re 

just talking about putting it under a different name or are you putting it in a special 

account?

COMPANY REPRESENTATIVE: [name], here’s the thing. I can’t get into all that 

with you over the phone.
Appendix II: Full Transcript of Selected Calls 

with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 33 GAO-12-540 Veterans’ Benefits

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: It will get so complicated and so confusing. 

This conversation that I need to have with you will take about an hour, just to get the 

process started, and then we will get into all that stuff.

Every person I have tried to help with this benefit, when they try to get to the — 

like into the high school level questions, before understanding the kindergarten and grade 

school level questions, they never get the benefit, because they can’t — they can’t under 

—they get so confused.

So it’s almost like, once you’ve seen a dead body you can’t unsee it, and you 

can’t focus on anything else. And so what I’m trying to share with you, you know, if you 

just, you know, take a bite at a time, you know, like the old saying, you can’t eat an 

elephant in one bite, we need just a bite of your time.

You will get through this and you’ll get the money.

But if we try to jump ahead, you know, I’ll tell you, it’s never been successful.

GAO INVESTIGATOR: Okay. What – 

COMPANY REPRESENTATIVE: And I hope you understand. I’m just giving you 

my expertise and experience in this.

We do over — we submit over four hundred apps a month, and everybody gets 

the benefit, so we know how to do it, we know how to get it done.

And nothing is going to be a surprise to you. Everything is going to be here, this 

is your option. If you want this, you’ve got to do this.

And then it’s up for you to decide. But it’s just a matter of getting you to that point 

where you have all the facts, so you can make a decision.

And so the questions you’re asking are all valid, you know, they are all the 

questions that we’ll be delving into very deeply. If you need a CPA involved, we have a 

CPA on our team. We have our attorney on our team that I use, [name]. He’ll be a part of 

all the conversations if we need, so all throughout.

And none of that is costing you any money, because that’s part of my fee.

But what I’m saying is, all those questions that you have now, when you are 

ready for the answers, we’ll have those conversations. But right now, you’re not ready for 

the answers. It’s difficult to understand this, why this, what that? 

All those answers you are going to get from me right now are going to create 

more and more questions, and things are going to get so confusing for you.

GAO INVESTIGATOR: Okay.
Appendix II: Full Transcript of Selected Calls 

with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 34 GAO-12-540 Veterans’ Benefits

COMPANY REPRESENTATIVE: This process is already confusing enough, I’ve 

got to tell you.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: There are some three hundred to four hundred 

thousand applications a month — I mean, I shouldn’t say a month. The VA has over — 

between three hundred and four hundred thousand applications backlogged, sitting there, 

because people didn’t do the process right, and it will take them up to two years to get 

approved.

You know, that — that’s — it is difficult. It has to be done a certain way, and I’ll 

get you there. I promise, I’ll get you there, but you just have to go through it step-by-step.

GAO INVESTIGATOR: Okay. Well, the only other question I have then is the 

cost. What is the cost involved?

COMPANY REPRESENTATIVE: If there is any cost, it would be with the 

attorney. They charge — they’ll charge a fee for setting up certain documents, and we’ll 

get to that, as well.

The worst case, let’s say your dad, he has a house, and you’re not able to sell 

the house. See, while he’s living in it, they don’t care that he owns a home, but when he’s 

out of the house, they consider it an asset.

We have to — we’ll have to do something with the house, as well. If you were 

planning on selling it, fine.

If you weren’t planning on selling it, that’s fine, too, but we’ll have to address it.

The worst case scenario would be about fourteen hundred bucks. That’s a worst 

case scenario.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: And when you understand what that all entails, 

you’ll be like, geez, fourteen hundred bucks, let’s find out tomorrow. That’s another thing, 

you know, when you understand everything that you get with that.

And he’ll make sure everything is done the right way so that the VA can never 

come back at you, seeing that the house is protected, your mother is protected, you know.

I’m just saying, there’s a whole lot to it, and to try to answer it over the phone is 

more than tough.

GAO INVESTIGATOR: Okay. All right. So there’s no — that’s just an attorney 

fee? I mean, there’s no fee for you?

COMPANY REPRESENTATIVE: Exactly.
Appendix II: Full Transcript of Selected Calls 

with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 35 GAO-12-540 Veterans’ Benefits

GAO INVESTIGATOR: There’s no fee for you, at all?

COMPANY REPRESENTATIVE: No, not at all.

GAO INVESTIGATOR: Does the VA pay you or something?

COMPANY REPRESENTATIVE: Hang on a second. Let me do this. I hate to try 

to get you — are you busy during the day?

GAO INVESTIGATOR: Ummmm. 

COMPANY REPRESENTATIVE: Is there like an hour of time that you and I can 

get together and get the process started, so I can show you how — how it all works?

GAO INVESTIGATOR: Yeah, I mean, probably, but probably not until, you know, 

after the holidays.

COMPANY REPRESENTATIVE: Okay. Then let’s do this. If you have your 

schedule, my schedule is tied up until the second week of January, already filled with 

seminars and things to — so people can come and see me. The second week I have at 

least two seminars, and I usually have thirty to forty people at each seminar.

GAO INVESTIGATOR: Uh-huh.

COMPANY REPRESENTATIVE: And then about half of those people sit down 

with me and want to go to the next step.

GAO INVESTIGATOR: Right.

COMPANY REPRESENTATIVE: So if I do two or four presentations, I mean, I’ve 

got thirty to fifty appointments during the second week of January. So if you and I can get 

together in the first week, I can get you started before all that mess starts.

GAO INVESTIGATOR: Okay. Well, I wonder if it wouldn’t be beneficial to go to 

one of the seminars?

COMPANY REPRESENTATIVE: Well, the seminar is in [name].

GAO INVESTIGATOR: In where?

COMPANY REPRESENTATIVE: In [name], but really, what I do there is more of 

a blanket meeting.

If you already know you have a situation, you already know you have an interest, 

I go over that same information that I go over in the seminar. But the seminar, it’s just 

information, and I will be giving that to you face-to-face, and be able to collect the 

information and get started on the process. 
Appendix II: Full Transcript of Selected Calls 

with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 36 GAO-12-540 Veterans’ Benefits

GAO INVESTIGATOR: Okay. Yeah, I mean, I don’t have a lot of questions, you 

know, I just want to know what types of Products : you’re talking about that we would — 

where the assets would go, how — I mean, are we talking about – 

COMPANY REPRESENTATIVE: It all depends on your dad’s needs. Right now 

we don’t know – I don’t know anything about your situation. I don’t know what your costs 

are, I don’t know what his expenses, his needs are. I don’t have any idea what the cash 

flow management requirements will be – 

GAO INVESTIGATOR: Yeah.

COMPANY REPRESENTATIVE: — this year, next year, five years down the 

road. You know, as a financial advisor, you know, I come from the banking industry, where 

I worked in the trust department, and my clients were all multi, multi-millionaires. And all I 

did for them was identify what their needs were going to be year in and year out, into the 

future – 

GAO INVESTIGATOR: Right.

COMPANY REPRESENTATIVE: — protecting their assets, so that they knew 

that money was going to be there (unintelligible). Like your dad, the last thing he wants to 

do is have his nest egg at risk.

GAO INVESTIGATOR: Right.

COMPANY REPRESENTATIVE: He’s going to need — he’s going to need 

income from it to maybe offset some of the cost of his retirement community, perhaps.

GAO INVESTIGATOR: Uh-huh.

COMPANY REPRESENTATIVE: I don’t know, you know, I don’t have any 

answers, at this point, because I don’t know what his needs are, what your family needs 

are, you know, how many kids are there, who all is involved.

GAO INVESTIGATOR: I mean, basically, it’s just him. I mean, he’s got his Social 

Security, and then, if he qualifies for the VA Pension, he would have that. So I imagine 

that would be enough income for him. So it’s just a matter of doing something with the 

assets, so he doesn’t lose it. So – 

COMPANY REPRESENTATIVE: Exactly. And that’s something you and I will 

discuss and work on. Are you — are you handling his affairs now?

GAO INVESTIGATOR: Yeah, uh-huh.

COMPANY REPRESENTATIVE: So you take care of all of his bills?

GAO INVESTIGATOR: Yeah.
Appendix II: Full Transcript of Selected Calls 

with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 37 GAO-12-540 Veterans’ Benefits

COMPANY REPRESENTATIVE: So you are the person who understands best, 

you know, what your parents, you know, what the family, you know, your father, your 

mother, your parents, what their requirements are.

Now your mother has passed; is that correct?

GAO INVESTIGATOR: Yes, uh-huh.

COMPANY REPRESENTATIVE: Okay, so we’re just talking about your dad 

here.

GAO INVESTIGATOR: Right.

COMPANY REPRESENTATIVE: So here’s — the VA just increased the payment 

to the Veteran, single Veteran, to right around seventeen hundred a month, tax-free, so 

it’s a pretty substantial benefit; that’s over twenty thousand dollars a year.

If you are looking at his — looking at what his Social Security is – 

GAO INVESTIGATOR: Right.

COMPANY REPRESENTATIVE: — you add that, plus his VA, it may cover his 

long-term care facility.

GAO INVESTIGATOR: Uh-huh, yeah, his Social Security is twelve hundred, so 

you’re talking about somewhere close to almost three thousand dollars a month.

COMPANY REPRESENTATIVE: Yeah, exactly, so that’s not bad, that’s not bad. 

Now it depends on what kind of community he would be looking at, but you know, that’s. . 

. 

You know, the hardest part is getting started, and then once you get to a certain 

point, you’ll be like, yeah, I get it, I get it, now I understand, this is what we do.

Let me ask you, is Tuesday the 3rd or is Wednesday the 4th a better day for 

you?

GAO INVESTIGATOR: Well, probably Wednesday will be better for me.

COMPANY REPRESENTATIVE: And you’re in [state]?

GAO INVESTIGATOR: Yes. 

COMPANY REPRESENTATIVE: Okay. How does 10 a.m. work?

GAO INVESTIGATOR: Are you talking about coming down to me or where?

COMPANY REPRESENTATIVE: Yeah, absolutely, I’d come to you.
Appendix II: Full Transcript of Selected Calls 

with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 38 GAO-12-540 Veterans’ Benefits

GAO INVESTIGATOR: That sounds good, tentatively. I’ve got to check and 

make sure that — I have to check a couple things here, but I mean, it sounds good.

COMPANY REPRESENTATIVE: What address is the best place to meet you?

GAO INVESTIGATOR: Well, you know, I’m guessing that it might be just as good 

to do it at the office. I’ll tell you what, are you going to be around this afternoon?

COMPANY REPRESENTATIVE: Yeah, do you want to give me a call back?

GAO INVESTIGATOR: Yeah, let me give you a call back. Let me check the 

schedule and make sure it’s good. I think it would probably be easier just to do this at the 

office.

COMPANY REPRESENTATIVE: Okay. What city is it?

GAO INVESTIGATOR: I’m sorry?

COMPANY REPRESENTATIVE: What city is your office in?

GAO INVESTIGATOR: In [city].

COMPANY REPRESENTATIVE: That sounds so familiar. As you are going down 

83, that’s

GAO INVESTIGATOR: Near [city].

COMPANY REPRESENTATIVE: Near [city], okay, (unintelligible). All right, good. 

Give me a call back just to confirm if 10 a.m. works. If I don’t answer, just leave a 

message. I may go out and do some shopping (unintelligible).

GAO INVESTIGATOR: All right. I’ll just leave a message on your voicemail.

COMPANY REPRESENTATIVE: Yeah, and — good.

GAO INVESTIGATOR: Sounds good.

COMPANY REPRESENTATIVE: All right, [name].

GAO INVESTIGATOR: Thanks for your time, I appreciate it.

COMPANY REPRESENTATIVE: Nice talking to you.

GAO INVESTIGATOR: Alright, Bye.
Appendix II: Full Transcript of Selected Calls 

with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 39 GAO-12-540 Veterans’ Benefits

Call 2: Caller is a GAO investigator phoning on behalf of his 

fictitious 86-year-old father who was a veteran, seeking VA pension 

benefits, who wants to learn about the services provided by the 

company. The company representative describes how his father can 

qualify for these benefits, despite having significant assets.

(Whereupon, an outgoing call was placed by the GAO investigator to a 

company representative.)

COMPANY REPRESENTATIVE: Hello? Hello?

GAO INVESTIGATOR: Hi.

COMPANY REPRESENTATIVE: Hi. This is [name]. Did somebody call this 

number?

GAO INVESTIGATOR: Yeah, I did. I did. I was trying to get some information on 

VA benefits.

COMPANY REPRESENTATIVE: Okay. What can I help you with?

GAO INVESTIGATOR: Well, I’m just trying to figure out my — this is for my 

father.

COMPANY REPRESENTATIVE: Uh-huh.

GAO INVESTIGATOR: And, you know, he’s not currently getting benefits. He 

gets Social Security.

COMPANY REPRESENTATIVE: Right.

GAO INVESTIGATOR: But, you know, I was — I’m trying to see if maybe he 

could qualify for benefits. But the problem is he’s got, you know, some assets, and I’m not 

sure, you know, if that precludes him from getting benefits or not. So I wanted to talk to 

somebody – 

COMPANY REPRESENTATIVE: No. No. Is he — does he need some help 

around the house or has he got some medical or physical impairments – 

GAO INVESTIGATOR: Yeah.

COMPANY REPRESENTATIVE: — right now?

GAO INVESTIGATOR: Yeah. I mean, he’s 86. I mean, mentally he’s fine. But, 

you know, physically he needs a lot of help in just, you know, walking and getting in and 

out of bed.

COMPANY REPRESENTATIVE: Okay.
Appendix II: Full Transcript of Selected Calls 

with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 40 GAO-12-540 Veterans’ Benefits

GAO INVESTIGATOR: And, I mean, yeah, he needs help.

COMPANY REPRESENTATIVE: Sure. If you will — if you will do me a favor, I’m 

going to send you — do you have an e-mail address?

GAO INVESTIGATOR: Well, not really. But, I mean, I can probably get 

something. But what do you need?

COMPANY REPRESENTATIVE: Well, I was going to send you a little form, and 

if you can just spend a few minutes and fill it out, then I can tell you if your father is 

available for benefits or not.

GAO INVESTIGATOR: Okay. I mean, I mean, basically I’m assuming he – 

COMPANY REPRESENTATIVE: I probably could do this — I could do this over 

the phone, too. But right now I’m just going and jumping on a conference call. So I can call 

you back and I can ask you the questions I need to ask you, if you want. Maybe in — I’d 

say within a couple of hours I can get back with you.

GAO INVESTIGATOR: Okay. Yeah, that might work.

COMPANY REPRESENTATIVE: Okay. It is a means-tested and an asset-tested 

– uh, benefit, but – um, essentially there are legal work-arounds. And if you know, it’s 

basically you have to put together a good presentation for the Veterans Administration. 

And that’s what we do. We help people um — position assets and coordinate the 

presentation effort to the VA. So there’s really not many kinds — if, in fact, your father has 

lost some of the activities of daily living, then we really can’t get him qualified. So I’ll just – 

GAO INVESTIGATOR: Yeah.

COMPANY REPRESENTATIVE: — make a short explanation like that.

GAO INVESTIGATOR: Yeah. And just to kind of make it short, I mean, his 

income isn’t the thing, because he’s only getting Social Security. But he’s got assets that 

are probably — between his house and some savings and stuff, he’s probably, you know, 

a little bit over $500,000.

And I’m wondering if that precludes him from qualifying.

COMPANY REPRESENTATIVE: No. No, it doesn’t, especially if he’s got a little 

bit of uh — flexibility. How much is the house worth? The house is really not an issue at 

all.

GAO INVESTIGATOR: Yeah, that’s probably about 200,000.

COMPANY REPRESENTATIVE: Oh, so you have 300 in other stuff? Okay. 

Yeah, I’ve qualified people with that — beyond $700,000 worth of liquid assets. So that’s 

not the issue. But sometimes the older folks, you know, your father being 82 – 

GAO INVESTIGATOR: Eighty-six.
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with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 41 GAO-12-540 Veterans’ Benefits

COMPANY REPRESENTATIVE: Eighty-six, I’m sorry. Sometimes they — oh, 

they’re not — what would be the word? They’re sometimes control freaks, meaning 

sometimes what we have to do is retitle assets. He would still be totally in control of them, 

but not under his direct purvey.

So if he can understand the strategy, he could understand that, you know, he’s 

entitled to the benefit. It could be — he’s single right now?

GAO INVESTIGATOR: Yeah, yeah. His wife is dead.

COMPANY REPRESENTATIVE: Okay. So, you know, basically he performed for 

his country. If he was able to get aid and attendance, he would get real close to — 

actually, this year is $19,736 per year. And if that means something to him, then we can 

help him out. If it doesn’t, then

he’ll just have to go through spend-down and spend it.

So we can — we can make it work, but he’s got to be willing to help us. Okay? 

We can’t force people to do something that they’re not wanting to do.

GAO INVESTIGATOR: I got it.

COMPANY REPRESENTATIVE: Okay. It’s real simple – 

GAO INVESTIGATOR: What sorts of things are you talking about? I mean, 

where do we put it?

COMPANY REPRESENTATIVE: Well, for instance, do you have power of 

attorney for him right now?

GAO INVESTIGATOR: Well, I don’t. But, you know, he’s pretty — he’s pretty 

lucid. I mean, I — I can probably get it.

COMPANY REPRESENTATIVE: Well, typically speaking, for people that have 

had a child or relative assigned a power of attorney, then they’ve kind of realized that, you 

know, if something happens, they may need some help. Somebody acting in their financial 

capacity if they get in a situation where they can’t perform or somebody to make some 

medical decisions for them.

So at that point in time, they’ve kind of acquiesced to the fact that, you know, at 

this point in my life, I need a little bit of help.

So I was going to say, if he’d already given you power of attorney, then 

essentially what he said is, you know, he trusts you.

GAO INVESTIGATOR: Uh-huh.

COMPANY REPRESENTATIVE: And if that’s the case, then essentially it’s going 

to be that type of a relationship where things may be put into special types of trusts where 
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he is still — where you would have a fiduciary responsibility to him. So it’s a contractual 

obligation. It’s — all the money is for the benefit of him, but it’s not under his direct control.

Now, that’s not necessarily the only way it can be done. There are also what we 

call care contracts where essentially he can kind of prepay in a contractual manner for his 

future care. It gets it out of his immediate possession and would help qualify for those 

types of benefits.

So there’s a myriad of strategies. I work with an attorney. We’ll make sure it 

works for you. But he just has to understand that either he wants to get the benefit or he 

doesn’t. If he does, we can make it work. If he doesn’t, then that’s okay, too.

GAO INVESTIGATOR: Right. Well, I mean – 

COMPANY REPRESENTATIVE: It’s up to him.

GAO INVESTIGATOR: — I don’t think he wants to lose his assets. And, you 

know, you know, we don’t want him to lose his assets. And that’s — that’s the biggest 

concern now.

COMPANY REPRESENTATIVE: Right. There’s — there’s a — yeah, well, he will 

if he needs the care. Then the other issue you have coming up, too, of course, is 

sometimes folks that mostly qualify for the benefit will essentially possibly qualify for 

Medicaid, too. And what that means is that, yes, I mean, if his expenses go to $6-7-8-9-

10,000 a month, then he will lose his assets unless he does something to protect them. So 

we can help out in that regard, too.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: It’s — you really don’t have — you don’t have 

an e-mail address really?

GAO INVESTIGATOR: Well, I can get one for you, yeah. I’m not real computer 

— I’m not a computer guy. That’s all.

COMPANY REPRESENTATIVE: Okay. Well, I can appreciate that. We probably 

— I’m thinking here — is this your cell number?

GAO INVESTIGATOR: Uh-huh. Uh-huh.

COMPANY REPRESENTATIVE: You wouldn’t be able to print it if I gave it to you 

so – 

GAO INVESTIGATOR: Do you have something on your web site?

COMPANY REPRESENTATIVE: I don’t have a — I don’t have the form 

embedded. Let’s just talk in a couple of hours. I’ll ask you the question. You know, I can 

tell pretty much right now that I can help you out. It’s just a matter to the extent where you 

need to ask your father — well, probably before you talk to me again. Say, Hey, Dad, you 

know, I talked to an accredited VA application guy, and he says that, you know, we can 
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get you the benefit but there is some strategy involved. And if you want to hear it, fine. If 

not, that’s okay, too.

You know, that’s just really what you need to do with this.

GAO INVESTIGATOR: All right. What do you guys charge for that?

COMPANY REPRESENTATIVE: Well, for the — there’s two ways. Let’s just 

leave it at a thousand — $1,050, okay?

GAO INVESTIGATOR: Just a straight fee?

COMPANY REPRESENTATIVE: Yeah, $1,050. Of course, what we really want 

to do is to be able to – we can give you the recommendations and turn you loose, and you 

go out there on the street and try to implement it.

But, you know, you probably really want to kind of go through us and let us help 

you in the full way. I will send you enough information and the attorney’s information so 

that you’ll understand that we really are a full-fledged service organization and can really 

help you through this mix.

And then, you know, once we help you out, you can either go down to the local 

VA office and have them fill out the paperwork. Is your father — is your father in the same 

town as you or is he — where is your father?

GAO INVESTIGATOR: Yeah, he’s not that far away. About, you know, seven, 

eight miles away.

COMPANY REPRESENTATIVE: Okay. Where — where are you located?

GAO INVESTIGATOR: I’m actually in north [state].

COMPANY REPRESENTATIVE: Oh, are you? What part?

GAO INVESTIGATOR: Well, are you familiar with [city] at all?

COMPANY REPRESENTATIVE: Yes. I went to [college] so – 

GAO INVESTIGATOR: Oh, no kidding.

COMPANY REPRESENTATIVE: Yeah. And my sister lives in [city] right now, 

actually.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: And actually we lived in [city] for a few years 

when I was real young. Yeah, I’m familiar with [state]. I’m a native of [state]. So, yeah, we 

can help out. So I wish you had some kind of an e-mail.
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GAO INVESTIGATOR: Well, let me see if I can do something. I mean, you know, 

my brother might have something that I can — I can use.

COMPANY REPRESENTATIVE: Okay. Yeah, because, really, this is a family 

discussion. You know, all the kids — how many kids are there besides you?

GAO INVESTIGATOR: Just me and my brother.

COMPANY REPRESENTATIVE: All right. So you guys are really going to need 

to put your heads together and say, hey, this makes sense for us or it doesn’t. You know, 

dad is going to have to cooperate or he’s not. And, you know, sometimes, to be honest 

with you — I deal with older folks, you know — they just don’t give a rat’s fanny. And so 

you can’t make the horse drink, you know.

GAO INVESTIGATOR: I don’t think – 

COMPANY REPRESENTATIVE: But if he wants to protect his asset – 

GAO INVESTIGATOR: Yeah, I mean, he’s — you know, mentally he’s fine. I 

don’t think that’s going to be a problem. I mean, he – 

COMPANY REPRESENTATIVE: All right. Well, if he wants to protect his assets – 

GAO INVESTIGATOR: Right.

COMPANY REPRESENTATIVE: Most of the time — most of the time they want 

their kids to wind up with the money. And sometimes, you know, they don’t care as much. 

But I can’t get in your father’s head, so you need to kind of ask him if that’s the case. If he 

wants to protect the money, you can have him protect the money.

GAO INVESTIGATOR: Okay. All right.

COMPANY REPRESENTATIVE: Okay?

GAO INVESTIGATOR: Sounds good. All right. I appreciate it. Well, let me see if I 

can get an e-mail address and give you a buzz back.

COMPANY REPRESENTATIVE: All right. Hey, let me do this. Let me give you 

my cell number, please, so you should be — because I’m in and out so much. It’s 

[telephone number] – 

GAO INVESTIGATOR: Uh-huh.

COMPANY REPRESENTATIVE: — [telephone number].

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: [telephone number].

GAO INVESTIGATOR: Okay. All right. Got it.
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COMPANY REPRESENTATIVE: All right, buddy. Take care.

GAO INVESTIGATOR: I’m sorry. What did you say your name — what did you 

say your name was again? I’m sorry.

COMPANY REPRESENTATIVE: [name]— 

GAO INVESTIGATOR: [name]. Oh, that’s right,[name].

COMPANY REPRESENTATIVE: [name], [name]. Yeah. All right.

GAO INVESTIGATOR: Okay. Thank you.

COMPANY REPRESENTATIVE: Okay. Thank you. Bye now.

Call 3: Caller is a GAO investigator phoning on behalf of his 

fictitious 86-year-old father who was a veteran, seeking VA pension 

benefits, who wants to learn about the services provided by the 

company. The company representative describes how his father can 

qualify for these benefits, despite having significant assets.

(Whereupon, an outgoing call was placed by the GAO investigator to a 

company representative.)

SPEAKER ONE: [company name], [name], can I help you?

GAO INVESTIGATOR: Yeah, I hope so. I want to talk to somebody about 

possibly getting VA benefits for my father.

COMPANY REPRESENTATIVE: Okay. And your name?

GAO INVESTIGATOR: My name is [name].

COMPANY REPRESENTATIVE: Hi, [name]. Can you tell me a little bit about 

your dad’s situation?

GAO INVESTIGATOR: Well, he’s a World War II veteran.

COMPANY REPRESENTATIVE: Okay.

GAO INVESTIGATOR: He’s 86 years old. Are you there?

COMPANY REPRESENTATIVE: What is the nature of his illness?

GAO INVESTIGATOR: I’m sorry?

COMPANY REPRESENTATIVE: Can you tell me about his illness, please.

GAO INVESTIGATOR: Well, you know, aside from getting old?
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COMPANY REPRESENTATIVE: Yeah.

GAO INVESTIGATOR: He’s having a lot of — he can’t walk too well.

He’s got a lot of, you know, joint problems and stuff like that.

So he can’t — he needs a lot of help getting in and out of bed, taking baths and 

stuff like that.

He’s also got — he doesn’t hear very well.

COMPANY REPRESENTATIVE: And how old is your dad?

GAO INVESTIGATOR: He’s 86.

COMPANY REPRESENTATIVE: God bless him.

GAO INVESTIGATOR: I mean, mentally he’s fine, but physically he’s, you know, 

I guess just wearing out.

COMPANY REPRESENTATIVE: Where does he live? Is he living with you or is 

he in a facility?

GAO INVESTIGATOR: No, he’s got a place, he’s got a house.

COMPANY REPRESENTATIVE: Ok. Are you planning on leaving him at the 

house, staying at the house?

Is he going to have any in-home health care coming in?

GAO INVESTIGATOR: Yeah, I mean, in-home, I would think, because I mean, 

mentally he’s fine.

COMPANY REPRESENTATIVE: Have you checked with an in-home health care 

agency to come to the house?

GAO INVESTIGATOR: Well, yeah, he’s got people coming in already.

COMPANY REPRESENTATIVE: He does. Okay.

GAO INVESTIGATOR: I mean, that’s kind of why I’m – 

COMPANY REPRESENTATIVE: I see. The reason why I ask those questions is 

that in order to get VA benefits, called Aid and Attendance, which is a benefit that the 

government will pay up to nineteen fifty per month, tax-free, and the government usually 

pays that 9 months out from the time we apply.

And you get also a retroactive, so it would be 8 months on top of that.

GAO INVESTIGATOR: Okay.
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COMPANY REPRESENTATIVE: It’s that they need to have something in place 

like in-home health care already being used or about to be used, or he lives in an 

assisted-living facility or a nursing home.

And those are key. One of those three things have to be in place or about to be 

in place.

GAO INVESTIGATOR: He is getting help already at the house. I mean, that’s 

one of the things.

I mean, we’re spending a lot of money.

And you know, he’s got — he’s got some assets, but I mean, as far as income, 

all he’s got is his Social Security.

COMPANY REPRESENTATIVE: Tell me about his Social Security. What is 

coming in per month, as far as income?

GAO INVESTIGATOR: He’s got eleven fifty coming in a month.

COMPANY REPRESENTATIVE: Okay. Anything else?

GAO INVESTIGATOR: Well, no, because he’s got some — you know, he owns 

his own house.

COMPANY REPRESENTATIVE: Right. I’m just asking; I don’t know your 

situation.

But eleven fifty a month in Social Security. No other income is coming in.

No savings?

GAO INVESTIGATOR: No, he’s got some savings and stuff, but I mean, I’m 

concerned, again, he’s going to lose all that.

COMPANY REPRESENTATIVE: Right.

See, how we work — first of all, I’m accredited by the VA. And what we do is we 

plug into the software to see what dad qualifies for.

And what we plug into the software is money going in, money going out, money 

saved, illnesses, what his illness issues are, in other words, what the home health care 

agency is doing for dad.

All of that plays a major role in crunching the numbers to see what dad qualified 

for.

And in most cases, [name], it’s not a matter of if he qualifies, it’s a matter of how 

much.
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GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: That’s going to have to be our next 

conversation.

I’m just trying to get a little information to see if I can guide you in the right 

direction.

My question to you regarding the home health care, do you have an idea what 

they’re charging you per month?

GAO INVESTIGATOR: Well, you know, it’s probably around a little over two 

thousand, maybe twenty-five hundred a month.

COMPANY REPRESENTATIVE: Okay. And so here’s what you have, [name]. 

You have more money going out than coming in, as far as income.

GAO INVESTIGATOR: Right.

COMPANY REPRESENTATIVE: So you have a shortfall of about fourteen 

hundred dollars, thirteen fifty, a month going out for care.

And that’s a good thing, when it comes to applying for the VA benefits.

There’s other factors, I’m just giving you kind of an overview.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: And it could be, you know, dad may qualify for 

up to the full nineteen fifty a month.

I don’t care if twenty-five hundred is coming in, and twenty-five hundred is going 

out the door, the software, with all of the bells and whistles of what we have to plug into it, 

it may kick out that dad needs nineteen fifteen a month.

GAO INVESTIGATOR: Okay, but here’s the problem.

COMPANY REPRESENTATIVE: He may have a shortfall of fourteen hundred.

GAO INVESTIGATOR: Yeah, but here’s my concern though, is that he’s got — 

he owns his own house, and then he’s got like a mutual fund and he’s got some savings.

And of course, that’s not going to last very long with this negative, you know, 

income that he’s got going on.

COMPANY REPRESENTATIVE: Correct. 

GAO INVESTIGATOR: But how is he going to qualify for anything with those 

assets? 
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COMPANY REPRESENTATIVE: Well, the VA has different scenarios.

For example, the VA will allow us to do estate planning to reposition the assets 

so he can qualify.

The VA may be able to allow him to keep a certain amount.

How much money are we talking about in savings or stocks or bonds or mutual 

funds total?

Just off the top of your head. You don’t have to be exact.

GAO INVESTIGATOR: I’m guessing he’s got maybe ninety thousand in savings 

and about two hundred — about a quarter of a million, probably, in mutual funds.

A little over two fifty, two sixty maybe.

COMPANY REPRESENTATIVE: All right. So if he’s not opposed, there’s like 

several scenarios.

So let’s just talk about money. Those with assets of which we would call your 

dad.

Is he opposed to repositioning the assets to where — are you the power-ofattorney, [name]?

GAO INVESTIGATOR: Like I say, he’s got his mental facilities, so I’m not.

I mean, I could be, but I mean, at this point, he’s still able to function for himself.

COMPANY REPRESENTATIVE: Well, your issues here are you have about a 

quarter of a million dollars plus cash.

The government is going to want him to use his money first, if we don’t do estate 

planning, which we’re allowed to do, according to the VA parameters.

GAO INVESTIGATOR: Okay, so what does that mean? Where — what would 

you do?

COMPANY REPRESENTATIVE: What that means is basically is repositioning 

the assets to where – it may – and I don’t — again, the software tells us what we can and 

can’t do.

But I’m just going to give you a — kind of a hypothetical.

Uh — For example, you may be able to reposition, reallocate those funds into a 

trust that [name], Jr. — if you’re a Jr. – I’ll just – [name], you – 

GAO INVESTIGATOR: [Inaudible].
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COMPANY REPRESENTATIVE: — would be the trustee of.

And we’re allowed to apply for VA benefits the day after, by reallocating those 

funds, so that dad can qualify.

And he may get nineteen fifty a month, tax-free, plus retroactive, for the 8 months 

waiting.

So he may get a full check of about almost twenty something thousand dollars, 

and the funds thereafter come each month to you tax-free.

Does he want that? I don’t know.

Those are some of the scenarios that the software will kick out, and let us know 

what we can and can’t do.

But the bottom line is, if you went to the VA directly and told them — because 

you would have to be forthright, and tell them that you had this money — they would reject 

you immediately, until you spend down to your last fifteen hundred dollars.

Or there are options that you could do.

And that’s where an accredited VA claims agent comes in, myself, because we 

work with attorneys that do estate planning that are able to do these type of things.

So those are the questions you want to talk to your dad about, even though he 

may have his faculties, and he may be able to make decisions.

Is he willing to pull the trigger and let you make the decisions? Because that’s 

what he may have to do.

GAO INVESTIGATOR: Well, I’m just – 

COMPANY REPRESENTATIVE: I’m just giving you one of the scenarios.

But our niche is that we deal with people with assets, if they are willing to let the 

power-of-attorney make those decisions, then we can apply for VA benefits without a 

hiccup.

GAO INVESTIGATOR: Okay, all right.

COMPANY REPRESENTATIVE: So those are the questions that I probably 

would talk to my dad about.

GAO INVESTIGATOR: He’s pretty reasonable.

COMPANY REPRESENTATIVE: Because quite frankly, there is a gap.

And dad, who knows, can get worse, and then you may have to put him into a 

nursing — an assisted-living facility, which is twice what you’re paying now.
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And now it becomes a do or die situation, where do you want to preserve the 

Estate, or do you want to spend it down?

And those are the questions — those are hard questions to ask.

GAO INVESTIGATOR: Yeah. You know, what I’m seeing now is that those 

assets are – are dwindling because — 

COMPANY REPRESENTATIVE: The economy.

GAO INVESTIGATOR: Yeah, and we’re putting out more than, you know, he’s 

only got a little bit coming in with the social security. That’s not covering it.

COMPANY REPRESENTATIVE: No, that’s right. And what these types of estate 

planning devices, that’s allowed, according to the VA, it’s real simple.

I mean, they make it very clear that the — by the way, are you the power-ofattorney?

GAO INVESTIGATOR: I don’t have a power-of-attorney, but I can probably get 

one.

COMPANY REPRESENTATIVE: I would do that yesterday. I would — forget 

whether we met each other or not. You need to get that done.

What I would suggest — can I make a suggestion?

GAO INVESTIGATOR: Uh-huh.

COMPANY REPRESENTATIVE: Go to Office Depot – 

GAO INVESTIGATOR: Yes. 

COMPANY REPRESENTATIVE: — get a general power-of-attorney in place. 

Have a notary notarize it, which will make it legally binding that day of notary.

And now you have a power-of-attorney in place, so that if anything happens to 

dad, God forbid, he has a stroke and he becomes mentally incapacitated, you’ve already 

got something in writing where you can make decisions for him, and you don’t have to go 

through the court system.

GAO INVESTIGATOR: That makes sense.

COMPANY REPRESENTATIVE: So I would do that immediately. And I would tell 

dad. He wouldn’t be opposed to that, would he?

GAO INVESTIGATOR: I don’t think so, no. But by the same token, he can still 

make his own decisions, so I want him to – 
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COMPANY REPRESENTATIVE: That’s doesn’t change. I mean, he still makes 

his own decisions, even with the power-of-attorney in place.

The power-of-attorney is only in case he does become incapacitated.

GAO INVESTIGATOR: Uh-huh.

COMPANY REPRESENTATIVE: Okay. You are basically doing preventive 

medicine. And that’s what we’re suggesting here.

If the software kicks out — and I don’t know until I get a fact-finder filled out by 

you in detail, and it’s an 8-page fact-finder, it takes me about 7 hours with the attorney to 

go through all this.

And we don’t charge to fill out the VA forms.

We do not charge to represent dad for the VA benefits, but we do charge a flat 

rate to do the seven hours, eight hours of due diligence to figure out what is going to be 

the right avenue, because they are only going to have one scenario that’s going to fit 

dad’s situation, once we get that fact-finder in.

Because once we get that fact-finder in, the software tells us exactly what we can 

and can’t do.

GAO INVESTIGATOR: All right. And how much is that? What’s the cost of that?

COMPANY REPRESENTATIVE: Fifteen hundred dollars.

GAO INVESTIGATOR: Fifteen hundred, okay.

COMPANY REPRESENTATIVE: But it’s not a matter of if dad qualifies, it’s a 

matter of how much.

I will tell you, because he’s a living vet, our experience from the software, the 

software will kick back between sixteen to nineteen hundred dollars that he would qualify 

for, because he’s a living vet,. whereas if it was mom, and dad was dead, the surviving 

spouse always gets less.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: Now if dad qualifies for the nineteen fifty — let’s 

just use that as an example — times, ah, he’ll get a check on the ninth month, if we apply 

for it yesterday, and got everything in place, he would get a check from the government for 

seventeen thousand five hundred fifty dollars, tax-free.

And then, each month thereafter, he would get nineteen fifty coming in, each 

month, tax-free.

GAO INVESTIGATOR: Whoa.
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COMPANY REPRESENTATIVE: That’s how that works. I’m here to tell you, that 

for fifteen hundred dollars, you’ll get your money back on the first month that you apply, 

basically.

GAO INVESTIGATOR: Yeah, yeah.

COMPANY REPRESENTATIVE: But once we do what we need to do, and if he’s 

not objected — objecting to the reallocating and repositioning of those funds, because 

quite frankly, at 86, I know he has two hundred and fifty thousand in mutual funds, but you 

know, that’s a concern to me right there, because of the loss and what’s going on in the 

economy.

GAO INVESTIGATOR: Uh-huh.

COMPANY REPRESENTATIVE: So is he willing to pull the trigger and get it out 

of harm’s way, so that he would get between 4 to 6 percent, and not — and not at any 

risk? 

Because if we do reposition the funds, it’s very likely that it has to be an account 

that cannot go backwards.

GAO INVESTIGATOR: All right. So what type of thing are you talking about?

COMPANY REPRESENTATIVE: It could be CDs, it could be annuities, but the 

point is, it has to be an account that’s protected, that can’t go backwards.

There’s not an attorney, that I know that’s accredited, that would will take any 

case that’s going to be tied into stocks, bonds, or mutual funds, because they can lose 

their base, they can lose their principal, they can lose their gains.

And the attorney signs off on that stuff, when he represents the VA.

GAO INVESTIGATOR: Okay. And if he’s putting it into something, and he’s 

getting 4 to 6 percent, does that money go to him or where does that go?

COMPANY REPRESENTATIVE: If it stays into the account, it goes to him.

How it works, basically, [name], it’s that the power-of-attorney is the decision 

maker with dad.

You become the trustee.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: You are the pivot, you are the person we go to.

Because everything has to be reallocated out of dad’s name, titled to the trust, so 

that [name] controls it, [name] cuts the checks.
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Dad’s allowed to keep money in his account, that’s not a question. It’s a question 

of how much is he allowed to keep in his account.

That depends on the software coming back and telling us what he’s allowed to 

keep, what he’s not allowed to keep.

GAO INVESTIGATOR: Uh-huh, uh-huh.

COMPANY REPRESENTATIVE: Do you follow?

GAO INVESTIGATOR: If I use any of that money for him or for me, I have to 

count that as income?

COMPANY REPRESENTATIVE: Great question. Let’s talk about for him first.

If you use the money for him — first of all, the Trust will Dad has what? — am I 

correct by saying he has over two fifty, combined, like three forty?

GAO INVESTIGATOR: Yeah. Well, like I say, he’s got about ninety in savings 

and another two — maybe about two sixty in a mutual fund.

COMPANY REPRESENTATIVE: So three fifty he has total.

GAO INVESTIGATOR: Okay, yeah.

COMPANY REPRESENTATIVE: So what would happen, in this Trust account, 

visualize it as there’s a checkbook access.

In the checkbook access, you’re able — you’re going to have up to three fifty, 

what’s going to be liquid is going to be roughly about close to a hundred and fifty thousand 

dollars, or a hundred thousand minimum.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: So that’s for incidentals, for dad’s needs, for 

whatever. It doesn’t make a difference.

I don’t have to know what it’s for.

GAO INVESTIGATOR: Okay. But if I use that, does somebody, either I or him, 

have to count that as income?

COMPANY REPRESENTATIVE: Well, if he cashes in his – are these IRAs? Do 

you know?

GAO INVESTIGATOR: Well, no. I mean – 

COMPANY REPRESENTATIVE: Okay. If they’re not IRAs, and they’re just nonIRAs, non-401(k)s, non-retirement plans – 
Appendix II: Full Transcript of Selected Calls 

with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 55 GAO-12-540 Veterans’ Benefits

GAO INVESTIGATOR: Right.

COMPANY REPRESENTATIVE: — then, no, you could use them into the 

account —, and they could be taxable— for whatever, it’s not countable as income.

But if they are IRAs, then you would have to cash in the IRAs and then it would 

become income.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: But the other account, when it’s put into the put 

and keep account — let’s say you have three hundred and fifty thousand.

A hundred to a hundred fifty goes into the checkbook access.

The other two hundred or whatever goes into a put and keep account earning 

four to six percent.

GAO INVESTIGATOR: Is that like an annuity or something?

COMPANY REPRESENTATIVE: That doesn’t earn any interest. That’s 

accessible dollars, liquid dollars, when you need it for emergency.

The other account will earn 4 to 6 percent.

So it depends on what you want to put into that other account, and how much 

you want to keep liquid.

GAO INVESTIGATOR: Okay. Well, the account that’s earning 4 to 6 percent, 

what is that in? Is that an annuity or what is that?

COMPANY REPRESENTATIVE: It would be an annuity that has accessibility to 

it, but it’s tax-free, it’s not being — it’s not being taxed.

GAO INVESTIGATOR: Okay. All right. But I wouldn’t have access to that 

money?

COMPANY REPRESENTATIVE: You will have access to that money. Each year 

you have access to it, up to 10 percent free withdrawal, with no penalty.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: And if — but that’s why we want to keep some 

of that money out in the Trust account checkbook, that is basically accessible, totally 

liquid.

So the software will kick out what we can and can’t do.

I’m projecting that probably a hundred and fifty of it, up to a hundred and fifty, 

could be liquid.
Appendix II: Full Transcript of Selected Calls 

with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 56 GAO-12-540 Veterans’ Benefits

Now you may not need a hundred and fifty liquid. So the more you put into the 

annuity, the more interest you’re going to earn on those funds.

GAO INVESTIGATOR: Uh-huh.

COMPANY REPRESENTATIVE: That’s a decision you have to make with dad.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: But from my experience on the software, I’ve 

seen between, - a hundred and fifty or a hundred thousand go into the annuity — checking 

account, and the rest goes into the annuity.

GAO INVESTIGATOR: Uh-huh.

Well, hopefully, you’re talking this VA thing.

Is that really — the nineteen or whatever that he would qualify for, is that a 

pension or what is that?

COMPANY REPRESENTATIVE: It’s — it’s — I’m sorry. It’s going to be 

considered what is called Aid and Attendance.

GAO INVESTIGATOR: Okay.

COMPANY REPRESENTATIVE: It’s aiding him with him attendance for his care, 

and that is the home health care.

Remember, I mentioned that there’s three things that have to be in place in order 

for us even to apply for the VA benefits called Aid and Attendance.

And that he is already getting aid, you know, from a home health care, or 

assisted-living or in a nursing home.

GAO INVESTIGATOR: Uh-huh. All right.

COMPANY REPRESENTATIVE: And so we’re applying for specifically that. 

That’s all I deal with.

I don’t deal with any of the other benefits that the VA has.

GAO INVESTIGATOR: Okay. All right, all right.

COMPANY REPRESENTATIVE: But you do have some obstacles. You have 

some issues that you need to discuss with dad.

If you’re interested, I believe that it’s a fit.

It’s not a matter of if he qualifies, it’s a matter of how much. But the computer will 

tell us what we can and can’t do.
Appendix II: Full Transcript of Selected Calls 

with Organizations Providing Products and 

Services to Help Claimants Qualify for VA 

Pension Benefits 

Page 57 GAO-12-540 Veterans’ Benefits

And then, if you like, I can e-mail you the fact-finder and the information. There’s 

two forms I would send to you that you would send back to me, signed, with a check, and 

the address is on the fact-finder.

If you like, I can e-mail it to you, if you have an e-mail address.

GAO INVESTIGATOR: I’ll tell you what, I want to talk to him about it first.

COMPANY REPRESENTATIVE: Okay, great. Just keep us in mind. You have 

our number; give us a call.

GAO INVESTIGATOR: Okay. I’m trying to think if I have any other questions for 

you. I was just trying to write down a couple things here.

All right, I mean, I guess that’s it.

COMPANY REPRESENTATIVE: The problem that you have right now is that you 

have assets.

We have to definitely — I know, from experience, that if you have assets, there 

may be a strong possibility of repositioning some of those assets.

And there’s a way to reposition some to the trust and there’s a way to reposition 

some to dad, and there’s a way to reposition to [name].

GAO INVESTIGATOR: Right, right.

COMPANY REPRESENTATIVE: That all comes from the software, once it kicks 

it out.

GAO INVESTIGATOR: All right. And you said that the cost is fifteen hundred 

bucks for the – 

COMPANY REPRESENTATIVE: Flat rate, yeah, no extra costs.

GAO INVESTIGATOR: All right. Well, let me talk to him and I’ll get back to you.

COMPANY REPRESENTATIVE: All right. Nice meeting you, [name].

GAO INVESTIGATOR: Thank you for your time.

COMPANY REPRESENTATIVE: Bye bye.
Appendix III: Comments from the Department 

of Veterans Affairs 

Page 58 GAO-12-540 Veterans’ Benefits

Appendix III: Comments from the 

Department of Veterans Affairs
Appendix III: Comments from the Department 

of Veterans Affairs 

Page 59 GAO-12-540 Veterans’ Benefits
Appendix III: Comments from the Department 

of Veterans Affairs 

Page 60 GAO-12-540 Veterans’ Benefits
Appendix III: Comments from the Department 

of Veterans Affairs

Page 61 GAO-12-540 Veterans’ Benefits
Appendix III: Comments from the Department 

of Veterans Affairs 

Page 62 GAO-12-540 Veterans’ Benefits
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 63 GAO-12-540 Veterans’ Benefits

Daniel Bertoni, (202) 512-7215 or bertonid@gao.gov. 

In addition to the contact named above, individuals making key 

contributions to this report were Jeremy Cox, Assistant Director; James 

Bennett; Susannah Compton; Paul Desaulniers; Shelia Drake; Alex 

Galuten; Douglas Manor; Nelson Olhero; Martin Scire; Wayne Turowski; 

Walter Vance, and Gregory Whitney

Appendix IV: GAO Contact and Staff 

Acknowledgments 

GAO Contact 

Staff 

Acknowledgments 
Related GAO Products

Page 64 GAO-12-540 Veterans’ Benefits

VA Enhanced Monthly Benefits: Recipient Population Is Changing and 

Awareness Could be Improved. GAO-12-153. Washington D.C.: 

December 14, 2011.

VA’s Fiduciary Program: VA Plans to Improve Program Compliance and 

Policies, but Sustained Management Attention is Needed. GAO-10-635T. 

Washington, D.C.: April 22, 2010.

VA’s Fiduciary Program: Improved Compliance and Policies Could Better 

Safeguard Veterans’ Benefits. GAO-10-241. Washington, D.C.: February 

26, 2010.

Veterans’ Benefits: Improved Management Would Enhance VA’s Pension 

Program. GAO-08-112. Washington, D.C.: February 14, 2008.

Medicaid Long Term Care: Few Transferred Assets before Applying for 

Nursing Home Coverage; Impact of Deficit Reduction Act on Eligibility Is 

Uncertain. GAO-07-280. Washington D.C.: March 26, 2007.

Medicaid: Transfer of Assets by Elderly Individuals to Obtain Long-Term 

Care Coverage. GAO-05-968. Washington D.C.: September 2, 2005.

Related GAO Products 

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