The Department of Veterans Affairs pension program design and management do not adequately ensure that only veterans with financial need receive pension benefits, GAO has said.
While the pension program is means tested, there is no prohibition on transferring assets prior to applying for benefits as there is with Medicaid, according to GAO-12-540. (It said it found a case where a claimant transferred over a million dollars less than three months prior to applying and was granted benefits.)
Further, the department’s process for assessing initial eligibility is inadequate, said GAO. For example, the application form does not ask for some sources of income and assets such as private retirement income, annuities, and trusts, and the form also does not ask about asset transfers — information the VA needs to determine whether these assets should be included when assessing eligibility.
GAO called on Congress to 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.
It called on the department to verify financial information during the initial claims process, strengthen coordination with VA’s fiduciary program, and provide clearer guidance to claims processors assessing claimants’ eligibility.
VA generally agreed but raised concerns about the potential burden on claimants and recipients of verifying reported financial information but said it would study the matter.