The 3-year look back has eliminated the option of last-minute planning. Asset transfers made during the look-back period will have a penalty period imposed on the applying veteran or spouse that can last up to 5 years.

The Penalty for asset transfers will be calculated by using a set amount as a divisor.  The monthly maximum annual pension rate for a veteran with one dependent, which is currently $2,169 per month, will be used for a surviving spouse or a qualifying veteran as the divisor.
The penalty period begins on the first day of the month that follows the last asset transferred.

Remember, any asset transfers done BEFORE October 18th, 2018 will not be subject to the look-back period.

Example:

Jack is a single veteran with a net worth of $120,000 at the time of his submission of a VA pension application. (Recall that the net worth limit is $123,600 as of 10/18/18). However, Jack transferred $20,000 to a relative during the 36-month look back period. Had he not made the transfer, Jack would have $140,000 in net worth. This means that he has violated the look back period by $16,400 ($140,000 – $123,600 = $16,400). When calculating the penalty period for violating the look back rule, the calculations will be based on the amount that is over the net worth limit of $123,600, so $16,400. As mentioned above, the penalty period divisor, as of the time of this writing, is $2,169. Therefore $16,400 is divided by $2,169 and equals a penalty period of approximately 7.5 months. This means for this period of time, Jack is unable to receive pension benefits. As mentioned previously, the penalty period start date is the first of the month following the date from which the last asset transfer that violated the look back period was made.

• Example provided by Council on Aging.