Aging military veterans are being used by a growing coterie of unethical benefits advisers who see an opportunity to rip off a pension program and veterans alike. There are now more than 20,000 advisers accredited by the Department of Veterans Affairs, a program with little oversight. A recent investigation by the New York Times found that some use their credential to peddle false claims to veterans and their families about rich VA benefits available for the taking, or they help clients hide assets from the government to qualify for programs meant for destitute veterans. Tighter laws and oversight are needed to reduce a new cottage industry of fraud and abuse.
Too many lawyers, financial advisers and insurance brokers are becoming accredited VA benefits advisers to exploit loopholes in the Veterans Pension program. The program can offer more than $20,000 annually to wartime veterans who are over 65 or disabled, but there are strict income and asset limits. An individual with no dependents must make less than $12,465 to qualify, but advisers are finding ways around those limits.
There are now 200 firms nationwide that specialize in VA retirement benefits. The reason is that, unlike programs such as Medicaid, the VA has no power to reject benefits for veterans who have transferred income and assets to qualify. Other federal programs respond to this form of financial manipulation by establishing a look-back period. Legislation is needed create a similar mechanism for veterans programs.
If tighter rules aren't adopted, the program's viability will be put at risk due to rising costs. The VA paid 514,000 veterans or their survivors $5.1 billion under the program last year, compared with $3.4 billion in 2007. And an aid and attendance benefit, which is financial help for veterans and their survivors to live independently, is also rising, up 30 percent from 2006, to 206,000 recipients.
In addition to disguising assets to cheat the government, some accredited advisers engage in unethical conduct toward their veteran clients, according to the New York Times report. The rules say they cannot charge for advice, but advisers often find ways to profit by recommending costly annuities, insurance or other products to veterans who can be lured into a trusting relationship by the accreditation. When the advisers connect up with assisted living and retirement communities, veterans can be convinced to move into a place they can only afford with the added pension benefit, only to be denied later by the VA.
After a critical report by the Government Accountability Office in August, the VA says it plans to do more robust background checks before granting accreditation and will look more closely at the financial information provided by veterans seeking benefits to make it easier to see that assets were shifted. The Veterans Pension program was designed to help the most desperate people who once served the country in war, but too many lawyers and other unethical professionals are lining their own pockets instead.