WASHINGTON - Sen. Ron Wyden, D-Ore., applauded Wednesday the Department of Veterans Affairs for making changes he has long advocated to better protect aging Veterans from financial scammers known as “pension poachers.”
Wyden said the reforms will help stop scammers who pose as “advisors” and profit by selling unsuspecting Veterans financial products they don’t need and pushing them to apply for benefits for which they would not normally qualify.
These poachers convince elderly Veterans to sell their homes, transfer assets, and pay exorbitant fees. In some cases, the VA does not approve Veterans for the benefit after they have locked assets away in difficult-to-tap financial products.
In addition, the financial maneuvering can often affect a senior’s ability to qualify for Medicaid benefits and other government assistance programs.
The new regulations go into effect on Thursday and will help ensure the pension “Aid and Attendance” benefit — designed to help elderly Veterans and/or their spouses who cannot afford essential services on their own — is no longer exploited by unscrupulous financial planners who profit from selling inappropriate financial instruments to Veterans and make sure that only applicants in need receive the benefit, the lawmaker said in a news release.
“These changes are long overdue but a welcome step forward in the fight to protect our Veterans from greedy scammers. Now, my work continues to ensure the VA implements this rule in a way that cracks down on poachers,” Wyden said. “It is imperative that Veterans who need this benefit have access. Because this new regulation includes additional restrictions that I did not propose, I will also work to make sure these limits don’t hurt those Veterans.”
Wyden introduced legislation to strengthen the program and protect Veterans after working with the Government Accountability Office to shed light on the issue. During the 2012 undercover investigation, GAO identified more than 200 organizations across the country that market financial and estate planning services to help potential pension claimants, who should not have been eligible, qualify for pension benefits.
The VA rule going into effect includes a provision from Wyden’s legislation that requires a three-year look back at an applicant’s financial history when they apply for the pension.
The GAO investigation also revealed that some of these organizations were overcharging Veterans for services — up to $10,000 — or profiting by selling potentially harmful financial products such as trusts or deferred annuities. Trusts can severely limit access to savings and deferred annuities may leave seniors without access to all their funds within their expected lifetime without facing high withdrawal fees.