New Veterans Administration Pension Benefit Rules Went Into Effect October 18

The Veterans Administration just rolled out sweeping new eligibility rules for veterans and their spouses who require long-term care. The rules apply to needs-based pensions, such as Aid & Attendance, which is a program that helps veterans and their families to offset the cost of out-of-pocket medical expenses. For example, a veteran or their spouse who receives care at home or in a facility can receive additional money each month from the Aid & Attendance pension if their income falls below a certain threshold as a result of out-of-pocket medical costs.

Until this month, in order to qualify for Aid & Attendance, the government only took into account a family’s monthly income and medical expenses. Although there was a ballpark maximum asset amount a family could have, there was no hard and fast asset limit. Better yet, there was no lookback period for gift transfers and no gift penalties imposed, which made the program more attractive compared to Medical Assistance (Medicaid). Now, that is no longer the case.

The new rules establish a maximum “net worth” limit, which takes into account both assets and annual income of the veteran and their spouse. That net worth limit is pegged to the community spouse resource allowance under Medicaid, which this year is $123,600. If a veteran and their spouse (if married) have annual income (less out-of-pocket medical expenses) plus total assets in excess of this asset limit, they can no longer qualify for Aid & Attendance. They will have to either reduce assets or reduce income (keeping in mind that an increase in care costs can have the effect of reducing income), in order to qualify. The veteran or spouse’s primary residence, including 2 acres surrounding the home, is excluded from the asset limit.

In addition, the new rules impose a 36-month lookback period for transfers of assets for less than fair market value. (This is less stringent than the 60-month lookback period for Medicaid.) The penalty period is calculated by taking the sum of all gift transfers made within the lookback period and dividing it by the maximum monthly pension amount, which determines the number of months that the veteran or spouse is ineligible for VA pension benefits. A penalty period begins to run on the first of the month following the date of the last gift transfer. Only gift transfers that result in financial eligibility are penalized, however; if the veteran or spouse was already below the net worth limit, or if they were close to it, the penalty is reduced or can be zero depending on the circumstances.

The takeaway: Veterans and their families who are considering applying for Aid & Attendance benefits through the VA should consult a VA-accredited attorney like me as soon as possible to determine whether they need to wait to apply due to the new transfer penalty rules and whether they meet the new net worth limit. Please contact me if you have questions.

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The Importance of Regulatory Compliance for Ag Suppliers

If you’re in the business of selling farm inputs to farmers, you may not know that simply having the wrong label on a product could result in a fine of almost $20,000 per sale. What may seem like an inconsequential difference between one label and another could result in crippling fines when it comes to the sale of products regulated by the U.S. Environmental Protection Agency. Earlier this year, the EPA raised its maximum fine amount to $19,446 for violations of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). Just ten years ago, the maximum fine per violation was just $6,500. Products regulated and subject to penalties under FIFRA include pesticides, herbicides, fungicides, and similar products.

Under FIFRA, all pesticides must have a label approved by EPA, and the label must be displayed on the product. The label provides instructions on safe handling to ensure the safety of the applicator as well as the safety of the environment. Two products can have very similar sounding names, but still have very different labels, which can make following FIFRA a regulatory challenge. If a product has been mislabeled, each sale of that product is considered a separate and independent violation. So, if a coop makes 1,000 sales of a mislabeled product, they could incur fines of almost $19 million.

The best medicine is always prevention, which is why it’s important to have someone on staff whose job it is to ensure compliance with all applicable state and federal regulations. For businesses that have an internal audit program in place, EPA rewards self-reporting of violations by offering reduced fines so long as the audit program complies with certain criteria. It is important to remember that all self-discovered violations must be reported to EPA within 21 days. EPA has an eDisclosure system for online reporting.

For businesses already facing a potential fine, it’s important to understand the process and your rights. EPA will first send a Notice of Intent to File Administrative Complaint. This Notice will inform the violator of the basis for the alleged violation and a proposed fine. The violator has the opportunity to negotiate with EPA to reduce the fine by, for example, implementing a Supplemental Environmental Project (SEP) to mitigate the harm caused. After a Complaint is filed against the company, the company has the opportunity to appeal the fine to an Administrative Law Judge (ALJ) who works for the agency. From there, the business can appeal the ALJ’s decision to the Environmental Appeals Board (EAB), which is the last stop before the violator can appeal directly to federal district court. As you can see, the appeals process can be lengthy and expensive, which is why prevention is so important.

For more information on EPA compliance or if you have questions, contact me or my colleagues at FMJ for help.

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Employment rules to know when employing commercial drivers

Farmer co-ops and farm businesses that employ commercial drivers for trucking or hauling products need to be aware of certain employment laws that apply specifically to commercial drivers.  Failure to follow these rules could lead to fines, suspension of business, and impoundment of commercial vehicles.

1. US Department of Transportation Drug & Alcohol Policy.

Most employers have some type of drug and alcohol policy for their employees that restricts the use of intoxicating substances while on the job.  What you might not know is that, for commercial drivers, the federal Department of Transportation requires employers to have a specific drug and alcohol testing program in place and to inform their employees about the drug and alcohol testing policy.  Failure to do so can result in fines, suspension of business, or vehicle impoundment.

The rules are complicated, but in essence employers must perform drug and alcohol tests on all commercial drivers of vehicles with a gross vehicle weight rating of 26,001 or more pounds.  Testing must be undertaken prior to employment, at random, when there is reasonable suspicion of substance use, after an accident, when an employee is returning to duty after being removed, and follow up testing as necessary.  Employers may contract with an authorized service agent to provide the testing services.

In addition, employers must have a written policy and must provide the policy to their employees.  It's a good idea to include this policy in the employee handbook or manual.

More information is available at the DOT's website and in the DOT's Employer Handbook.

2. Special overtime rules for commercial drivers.

Most employers know that you're supposed to pay employees time and a half for hours worked in excess of 40 hours per week.  But, this rule does not always apply to commercial drivers.  If you don't know the rules, you might be paying too much or too little in overtime to your employees.

The rule is called the "motor carrier exemption."  Ordinarily, under the Fair Labor Standards Act, an employee is entitled to one and one-half times their "regular rate" for all hours worked over 40 that week.  But under the Motor Carrier Act, some employees are exempt from this requirement.  An employee is exempt if:

1. They are employed by a motor carrier (transportation industry) or motor private carrier (the employee transports the employer's goods);

2. They are employed as a driver or have other duties that affect the safety of operation of motor vehicles (includes, among others, someone loading goods on and off a vehicle or servicing a vehicle);

3. The employer's vehicles have a gross vehicle weight rating of at least 10,001 pounds; and

4. The employee drives or reasonably could drive across state borders.

If an employee meets all four criteria, the employer is not required to pay time and a half.  The employee is still subject to state and federal minimum wage requirements, however.

These rules are complicated, and a violation of these rules can come with expensive fines or obligations to pay back wages, which is why consulting an attorney with experience in this area is important.  Contact me or the other great attorneys at Fafinski Mark & Johnson, P.A. if you have questions or concerns.

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