BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 180
                                                                  Page  1

          Date of Hearing:   June 28, 2011

                       ASSEMBLY COMMITTEE ON VETERANS AFFAIRS
                                 Paul J. Cook, Chair
                     SB 180 (Corbett) - As Amended:  May 3, 2011
           
          SUBJECT  :   Consumer transactions: public social services: 
          unreasonable fees.

           SUMMARY  :   This bill adds to the definition of "public social 
          services" those activities and functions administered or 
          supervised by the United States Department of Veterans Affairs 
          ("USDVA") and the California Department of Veterans Affairs 
          ("CDVA").  

           EXISTING LAW:  Existing federal law prohibits the preparation, 
          presentation, or prosecution of any claim under laws 
          administered by the Secretary of the USDVA unless that 
          individual has been recognized for such purposes by the 
          Secretary.  (38 U.S.C. Section 5901)  Existing federal law 
          prohibits charging fees for the aid, assistance, or preparation 
          of veteran's benefits applications.  (38 U.S.C. Section 5904)

          Existing law provides that it is an unfair or deceptive trade 
          practice for any person to charge or receive an unreasonable 
          fee, as defined, to prepare or aid an applicant or recipient in 
          the procurement, maintenance, or securing of public social 
          services.  (Civil Code Section 1770(24).)  

          Existing law defines "public social services" as those 
          activities and functions of state and local government 
          administered or supervised by the Department of Health Care 
          Services, the Department of Public Health, or the Department of 
          Social Services, and involved in providing aid or services, or 
          both, including health care services and medical assistance, to 
          those persons who, because of their economic circumstances or 
          social condition, are in need of that aid or those services and 
          may benefit from them. 

          Existing law requires the court to award treble damages to the 
          plaintiff whenever it is proven by a preponderance of the 
          evidence that a defendant has charged or received an 
          unreasonable fee for those services.  (Civil Code Section 1780)

          This bill includes in the definition of "public social services" 








                                                                  SB 180
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          activities and functions administered or supervised by the USDVA 
          and the CDVA involved in providing aid or services, or both, to 
          veterans, including pension benefits.

           FISCAL EFFECT  :   Unknown.  This bill is not keyed fiscal.

           COMMENTS  :   The USDVA Aid and Attendance program has asset and 
          income limits for eligibility.  A couple must neither have 
          assets that exceed $80,000, excluding a residence, nor an income 
          of more than $1,900 a month to be eligible.  So-called 
          "financial advisors" target those with too much wealth to 
          qualify for this benefit.  They often counsel them to place 
          their assets into irrevocable trusts and/or deferred annuities, 
          effectively separating them from their assets in the event of a 
          future need.  These advisors often charge large fees for their 
          services.




          According to the author:

            "The Aid and Attendance Program administered by the federal 
            Veterans Administration (VA) is a safety net for low wealth 
            veterans and their spouses who cannot afford to pay for 
            medical supplies or in-home healthcare.  ?

            Financial predators target high wealth veterans who otherwise 
            would not qualify for the ÝAid and Attendance Program] and 
            counsel them how to move their assets into 'safe harbors' such 
            as irrevocable trusts and deferred annuities.  These advisors 
            charge $10,000 or even more for their services. ?

            SB 180 prohibits anyone from charging an unreasonable fee for 
            assisting a person to qualify for a federal pension benefit 
            program, such as Veterans Aid and Attendance.  SB 180 
            diminishes the incentive of financial advisors who counsel 
            seniors to artificially impoverish themselves to qualify for a 
            government benefit."

          This bill will discourage the practices of charging an 
          unreasonable fee and preying upon veterans and their families.  
          In addition it will discourage the highly ethically and legally 
          questionable practice of artificial impoverishment in order to 
          obtain a government benefit to which the recipient would not 








                                                                  SB 180
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          otherwise be entitled. 

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Advocates for Nursing Home Reform (source)
          Consumer Attorneys of California
          Alameda County Veterans Affairs Commission
          California State Commanders Veterans Council
          National Association of Social Workers
           
          Opposition 
           
          None on file.
           
          Analysis Prepared by  :    John Spangler / V. A. / (916) 319-3550