BILL ANALYSIS �
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 �Aid 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