Aid and Attendance Pension Count as Income for Medicaid

While in most cases, one’s VA Aid & Attendance (A&A) monetary benefit does not count as income for Medicaid eligibility purposes, this is not always the case. The is because the way one’s A&A monthly payment is viewed varies based on the state in which one resides. https://www.medicaidplanningassistance.org/va-pension-aid-and-attendance/

The Aid & Attendance benefit is a monthly cash benefit for veterans and surviving spouses who require assistance with their Activities of Daily Living and receive the Basic Veterans Pension or the Basic Survivors Pension. Since A&A is considered an “add on” benefit to the Basic Pension, the monthly cash benefit can be broken down into two parts; one for the Basic Pension and one for A&A. While some states will disregard the Basic Pension plus A&A in its entirety from Medicaid’s income limit, other states will count the Basic Pension portion towards Medicaid’s income limit and disregard the A&A portion, and a few states will count both the Basic and A&A portions towards the income limit.

As an example of disregarding the A&A portion, take a veteran with no dependents who receives the maximum A&A pension amount, which we will say is $2,300 / month. If that same veteran were not eligible for A&A and only received the maximum amount for the Basic Pension, let’s say they would receive $1,380 / month. Therefore, if the veteran receives both the Basic Pension and A&A, the Basic Pension portion of the cash benefit is $1,380 / month and the A&A portion is $920 / month. In states that count only the Basic Pension benefit towards Medicaid’s income limit, $1,380 / month would count towards Medicaid’s income limit. The $920 / month for the A&A portion of the benefit amount would not count towards Medicaid’s income limit.

Note that single veterans (and surviving spouses) with no dependent children who receive the A&A Pension and reside in a Medicaid-funded nursing home will have their A&A benefit reduced to $90 / month. (Benefits are not reduced if the individual resides in a VA state veterans home). This reduced pension can generally be kept by the individual. In some states, it will replace one’s Personal Needs Allowance (PNA), and in other states, a Medicaid beneficiary can keep their reduced pension in addition to a PNA. To be clear, if a veteran is married or has a dependent child, their A&A benefit amount will not be reduced. However, the individual will still be required to pay nearly all of their income towards their nursing home costs with the exception of a PNA and potentially a Monthly Maintenance Needs Allowance for a non-applicant spouse.

Calculating one’s income for Medicaid qualification purposes can be confusing, particularly when it comes to considering one’s VA pension benefits. In order to find out how Medicaid calculates VA A&A Pension income in a specific state, one is highly encouraged to contact a Professional Medicaid Planner.