How does having a VA Pension such as Aid & Attendance or Housebound affect Medicaid eligibility? Can someone receive both?
A person can be dually eligible for the Veterans Affairs (VA) Aid & Attendance (A&A) Pension and Medicaid. In other words, it is possible for one to receive benefits from both the VA and Medicaid simultaneously. However, the cash payment received via the VA might be counted towards Medicaid’s income limit, potentially causing one to be denied benefits due to excess income.
To begin, the VA Aid & Attendance Pension is a monthly cash allowance for wartime Veterans and surviving spouses who require assistance with daily living activities. This benefit is intended to help cover the cost of long-term care, whether it be in the home, an assisted living residence, or a nursing home facility. The A&A Pension is an add on benefit to the Basic Veterans Pension, or in the case of surviving spouses, the Basic Survivors Pension. This means a person must not only meet the eligibility criteria for the Basic Pension, but also for the A&A Pension. While we won’t dive into the eligibility criteria as part of the answer to the above question, one can find the relevant information here.
There is a Maximum Annual Pension Rate (MAPR) to which a Veteran or surviving spouse is entitled. As of 2020, the maximum benefit amounts for the Basic Pension + Aid & Attendance Pension are as follows:
A single Veteran without a dependent child may be entitled to as much as $22,938 per year, or stated differently, $1,912 per month.
A married Veteran may receive as much as $27,194 per year, which equates to $2,266 per month.
A surviving spouse may be awarded up to $14,761 per year, or put differently, $1,230 per month.
As mentioned previously, the MAPRs above include the total cash benefit amount for the Basic Pension plus the “add on” Aid & Attendance Pension. What this means is the Basic Pension portion can be separated from the A&A Pension portion. (This information will be relevant further down in the explanation as to how having an A&A Pension affects Medicaid eligibility). In 2020, the maximum benefit amount for just the Basic Pension is as follows: A single Veteran without a dependent child may be awarded up to $13,752 per year, which equals $1,146 per month.
A married Veteran may be entitled to as much as $18,008 per year, or put differently, $1,501 per month.
A surviving spouse may receive as much as $9,223 per year, equivalent to $769 per month.
Like with the A&A Pension, Medicaid can also help to cover the cost of long-term care. This is often done via Institutional Medicaid, also called Nursing Home Medicaid, and Home and Community Based Services (HCBS) Medicaid Waivers. Via HCBS Waivers, seniors and disabled persons are able to receive supportive services in their homes or the homes of a loved one. Based on the Waiver, program participants might also be able to receive Medicaid benefits in assisted living residences or adult foster care homes. (Please note that room and board for assisted living and adult foster care homes is not covered by Medicaid).
When considering both the VA Aid & Attendance Pension and Medicaid, one must first apply for VA benefits. This is because Medicaid wants to ensure all other payment sources have been considered and applied for first. Therefore, the eligibility requirements for long-term Medicaid become relevant to this discussion. Generally speaking, in 2020, the income limit for an applicant is $2,349 per month. (Please note that income limits do vary slightly by state. See state-specific eligibility criteria ).
Generally speaking, the cash benefit from the VA Aid & Attendance Pension should not count as income for Medicaid eligibility purposes. However, this doesn’t necessarily hold true across all of the states. When a Veteran or surviving spouse receives the A&A Pension, the VA considers a specific amount to be for the Basic Pension and the remaining amount for A&A. While some states may disregard the pension in its entirety from Medicaid’s income limit, other states may count the Basic Pension amount as income. (To see how VA income is considered in the state in which you reside, it is highly suggested that you reach out to a professional Medicaid planner for guidance. Find one here.)
As an example, in Florida, the Basic Pension benefit amount is counted towards Medicaid eligibility, while the A&A Pension benefit amount is not. If one recalls the breakdown of the A&A Pension and Basic Pension above, this means that the following amount of income will count towards Medicaid’s $2,349 per month income limit:
A single Veteran without a dependent child = $1,146 per month
A married Veteran = $1,501 per month
A surviving spouse = $769 per month
Now, say an applicant’s only income is their Social Security check and it is $783 per month. In all three scenarios, the applicant would meet Medicaid’s income limit when the Basic Pension amount was added to their Social Security income. However, if an applicant has a monthly income when combined with the Basic Pension amount that exceeds Medicaid’s income limit ($2,349 / month), he / she does not meet Medicaid’s income limit and will not qualify for Medicaid.
Furthermore, Medicaid has an asset limit of $2,000 for a single applicant. The VA, on the other hand, has a net worth limit of $129,094 (in 2020). This net worth limit includes one’s annual income plus any countable assets. (This excludes the value of one’s home). This means that an applicant may meet the VA’s net worth limit, but not Medicaid’s asset limit. (As with Medicaid’s income limit, asset limits also tends to vary by state. Asset limits by state can be found here).
For applicants who are over Medicaid’s income and / or asset limit(s), it is possible that with the assistance of a Medicaid planning professional, finances can be restructured to meet Medicaid’s limit(s). Contact a planner here.
As a side note, if one is receiving both Medicaid and a VA Pension, is single, does not have a child, and resides in a nursing home, the individual will only be able to receive $90 in pension benefits. However, there is one exception; Veterans who reside in States Veteran Homes. To be clear, this $90 rule does not include married Veterans who are nursing home residents. Nor does this rule extend to persons living in assisted living residences or receiving long-term care at home.