The United States Department of Veterans Affairs (VA) Aid and Attendance program can be an excellent option for older wartime veterans and their widows. Among other requirements, there are four tests to qualify for Aid and Attendance, including military service, medical status, asset level, income level, and then documentation and proof of these requirements. The topic of this post will be the income requirement.
The 2012 Aid and Attendance maximum benefit amounts are as follows:
- $2,019 per month for a married veteran
- $1,703 per month for a veteran who is unmarried or who is widowed or a widower
- $1,094 per month for the surviving spouse of a veteran who has not remarried.
The income requirement can be confusing because the VA's Maximum Annual Pension Rate, which is the maximum benefit amount the VA will pay, is also an income limit.
The VA considers income from all sources to be income for Aid and Attendance purposes, including Social Security, pension, annuity payments, IRA distributions, and interest and dividends.
Illustration: Ted, age 77 and his wife, Lois, age 74, have $2,800 in combined pension and Social Security income. Ted is a veteran of the Korean War. Their $2,800 in monthly income, along with their savings, provided for a nice retirement, including occasional travel, until Ted was diagnosed with Alzheimer's disease and Lois subsequently suffered a stroke. Ted is in the earlier stages of the disease, but needs assistance with medication management, meal preparation, and transportation to medical appointments. In addition, his physician has recommended that he not live alone due to occasional periods of confusion. Lois still has her mind after her stroke, but has slowed down and can no long drive. Anything other than simple meal preparation is hard for her, and she also needs help with medication management. Initially, it would appear that Ted and Lois will not qualify for Aid and Attendance because their $2,800 in monthly income exceeds the $2,019 maximum annual pension rate.
However, there is another rule that helps many veterans and their spouses qualify in this situation. The VA will deduct certain regular and reoccurring unreimbursed medical expenses from the veteran and spouse's income. By regular and reoccurring, I mean that the amount paid is almost the same each month and the expenses are paid monthly. The result of this equation is called IVAP, or income for VA purposes. The regular and reoccurring medical expenses that help in this situation are:
- Medicare Part B and D premiums that are withheld from Social Security
- Monthly premiums for supplemental health insurance and prescription drug coverage
- Home care expenses, including payments to a family member who is providing care or a home health care company
- The costs of assisted living
- The costs of nursing home care
- The costs of other senior living facilities, including “independent living,” provided the facility is providing a protective environment and the need for such an environment is documented by the veteran or spouse's physician.
By unreimbursed, the VA means that the medical expenses will not count if they are reimbursed from another source, such as health care insurance.
In Ted and Lois' case, they have the following unreimbursed medical expenses:
- $99.90 is withheld from Ted's Social Security for Medicare Part B
- $99.90 is withheld from Lois' Social Security for Medicare Part B
- Ted and Lois pay $242.00 per month for supplemental health insurance coverage for both of them
- They are paying $5,000 per month to their assisted living facility, which includes room and board, daily meals, wellness checks, and medication management.
These unreimbursed medical expenses total $5,441.80. As such, Ted and Lois' income for VA purposes (IVAP) is negative $2,641.80. Since their IVAP is negative, Ted will receive the maximum monthly Aid and Attendance benefit for a married veteran of $2,019.00. This $2,019.00 in Aid and Attendance, along with their Social Security and pension income of $2,800, will result in a total monthly income of $4,819.00. Ted and Lois will have to cover the remaining shortfall between their total income and total costs of care from their savings, but the receipt of the Aid and Attendance will go a long way in slowing down the depletion of their assets.
There are other medical expenses that the VA considers unreimbursed medical expenses, such as prescription drug and physician co-pays, incontinence supplies, dental and optical expenses, hearing aids, medical mileage reimbursement, and medical supplies. Anyone who has had a spouse or elderly parent who needs long term care knows that these miscellanies expenses can be substantial. However, such expenses are rarely allowed by the VA to qualify for Aid and Attendance on the initial application because they are not considered regular and reoccurring enough. For instance, Ted and Lois spend substantial amounts on doctor co-pays and incontinence supplies, but the amounts vary quite a bit each month. For that reasons, the VA may not count them in the IVAP formula.
In my elder law practice, I often review VA award letters where the veteran was only awarded a small amount, such as $50, or was denied completely because these miscellaneous, irregular expenses were relied on to obtain the benefit. This occurs when the family submits the application themselves and is not aware of the VA's practice not to count such expenses on the initial application. Then, after 4 to 6 months, the veteran receives a small award letter or denial even though there are high unreimbursed medical expenses. This is surely a frustrating situation. It is true that you can add all of these unreimbursed medical expenses up at the end of the year, provided that you keep documentation and all receipts, and submit them to the VA on a medical expense report (VA Form 21P-8416). Then, assuming a qualifying case is otherwise in place, the VA is supposed to reimburse the veteran/surviving spouse for such miscellaneous expenses. However, that is a lot of paperwork and takes a long time. If you have them, it is better to rely on the major long-term care related unreimbursed medical expenses I outlined above. If you or your elderly loved one is not yet paying home care or facility expenses, it is best to meet with a VA accredited elder law attorney before submitting an application for benefits to review the income and medical expenses. There may be other regular and reoccurring unreimbursed medical expenses that are being paid that would count.
The income requirement is just one of the requirements that must be met to obtain Aid and Attendance. While there are more details, I hope this overview was helpful. You are welcome to contact me if you have any questions.