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Title 8: Medicaid Page 62 Iowa Department of Health and Human Services Employees’ Manual Chapter E: Income Non-MAGI-Related Veterans Affairs Payments Revised April 11, 2025 Payments for Dependents If the VA denies apportionment and the veteran makes no payment to the client, do not consider the augmentation amount as the client’s income in the month following the month of the VA’s response date. Educational Benefits Legal reference: 20 CFR 416.1121 Count a VA educational benefit as unearned income, unless it is for a rehabilitation payment or a withdrawal of the veteran’s own contribution. The portion of a VA educational benefit that is a withdrawal of the veteran’s contribution is a conversion of a resource and is not income. Some VA educational benefits are for vocational rehabilitation, which is considered a social service and not counted as income. Training for a specific job skill or trade (vocational training) is not a social service; however if it is part of the vocational rehabilitation, treat it as a social service and do not count as income. VA educational benefits that are counted as unearned income can be excluded if they are used to pay the cost of tuition, fees, or other necessary educational expenses. See Educational Assistance. Payment Adjustment for Unusual Medical Expenses Legal reference: 20 CFR 416.1103(a)(7) VA defines “unusual medical expense” as unreimbursed medical expenditures that exceed five percent of the person’s annual applicable maximum VA payment rate. If the person receives a needs-based VA pension or compensation payment, the unusual medical expenses are deducted from the countable income used to compute the VA benefit amount. This may result in a higher VA payment amount. The portion of a VA payment that is attributable to unusual medical expenses (UME) is not considered as income in determining eligibility or client participation. EXCEPTION: The portion of a VA payment that is attributable to UME is considered as income in determining client participation for veterans or surviving spouses of veterans who do not have a spouse or dependents and reside in the Iowa Veteran’s Home.