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If the individual’s countable income is too high to allow them to qualify for any VA pension per annually published MAPR levels (without Aid & Attendance) http://www.benefits.va.gov/pension/current_rates_veteran_pen.asp, medical expenses which exceed 5% of the base MAPR may be used to offset the countable income. When the pension is granted only due to ongoing medical expenses, the entire amount of a VA payment is considered “Aid & Attendance” and may be exempted in initial budgeting. Example: John, a single veteran aged 67, has countable income of $15,000 per year, an amount which is over his applicable MAPR. However, John also has ongoing medical expenses which total $5000 annually. These expenses offset his income so that he is awarded Aid & Attendance in the amount of the MAPR minus his remaining countable income of $10,000. If his medical expenses are later reduced because Medicaid begins to pay them, this will increase the income which the VA counts for him, and the Aid & Attendance payments may stop.

Applicants whose other income is less than the MAPR must provide a current breakdown of which portion, if any, of the VA benefit is Aid & Attendance. Only the Aid & Attendance amount will be discounted in the budget. This would also apply for individuals receiving VA compensation (based on service-related disability) instead of VA pension. Updated details from the VA should be requested at each annual redetermination. Budgeting After Medicaid is Approved: For institutionalized applicants/recipients without spouse or dependent/s, the total VA pension payment to the incapacitated individual will be reduced to $90 after Medicaid is approved.1 Whether the payment was regular pension, Aid & Attendance, or some combination of award reasons becomes irrelevant at this point. The reduced pension is exempt at all stages of budgeting. A veteran or veteran's widow is entitled to keep the normal personal needs allowance (currently set at $5229) given to institutionalized members without regard to the $90. The timeframe for the reduction can vary based on when the VA acts on the reported change, so verification of the effective date of the reduction to $90 must be provided. If the pension recipient failed to report the change to the VA in a timely manner, the VA will pursue recovery for all applicable months to recoup the excess payments, but the member is not penalized if the delay is on the part of the VA. The pension recipient has the option to ask the VA to waive the 60-day “due process period” to make the reduction effective as soon as possible, but they would need to consult the VA on specific rules. For institutionalized applicants/recipients with a spouse or dependents, the VA does not automatically reduce payment to $90 a month after Medicaid approval. These members have the option to request a reduction to $90 if they determine it would be more beneficial to their family; any such arrangement would need to be verified by current documentation from the VA. For non-institutionalized applicants/recipients, there is no automatic or optional reduction to $90 by the VA, but if medical expenses were used to calculate the award there will likely be an adjustment by the VA due to those expenses now being paid by Medicaid.