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MISSISSIPPI DIVISION OF MEDICAID Eligibility Policy and Procedures Manual CHAPTER 200A – Income: ABD Categories Page |55 Effective Month: July 2025 5. Unreimbursed Medical Expenses (UME) Included in Compensation Payments For needs-based compensation (Parents’ DIC), VA may deduct unreimbursed medical expenses from any countable income. The VA considers expenses, which exceed 5% of the maximum annual VA pension payment, as UME. This computation may result in an increase in a compensation payment or in an extra payment. An increase or extra payment resulting from VA’s consideration of UME is not income and is excluded from the total VA payment when determining eligibility and Medicaid Income (if applicable). UME is not countable as income for institutionalized individuals eligible under an Income Trust. Unspent VA payments resulting from UME are resources if retained into the month following the month of receipt. 6. Special Monthly Compensation (SMC) Veterans with certain specific, very severe disabilities can receive a higher monthly compensation rate that is above the 100% disability rating. The VA calls this payment Special Monthly Compensation (SMC), and it is paid for the veteran’s need of daily aid and attendance or regular health services. SMC is not income and is excluded from the total VA payment when determining eligibility and Medicaid Income (if applicable). The VA will take dependents’ needs into account when determining compensation for the veteran or surviving spouse compensation payments, resulting in increased allowances for dependents. An increase in a payment for dependent(s) is an augmented payment. A payment made directly to the dependent(s) is an apportioned payment. There is no increased allowance for dependents for surviving child and parents’ DIC payments.