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How is VA Pension counted for Medicaid purposes?

This is not an easy answer as you may think!

When someone is on Medicaid in Florida, there is both an income and asset limit for eligibility. The financial guidelines are provided at this link. Medicaid counts the applicant's gross income for qualification purposes. When income exceeds the income cap, a qualifed income trust is necessary in order to qualify for Medicaid. 

But what about when the Medicaid applicant is receiving VA Pension?  VA Pension can be very helpful for paying for an elder's assisted living or in-home care. VA Pension Benefits are outlined here.  The highest Pension benefit is known as "aid and attendance," with monthly benefits as follows (2020):

  • Married Veteran:              $2,266/m
  • Single Veteran:                 $1,912/m
  • Surviving Spouse:            $1,228/m

But if someone is applying for Medicaid, how much of the Pension income is countable for gross income purposes? The answer is NOT ALL!  Medicaid excludes "aid and attendance" income from the gross income calculation.  But the answer does not even stop there!  Aid and Attendance is only the highest level of VA pension benefits.  Lower levels are "base pension" and "housebound."  Interestingly, the very base pension amount is countable as income for Medicaid purposes. For 2020, base pension levels are as follows:

  • Married Veteran:             $1,501/m
  • Single Veteran:                $1,146/m
  • Surviving Spouse:           $   767/m

An example is as follows:

Surviving spouse of a wartime veteran is receiving $1,228/m in VA Pension Aid and Attendance (the maximum). Her Social Security income is $1,500/gross per month. Her income for Medicaid purposes towards the income cap ($2,349/m in 2020) is $2,267/m. This means that she does not need a QIT to obtain or keep Medicaid benefits. ($1,500 plus $767 (the base pension amount) = $2,267/month, which is lower than the Medicaid income limit). Notice that only the $767/m counted as income for Medicaid purposes, not the full $1,228/m that she receives from the VA.

When you are applying for Florida Medicaid and VA Pension benefits are already coming in (mostly meaning Aid and Attendance) then these calculations will be very important.

It is also important to note is that if the elder receives Medicaid in the nursing home, the VA will need to be notified and then his/her VA Pension (including Aid and Attendance) will eventually be reduced to $90/month, which is not countable as income for Medicaid purposes.

VA Pension income does not include any VA Disability payments. VA disability payments (based upon an injury while serving our country) is all countable income for Medicaid purposes, so it is important to know what type of VA income is being received.

If you want to learn more about VA or Medicaid benefits, please feel free to attend one of my free monthly seminars.

If you want to learn more about Medicaid benefits in Florida, please look here.

 

D. Rep DeLoach III
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Estate Planning and Board Certified Elder Law Attorney