There is a little known and little used veterans benefit called the Aid and Attendance Benefit, or Veterans Pension Benefit. This benefit can provide up to $1,800 a month to veteran or $900/widow or spouse and can be used for home care, assisted living and nursing home care.

This benefit is available to active duty veterans who served at least 90 days with at least one of those days occurring during a period of war.  Combat service is not required, only that the veteran was in the service during wartime and received an honorable discharge.

There currently only about 543,000 individuals receiving the Aid and Attendance Benefit, which represents only 4.7% of those who could be eligible.

Who is eligible for the Veteran’s Pension Benefit?

In order to receive the benefit, a veteran must meet an income and an asset test and, in the majority of situations, a medical needs test. If a Veteran’s Pension Benefit Applicant called a regional VA Benefits office to apply for benefits, the first thing the Veterans Service Representative would usually ask for is the total household income, the amount of assets the veteran owns, and his or her medical status.

Income Test

The household income of the veteran or the surviving spouse cannot exceed the Maximum Allowable Pension Rate (MAPR) for that category of application. There are several categories of pension incomes, so determining eligibility can be complicated. In addition, under certain circumstances, a veteran’s income can actually exceed the MAPR, provided there are enough non-reimbursed medical expenses to reduce the household income below the threshold.

Example: A husband and spouse apply for the Aid and Attendance Benefit. They do not have a medical rating and their combined income cannot exceed $1,220 a month or $14,643 a year from all sources. However, their income can be reduced by non-reimbursed medical expenses to fall under the $1,220/mo threshold. Some examples of qualifying non-reimbursed medical expenses include medical insurance such as Medicare Part B ($96.40 a month) and certain medical expenses associated with assisted living care, or home care costs. The rules can be quite complicated, but it can pay to investigate your eligibility.

Asset Test

As a rule of thumb, veterans applying for the Aid and Attendance Benefit cannot own cash equivalent assets of more than $80,000. However, this is not a hard regulation; it is the generally accepted limit because regional Veterans Service Representatives are required to file paperwork justifying approved applicants if they have assets that exceed $80,000.

Counting Assets: The VA is primarily interested in those veterans who have more than $80,000 in cash and cash equivalent assets such as stocks, bonds, and similar accounts. A personal residence along with a reasonable amount of land, automobiles for personal use, and personal property are normally exempted from the asset test.

Rearranging Assets to Qualify: Veterans can get can get creative with their assets and rearrange them so as not to have too much money to qualify for the Veteran’s Pension Benefit. Veterans can gift assets to someone who does not live in the same household, or a portion of the assets can be converted into an annuity to create immediate cash flow. However, if the veteran chooses this route, he should be careful not to create too much cash flow, which could reduce or eliminate the pension eligibility.

Enlist professional help when rearranging assets. There can be legal ramifications when assets are transferred or rearranged. One topic in particular to be aware of is interfering with Medicaid benefits. Assets reallocated to qualify for VA benefits could create penalties for Medicaid eligibility. Be sure that if you rearrange assets that you get the professional help you need to do be able to qualify for the Aid and Attendance while still qualifying for other benefits.

Medical Needs Test

The most important qualification to receive the Veterans Pension Benefit is demonstrating a medical need for assistance or supervision due to a disability. Certain medical costs can qualify as deductions to reduce household income levels. The high costs that accompany long term care such as nursing home care, assisted living, or home care are sufficient to allow medical deductions for a veteran to qualify for the Veteran’s Pension Benefit.

If the veteran under age 65, he or she must be totally disabled to receive the benefit and must provide medical documentation to support his claim. Veterans over age 65 do not have a disability requirement to receive benefits. Surviving spouses may also apply for a Death Pension benefit. In these situations, the deceased veteran did not have to meet any disability requirements nor does the surviving spouse need to meet any disability requirements, regardless of age.

Most of the veterans and surviving spouses who qualify for the Aid and Attendance benefit qualify with low incomes and have few cash assets. They usually meet both the income and asset tests without the need for the special provision for medical expense deductions to reduce income.

Take advantage of your Veteran’s Benefits - That’s what they are for!

This is just one of many Veteran’s Benefits Programs that is underutilized because it is complicated to qualify for and it is not well known. However, don’t let the complicated qualifications discourage you from applying. This is one program that has a lot of flexibility when determining eligibility.

If you know a veteran who is in need of assistance, direct them to their local regional Veteran’s Benefits Office. There may just be a program they qualify for. They sacrificed, and they have earned these benefits.