Are VA Aid and Attendance Benefits Countable as Income by Medicaid? (Part 1)

New Jersey has several Medicaid programs.  Some have a strict income cap of $2130 per month of gross income as we saw last week with the assisted living program.  In 2013, if you have more income than $2130 per month you won’t be eligible for these programs.  So what counts as income?

Social Security and pension definitely count.  Interest income on assets is not really an issue because the Medicaid applicant must have no more than $2000 per month.  The interest will be negligible.  But what about VA Aid and Attendance benefits?  At what could be as much as $1113 a month for a widowed spouse, $1733 for a single veteran and $2054 for married veteran, that income could push some people over $2130 per month.  So, are these benefits counted or not?

A 25 year old New Jersey Medicaid communication states that the VA Aid and Attendance benefit is not counted as income when determining if an applicant is over or under New Jersey’s Medicaid income limit. That would seem to be a straightforward answer, but  it really isn’t.  That’s because not all the VA pension received under the Aid and Attendance program is for “aid and attendance”.

There is a base pension amount to every award and there is also a dependent pension portion in the case of married couples.  Those amounts are counted as income for Medicaid purposes.  What has to be done in each instance is subtract out only the Aid and Attendance portion from the overall award when determining the income limits of a Medicaid applicant.  That could be as much as $417 per month in the case of a non-veteran widowed spouse and $694 per month for a veteran.

That will push some people over the income cap, making them ineligible for a few of New Jersey’s Medicaid programs such as assisted living and home based care.  The initial reaction might then be to skip the VA benefit to preserve Medicaid eligibility in the future.  But, next week I will tell you why, in most instances, that initial reaction would be totally wrong.

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