I get this question frequently. Does New Jersey Medicaid count the VA benefit as income for eligibility purposes is more specifically the question. The answer is “no, it is not”. There is a specific Medicaid Communication (25 years old) that states that VA Aid & Attendance benefits are not counted as income. Please be aware that there are other VA benefits, however, that may be treated as income and also be aware that it is the aid and attendance portion of the benefit that is not countable. How much that turns out to be depends on each individual case. You must examine your award letter.
Please also note that the VA benefit will drop to $90 per month when the recipient qualifies for Medicaid. When there is a spouse at home, the community spouse may be entitled to receive more than $90 per month. Our practice with our elder law clients is to notify the VA when Medicaid is approved (but not when we file the application since we don’t want the benefit to stop until Medicaid is approved).