Is Va Disability Considered Income For Medicaid eligibility? The answer isn’t always straightforward, but income-partners.net is here to clarify how these benefits are treated, helping you navigate the complexities of Medicaid eligibility and explore opportunities for partnerships and increased income. Understanding the nuances of VA benefits and Medicaid can unlock pathways to financial stability.
1. Understanding VA Payments and Medicaid Eligibility
Navigating the intersection of Veterans Affairs (VA) payments and Medicaid eligibility can be complex. It’s crucial to understand how different types of VA payments are treated when determining eligibility for Medicaid, especially since a successful partnership can hinge on this knowledge.
What Are the Most Common Types of VA Payments?
The VA provides various types of payments, each treated differently for Medicaid eligibility purposes:
- Pension
- Compensation
- Dependency and Indemnity Compensation (DIC)
- Educational Assistance
- Aid and Attendance Allowance
- Housebound Allowance
- Payment Adjustment for Unusual Medical Expenses
- Clothing Allowance
- Payments to Vietnam Veterans’ Children with Spina Bifida
How Are VA Payments Generally Treated for Medicaid Eligibility?
The treatment of VA payments for Medicaid eligibility depends on the nature of the payment. Some payments are considered income, while others are exempt. Knowing this distinction is key to optimizing your financial strategy and forming beneficial partnerships.
2. Augmented and Apportioned VA Payments Explained
To accurately determine Medicaid eligibility, it’s essential to understand augmented and apportioned VA payments. This knowledge can be invaluable in financial planning and identifying partnership opportunities.
What Is an Augmented VA Payment?
An augmented VA payment is a VA pension payment that is increased due to the presence of dependents. For Medicaid purposes, the augmented benefit includes both the designated beneficiary’s portion and the portions for any dependents.
How Are Augmented VA Payments Treated for Medicaid?
Typically, an augmented VA benefit is issued as a single payment to the veteran or the veteran’s surviving spouse. When veteran’s benefits are augmented for a dependent, the dependent’s portion is not considered countable income to the applicant/recipient (the veteran or veteran’s surviving spouse) of the check. If the applicant/recipient is the dependent, the applicant/recipient’s portion is countable income to the applicant/recipient.
What Is an Apportioned VA Payment?
An apportioned VA payment is a VA compensation payment made directly to the dependent of a living veteran. Apportionment involves direct payment of the dependent’s portion of VA benefits to a dependent spouse or child.
How Are Apportioned VA Payments Treated for Medicaid?
The VA decides whether and how much to pay by apportionment on a case-by-case basis, which reduces the amount of the augmented benefit payable to the veteran or veteran’s surviving spouse. A portion of a VA benefit paid by apportionment to a dependent spouse or child is considered VA income to the dependent spouse or child and is not treated as a support payment from the designated beneficiary.
3. VA Pensions and Medicaid Eligibility
Understanding how VA pensions are treated is critical for determining Medicaid eligibility. Navigate the specifics and gain clarity for your financial planning.
What Are VA Pensions?
VA pension payments are based on a combination of service and a non-service-connected disability or death. These payments are designed to provide financial support to veterans and their families.
Are VA Pensions Considered Income for Medicaid?
Most VA pension payments are needs-based, meaning they are considered unearned income. Therefore, the $20 general income exclusion does not apply to these payments. This is a key distinction that affects how eligibility is determined.
How Often Are VA Pensions Paid?
Typically, pension payments are made monthly. However, if the monthly payment due is less than $19, the VA will pay quarterly, biannually, or annually. The VA may also make extra payments if an underpayment is due.
Who Is Eligible for VA Pensions?
Pensions are paid to:
- A wartime veteran determined permanently and totally disabled for non-service-related reasons.
- The surviving spouse of a wartime veteran.
- The child of a veteran because of the non-service-related death of the veteran.
Are There Any Exceptions to the Rule That VA Pensions Are Counted as Income?
Yes, there are a few exceptions where the $20 general exclusion does apply:
- Pensions based on a special act of Congress.
- Pensions based on the award of the Medal of Honor.
- Pensions based on service in the Spanish American War (April 21, 1898, through July 4, 1902), Indian Wars (January 1, 1817, through Dec. 31, 1898), or Civil War (1861-1865).
Unless there is evidence to the contrary, it should be assumed that a VA pension is needs-based.
4. The 1979 VA Pension Plan and Its Impact
Learn about the 1979 VA Pension Plan and its impact on Medicaid eligibility. Understanding these historical changes can help you make informed decisions.
What Was the Impact of the 1979 VA Pension Plan?
The January 1, 1979, increase in VA pension benefits caused many SSI recipients to become ineligible. To address this, Public Law 96-272 provided protection to individuals “grandfathered” from December 31, 1978.
What Protection Was Offered to Those Grandfathered Under the 1979 Plan?
A person who had been eligible for a VA pension since before 1979 is not required to apply for an increase in VA payment for medical expenses, known as aid and attendance or housebound benefits. These additional payments are for unusual medical expenses and are considered exempt income that does not affect eligibility or co-payment.
What Should I Do If I Changed to the 1979 Pension Plan or Initially Obtained Entitlement After 1979?
Refer individuals who have changed to the 1979 pension plan or who initially obtained entitlement to a VA pension after January 1, 1979, to apply for aid and attendance or other potentially available benefits. However, there is no need to monitor for compliance in applying for other benefits when it is to increase the VA payment for medical expenses, since aid and attendance or housebound benefits are considered exempt income that does not affect eligibility or co-payment.
5. VA Pension Limits in Institutional Settings
Discover how VA pension amounts are capped for Medicaid recipients in institutional settings. Learn about the rules that apply to those in nursing homes and similar facilities.
What Is the VA Pension Limit for Institutionalized Medicaid Recipients?
According to VA law 38 U.S.C. 5503, the amount of the VA pension for an institutionalized Medicaid recipient who does not have a spouse or child cannot exceed $90 per month. This cap also applies to a surviving spouse with no child.
How Does This Cap Affect Medicaid Eligibility and Co-Payment?
If a single veteran or a single surviving spouse of a veteran is eligible for Medicaid-covered nursing home care, the maximum pension benefit is reduced to $90 for any month after the month of admission. This reduced pension is considered an aid and attendance allowance in all cases and not income.
How Is the $90 VA Pension Treated When Determining the Cost of Care?
The $90 VA pension may not be used to determine what the person in an institutional living arrangement must pay toward the cost of care. The limited VA pension, up to the amount of $90, is not counted as income in the eligibility or co-payment budget.
Is There Any Association Between the Reduced Pension and the Personal Needs Allowance (PNA)?
No, there is no association between the reduced pension and the personal needs allowance (PNA). If a veteran has income from other sources, that income may be considered countable. Calculate the co-payment to determine the amount of the veteran’s liability toward the cost of care.
What Should I Do If I Live in an Institutional Setting and Receive the $90 VA Pension?
Do not apply for other benefits if it is to increase the VA payment for medical expenses. VA aid and attendance and housebound allowances are considered exempt income and do not affect eligibility or co-payment.
Examples of PNA Calculations
Here are a few examples of how PNA is calculated for individuals with the capped $90 VA aid and attendance:
- Non-SSI Medicaid recipient in an institutional living arrangement: With VA aid and attendance capped at $90 per month and receiving other income, allow a PNA of up to $75, for a total up to $165 ($90 plus up to $75).
- Person living in an ICF/IID facility: The $90 capped VA aid and attendance and PNA calculation does not impact the Protected Earned Income Allowance.
What Happens If I Only Receive a VA Pension Capped at $90 Per Month?
If a person living in a facility only receives a VA pension capped at $90 per month, they should be certified for Medicaid if they meet other program requirements. They should also be referred for SSI, as VA aid and attendance and housebound allowances are not considered income for SSI purposes.
6. VA Compensation and Medicaid Eligibility
Delve into the specifics of VA compensation and how it affects Medicaid eligibility. Understanding these rules is crucial for veterans and their families.
What Is VA Compensation?
VA compensation is unearned income based primarily on service in the armed forces. Payments are made to veterans, dependents, or survivors.
Why Does the VA Make Compensation Payments?
The VA makes compensation payments to a veteran because of a service-related disability. Additionally, the VA makes compensation payments to a spouse, child, or parent of a veteran because of the service-related death of the veteran.
What Should I Do If I Move From a Community Setting to an Institutional Setting?
Entitlements to additional VA benefits may be appropriate due to a change in the situation or increased medical needs. If a person is a veteran or an unmarried widow or widower of a deceased veteran, explore possible entitlement to VA benefits. If the person is potentially eligible but no payment is reported, the person may be required to file for a VA benefit.
How Is VA Compensation Budgeted for Medicaid?
Because VA compensation is not based on need, deduct the $20 general income exclusion in the eligibility determination. Note that this $20 exclusion does not apply to VA pensions or parents’ DIC payments.
How Can I Verify the Type and Amount of VA Benefits Received?
Neither the beneficiary’s award letter nor the VA check indicates whether aid and attendance is included in a person’s total VA payment. To verify the type and amount of benefits received, contact the VA using Form H1240, Request for Information from Bureau of Veterans Affairs and Client’s Authorization.
Are Aid and Attendance and Housebound Allowances Included in the Total VA Benefit?
Do not include aid and attendance allowance, housebound allowance, and VA reimbursement for unusual medical expenses as part of the total VA benefit.
7. Dependency and Indemnity Compensation (DIC)
Understanding DIC is essential for survivors of deceased veterans. Learn about eligibility criteria and how these benefits impact Medicaid.
What Is Dependency and Indemnity Compensation (DIC)?
Dependency and Indemnity Compensation (DIC) is a monthly benefit paid to eligible survivors of certain deceased veterans.
Who Is Eligible for DIC?
DIC is paid to survivors of:
- Military service members who died while on active duty.
- Veterans whose death resulted from a service-related injury or disease.
- Veterans whose death resulted from a non-service-related injury or disease, and who were receiving, or were entitled to receive, VA compensation for a service-connected disability that was rated as totally disabling:
- For at least 10 years immediately before death.
- Since the veteran’s release from active duty and for at least five years immediately preceding death.
- For at least one year before death if the veteran was a former prisoner of war who died after Sept. 30, 1999.
What Are the Eligibility Requirements for a Surviving Spouse?
The surviving spouse is eligible if he/she:
- Validly married the veteran before Jan. 1, 1957.
- Was married to a service member who died on active duty.
- Married the veteran within 15 years of discharge from the period of military service in which the disease or injury that caused the veteran’s death began or was aggravated.
- Was married to the veteran for at least one year.
- Had a child with the veteran.
- Cohabited with the veteran continuously until the veteran’s death or, if separated, was not at fault for the separation.
- Is not currently remarried.
A surviving spouse who remarries on or after Dec. 16, 2003, and on or after attaining age 57 is entitled to continue to receive DIC.
What Are the Eligibility Requirements for a Surviving Child?
A surviving child is eligible if the child is:
- Unmarried.
- Under age 18, or between the ages of 18 and 23 and attending school.
Whenever there is no surviving spouse of a deceased veteran entitled to DIC, the children of the deceased veteran are eligible for DIC.
Can Additional Allowances Be Included in DIC?
Yes, additional allowances could be included in the DIC benefit for aid and attendance or housebound.
How Can I Verify the Type and Amount of DIC Benefits Received?
Neither the beneficiary’s award letter nor the VA check indicates whether aid and attendance is included in a person’s total VA payment. To verify the type and amount of benefits received, contact the VA using Form H1240, Request for Information from Bureau of Veterans Affairs and Client’s Authorization.
Are Aid and Attendance and Housebound Allowances Included in the Total DIC Benefit?
Do not include aid and attendance allowance, housebound allowance, and VA reimbursement for unusual medical expenses as a part of the total VA benefit.
8. Educational Assistance and Medicaid
Explore how VA educational assistance programs are treated regarding Medicaid eligibility. This is essential for veterans and their dependents pursuing education.
How Does the VA Provide Educational Assistance?
The VA provides educational assistance through different programs, including vocational rehabilitation. Medicaid policies on income and resources depend on the nature of the VA program.
What Are the Eligibility Periods for Educational Assistance?
- Veterans generally have up to 10 years after leaving the service to complete their education.
- Veterans enrolled in a vocational rehabilitation program have up to 12 years to complete the program.
- Veterans participating under the Chapter 33 program, “Post-9/11 GI Bill,” have up to 15 years to complete their education.
Who Else Is Eligible for Educational Benefits?
Dependents and survivors of veterans may also be eligible for educational benefits. The VA makes payments under Chapter 35, Survivors and Dependents Educational Assistance Program (a non-contributory program), to:
- Children (between ages 18 and 26) of veterans who died in the service.
- Surviving spouses of veterans who died in the service.
- Children of living veterans who are 100% disabled due to a service-connected injury.
- Spouses of living veterans who are 100% disabled due to a service-connected injury.
Survivors and dependents have 10 years from the date of the veteran’s service-connected death or date of 100% disability to participate in this program.
What Types of Educational Assistance Are Not Considered Income?
Do not consider as income the following:
- Payments made by VA to pay for tuition, books, fees, tutorial services, or any other necessary educational expenses.
- Payments made as part of a VA program of vocational rehabilitation, including any augmentation for dependents.
- Any portion of a VA educational benefit that is a withdrawal of the veteran’s own contribution is conversion of a resource and is not income. However, any portion of the withdrawal that is retained into the month following the month of receipt is a countable resource.
What Types of Educational Assistance Are Considered Income?
Do consider the following as income:
- The portion of the VA educational payment designated as a stipend for shelter.
- Payments made by VA that are used to pay for those things other than necessary educational expenses.
The $20 general income exclusion applies to countable VA educational assistance, and these payments are subject to deeming.
9. VA Aid and Attendance and Housebound Payments
Learn about VA Aid and Attendance and Housebound payments and their treatment under Medicaid. This knowledge is critical for disabled veterans and their families.
What Are VA Aid and Attendance and Housebound Payments?
The VA pays an allowance to veterans and dependents who are in regular need of the aid and attendance of another individual or who are housebound. This allowance is combined with the individual’s pension or compensation payment.
Who Is Eligible for These Allowances?
This special VA allowance can be paid to:
- Disabled veterans.
- Disabled veterans’ spouses.
- Widows.
- Parents.
If an individual is in an institutional setting (for example, a nursing facility) because of mental or physical incapacity, the VA presumes eligibility for aid and attendance.
How Are These Payments Treated for Medicaid Eligibility and Co-Payment?
Based on policy regarding medical expenses paid by a third party, do not consider the following VA payments in the eligibility and co-payment budgets:
- Aid-and-attendance allowances.
- Housebound allowances.
- Reimbursement for unusual medical expenses.
Are There Any Exceptions?
If aid-and-attendance allowances, housebound allowances, and reimbursements for unusual medical expenses are deposited into a Qualifying Income Trust (QIT), the amount deposited is countable for co-payment budgeting. However, these allowances and reimbursements are not countable for co-payment budgeting if separated from the pension or compensation benefit before depositing the VA pension into a QIT.
What Should I Do If I Believe I Am Entitled to an Aid and Attendance Allowance?
If it appears that the individual may be entitled to an aid-and-attendance allowance and is not receiving one, refer the individual to the VA. While living in the community, an individual receives a housebound allowance, but that allowance is adjusted to the aid-and-attendance allowance if the individual moves to an institutional setting. Do not monitor for the individual’s compliance to apply for other benefits when it is to increase the VA payment for medical expenses since aid-and-attendance or housebound benefits are not considered income and will not affect eligibility or co-payment.
How Can I Verify the Type and Amount of Benefits Received?
Neither the beneficiary’s award letter nor the VA check indicates whether aid-and-attendance is included in an individual’s total VA payment. To verify the type and amount of benefits received, contact the VA using Form H1240, Request for Information from Bureau of Veterans Affairs and Client’s Authorization.
How Should These Payments Be Documented?
When the income is not considered for the eligibility and co-payment budgets, enter aid-and-attendance allowance, housebound allowance, and VA reimbursement for unusual medical expenses as a separate income source.
10. Other VA Benefits and Medicaid
Explore additional VA benefits such as clothing allowances and payments for children with spina bifida, and understand their treatment under Medicaid.
What Is the VA Clothing Allowance?
A lump sum clothing allowance is payable in August of each year to a veteran with a service-connected disability for which a prosthetic or orthopedic appliance (including a wheelchair) is used. The allowance is intended to help defray the increased cost of clothing due to wear and tear caused by the use of such appliances.
Is the VA Clothing Allowance Considered Income?
No, a VA clothing allowance is not income.
How Are Payments to Vietnam Veterans’ Children with Spina Bifida Treated?
Do not consider the following types of VA benefits as income or resources for Medicaid purposes:
- VA payments made to or on behalf of certain Vietnam veterans’ natural children, regardless of their age or marital status, for any disability resulting from spina bifida suffered by such children.
- VA payments made to or on behalf of certain Korea service veterans’ natural children, regardless of their age or marital status, for any disability resulting from spina bifida suffered by such children.
- VA payments made to or on behalf of women Vietnam veterans’ natural children, regardless of their age or marital status, for certain birth defects.
Interest and dividends earned on unspent payments are also exempt from income.
Do VA Contracts for Nursing Facility Services Affect Medicaid Eligibility?
No, a VA contract for payment of nursing facility services does not affect Medicaid eligibility. If an application is filed, proceed with the eligibility determination. If the person is certified while the contract is still in effect, the VA contract is reported as a third-party resource on Form H1039, Medical Insurance Input.
FAQ: VA Disability and Medicaid Eligibility
1. Will receiving VA disability affect my Medicaid eligibility?
Whether VA disability affects Medicaid eligibility depends on the type of benefit. Needs-based pensions are generally considered income, while certain allowances like Aid and Attendance are often exempt.
2. What VA benefits are not considered income for Medicaid?
Generally, Aid and Attendance allowances, Housebound allowances, VA reimbursement for unusual medical expenses, and VA clothing allowances are not considered income for Medicaid.
3. How does the $20 general income exclusion apply to VA benefits?
The $20 general income exclusion typically applies to VA compensation but not to needs-based VA pensions or Parent’s Dependency and Indemnity Compensation (DIC) payments.
4. What happens to my VA pension if I enter a nursing home?
VA law may reduce your pension to $90 per month if you are a single veteran with no spouse or child. This reduced amount is considered an Aid and Attendance allowance and is typically not counted as income for Medicaid.
5. Are educational benefits from the VA counted as income for Medicaid?
Payments made for tuition, books, and necessary educational expenses are not considered income. However, stipends for shelter may be counted as income.
6. What if I deposit my VA Aid and Attendance allowance into a Qualified Income Trust (QIT)?
If you deposit these allowances into a QIT, the deposited amount may be considered countable for Medicaid co-payment budgeting.
7. How can I verify what type of VA benefits I am receiving?
Contact the VA using Form H1240, Request for Information from Bureau of Veterans Affairs and Client’s Authorization, to verify the type and amount of benefits you receive.
8. Can payments to children with spina bifida affect Medicaid eligibility?
No, VA payments made to or on behalf of certain Vietnam veterans’ natural children for any disability resulting from spina bifida are not considered income or resources for Medicaid.
9. How does Dependency and Indemnity Compensation (DIC) affect Medicaid?
The $20 general income exclusion does not apply to Parent’s DIC payments.
10. Are VA contracts for nursing home services considered for Medicaid eligibility?
No, VA contracts for payment of nursing facility services do not affect Medicaid eligibility.
Understanding the complexities of VA payments and Medicaid eligibility is crucial for veterans and their families. By staying informed, you can make the best decisions for your financial well-being. At income-partners.net, we understand the importance of strategic partnerships and informed financial planning. We encourage you to explore our website to discover more opportunities to increase your income and build valuable business relationships.
Ready to take control of your financial future and explore lucrative partnership opportunities? Visit income-partners.net today to discover how we can help you navigate the complexities of income and benefits, and connect you with the resources you need to thrive. Don’t wait—your next big opportunity awaits.
