E-4300, VA Benefits | Texas Health and Human Services

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Revision 12-1; Effective March 1, 2012

The U.S. Department of Veterans Affairs (VA) has numerous programs that make payments. Treatment of VA payments depends on the nature of the payment. The most common types of VA payments are:

pension;
compensation;
dependency and indemnity compensation;
educational assistance;
aid and attendance allowance;
housebound allowance;
payment adjustment for unusual medical expenses;
clothing allowance;
payments to Vietnam veterans' children with spina bifida.

Note: VA aid and attendance allowance, housebound allowances and payment adjustment for unusual medical expenses are exempt from both eligibility and co-payment. However, if these payments are deposited into a qualifying income trust (QIT) account, they are countable for co-payment.

E-4310 Augmented and Apportioned VA

Revision 09-4; Effective December 1, 2009

The VA determines the designated beneficiary of a check based on the laws and regulations for payment of each benefit.

Augmented VA payment. A VA pension payment that has been increased for dependents is an augmented VA payment. For Medicaid purposes, the augmented benefit includes a designated beneficiary's portion and one or more dependents' portions. An augmented VA benefit usually 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 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.

Apportioned VA payment. A VA compensation payment made directly to the dependent of a living veteran is an apportioned payment. Apportionment is direct payment of the dependent's portion of VA benefits to a dependent spouse or child. The VA decides whether and how much to pay by apportionment on a case-by-case basis. Apportionment 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 VA income to the dependent spouse or child. It is not a support payment from the designated beneficiary.

See D-6350, Veterans Benefits, for requirements to apply for benefits.

E-4311 VA Pensions

Revision 10-1; Effective March 1, 2010

Pension payments are based on a combination of service and a nonservice-connected disability or death.

Needs-Based Pensions and the $20 General Exclusion

Most VA pension payments are based on need. As such, these payments are unearned income to which the $20 general income exclusion does not apply.

Pension payments are usually paid monthly; however, when the monthly payment due is less than $19, VA will pay quarterly, biannually or annually. VA may also make an extra payment if an underpayment is due.

Pensions are paid to:

a wartime veteran determined permanently and totally disabled for nonservice-related reasons;
the surviving spouse; or
the child of a veteran because of the nonservice-related death of the veteran.

There are several periodic payments from VA benefits:

VA compensation
VA pension
VA Dependency and Indemnity Compensation (DIC) payments

Because VA pensions and parents' DIC payments are generally based on need, the $20 general income exclusion in the eligibility determination is not applied.

Exceptions:

The following pensions are not based on need:

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).

These pensions are unearned income and the $20 general exclusion does apply to these exceptions. Assume that a VA pension is needs-based unless there is evidence to the contrary. See G-4110, Twenty-Dollar General Exclusion.

E-4311.1 1979 VA Pension Plan

Revision 10-1; Effective March 1, 2010

The Jan. 1, 1979, increase in VA pension benefits caused many SSI recipients to become ineligible. Public Law 96-272 gave protection to a person drawing VA pension benefits "grandfathered" from Dec. 31, 1978. A person who has 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.

Refer persons who have changed to the 1979 pension plan or who initially obtain entitlement to a VA pension after Jan. 1, 1979, to apply for aid and attendance or other potentially available benefits. However, do not monitor for the person’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 considered exempt income that does not affect eligibility or co-payment.

Determine whether the person is receiving an aid and attendance or housebound allowance as part of his/her VA benefit.

See D-6351, VA Pension or Compensation.

E-4311.2 $90 VA Pension and Institutional Setting

Revision 24-1; Effective March 1, 2024

VA law 38 U.S.C. 5503 says that 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.

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 an aid and attendance allowance in all cases and not income.

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.

There is no association between the reduced pension and the personal needs allowance (PNA). If a veteran has income from other sources, the income from other sources may be considered countable. Calculate the co-payment to determine the amount of the veteran’s liability toward the cost of care.

Do not refer a person living in an institutional setting who receives the $90 VA pension to apply for other benefits when 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.

Allow a PNA for a person with capped $90 VA aid and attendance and other income. Review the examples below:

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 which is $90 plus up to $75.
For a 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.

When a veteran is receiving the $90 capped VA aid and attendance and does not have any other source of income to deduct the $75 PNA from, the person will have $90 for their personal expenses, and the co-payment is zero. If a veteran has a $90 capped VA aid and attendance, and the veteran's other source of income is less than $75, the PNA will be up to, but not exceed, $75. This person will have up to $165 which is $90 plus up to $75. The PNA deduction comes first in the order of all co-payment deductions, including those for incurred medical expenses (IME).

If a person living in a facility only receives a VA pension capped at $90 per month, certify the person for Medicaid, if the person meets other program requirements. Refer the person for SSI. VA aid and attendance and housebound allowances are not considered income for SSI purposes.

Related Policy

VA Pension or Compensation, D-6351

E-4312 VA Compensation

Revision 11-4; Effective December 1, 2011

VA compensation is unearned income and is based primarily on service in the armed forces. Payments are made to veterans, dependents or survivors.

The VA makes compensation payments to a veteran because of a service-related disability. The VA also makes compensation payments to a spouse, child or parent of a veteran because of the service-related death of the veteran.

Note: If a person or a recipient moves 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. See D-6350, Veterans Benefits, for requirements to apply for benefits.

Budgeting Information

Because VA compensation is not based on need, deduct the $20 general income exclusion in the eligibility determination. See G-4110, Twenty-Dollar General Exclusion.

Note: The $20 exclusion does not apply to VA pensions or parents' DIC payments.

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.

Do not include aid and attendance allowance, housebound allowance and VA reimbursement for unusual medical expenses as a part of the total VA benefit. See E-4315, VA Aid and Attendance and Housebound Payments.

E-4313 Dependency and Indemnity Compensation

Revision 11-4; Effective December 1, 2011

Dependency and Indemnity Compensation (DIC) is a monthly benefit paid to eligible survivors of certain deceased veterans:

Military service member who died while on active duty.
Veteran whose death resulted from a service-related injury or disease.
Veteran whose death resulted from a non service-related injury or disease, and who was receiving, or was entitled to receive, VA compensation for 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; or
- for at least one year before death if the veteran was a former prisoner of war who died after Sept. 30, 1999.

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; or
had a child with the veteran; and
- cohabited with the veteran continuously until the veteran's death or, if separated, was not at fault for the separation; and
- is not currently remarried.

Note: 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.

The $20 exclusion does not apply to VA pensions or parents' DIC payments.

A surviving child is eligible if the child is:

unmarried; and
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.

Additional allowances could be included in the DIC benefit for aid and attendance or housebound.

E-4314 Educational Assistance

Revision 09-4; Effective December 1, 2009

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. The veteran’s period of eligibility to receive benefits for educational assistance are as follows:

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.

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; and
spouses of living veterans who are 100% disabled due to a service-connected injury.

Note: 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.

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.

References: The policy in the following items details VA payments that are either not considered as income or exempt as income.

E-1720, Social Services that are Not Income
E-2130, Education and Employment
E-2330, Educational Assistance

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.

Note: The $20 general income exclusion applies to countable VA educational assistance and these payments are subject to deeming. See G-4110, Twenty-Dollar General Exclusion.

E-4315 VA Aid and Attendance and Housebound Payments

Revision 16-4; Effective December 1, 2016

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.

This special VA allowance can be paid to:

disabled veterans;
disabled veterans’ spouses;
widows; or
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.

Based on policy regarding medical expenses paid by a third party, do not consider in the eligibility and co-payment budgets the following VA payments:

aid-and-attendance allowances;
housebound allowances; and
reimbursement for unusual medical expenses.

Reference: E-1720, Social Services That Are Not Income.

Exception: If aid-and-attendance allowances, housebound allowances and reimbursements for unusual medical expenses are deposited into a QIT, the amount deposited is countable for co-payment budgeting. Aid-and-attendance allowances, housebound allowances, and reimbursements for unusual medical expenses are not countable for co-payment budgeting if separated from the pension or compensation benefit before depositing the VA pension into a QIT. Separating and depositing the VA pension amount does not invalidate the QIT.

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.

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.

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. See Appendix XVI, Documentation and Verification Guide.

E-4316 VA Clothing Allowance

Revision 09-4; Effective December 1, 2009

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.

A VA clothing allowance is not income.

Reference: E-1720, Social Services That Are Not Income

E-4317 Payments to Vietnam Veterans' Children with Spina Bifida

Revision 09-4; Effective December 1, 2009

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.

Note: Interest and dividends earned on unspent payments are exempt from income.

Reference: E-2150, Other – Exempt Income

E-4318 VA Contracts

Revision 09-4; Effective December 1, 2009

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.