Deduct Assisted Living Costs to Increase Aid & Attendance Benefit

Aid & Attendance Overview

The Veterans Affairs’ (VA) Aid and Attendance (A&A) Pension is for low-income veterans and their surviving spouses who are eligible for the Basic Veteran’s Pension. In other words, A&A is an add-on benefit to the Basic Veteran’s Pension. To receive the A&A disability rating / medical rating, and hence the A&A Pension, one must require assistance with completing their daily living activities, such as bathing, grooming, dressing, eating, and toileting.

A&A provides an additional monthly monetary benefit above and beyond the Basic Veteran’s Pension to help cover the cost of needed long-term care. While some Veterans receive in-home care or nursing home care, many opt to receive care in an assisted living residence. Therefore, the focus of this article will be on claiming the cost of assisted living (room, board, and care) as a medical expense for the Aid & Attendance Pension.

To learn more about the level of medical need required to get the Aid and Attendance Pension, click here.

When Can Assisted Living Costs Be Deducted as Medical Expenses?

In order for one to use the cost of assisted living (room, board, and care) as a medical deduction, the individual must reside in an assisted living residence due to a functional need. They must require and receive assistance from the assisted living residence with two or more Activities of Daily Living (ADLs), such as personal hygiene, maintaining continence, eating, dressing, mobility, and dressing.

Alternatively, with a diagnosis of Alzheimer’s disease, Parkinson’s disease, or a related dementia, the A&A rating is generally given and the cost of assisted living deducted even if the veteran or their surviving spouse does not require assistance with their ADLs. This is because they require a protected living environment for their safety and wellbeing, and in this case, the full cost of assisted living can also be used as a deductible medical expense.

Readers should be aware that they may also hear the term “Credit for Unreimbursed Medical Expenses” (UMEs) used in place of “Medical Deduction.”

If a veteran or their surviving spouse does not require personal care assistance and is residing in an assisted living facility for retirement and the recreational/social aspects, the cost of room and board cannot be used as a medical deduction. Said another way, none of the cost of assisted living can be used as a medical deduction in this case.

Why Deduct Your Assisted Living Costs?

In short, deducting the cost of assisted living, in most cases, will increase the monetary amount the veteran receives for their Aid & Attendance pension.

Calculating one’s A&A benefit amount is complicated. In over simplified terms, a veteran or surviving spouse’s gross household income is determined and their Unreimbursed Medical Expenses (for example, the cost of assisted living) are deducted from their income. This determines their “Income for VA Purposes” (IVAP).

The goal is to get the maximum Aid & Attendance benefit amount by deducting eligible medical expenses, such as the cost of assisted living, from a veteran or surviving spouse’s income in order to have an Income for VA Purposes of $0. In most cases, the monthly fees of assisted living accomplish this goal unless the veteran or surviving spouse’s income is very high or the cost of assisted living is very inexpensive.

What about Nursing Homes & Independent Living Communities?

A veteran or surviving spouse can live in a number of settings and be eligible for the Aid & Attendance Pension. In this article, the focus has been on assisted living facilities. However, nursing homes and independent living communities are two other settings that may be used as a medical deduction for the purposes of the A&A Pension.

Nursing Homes
In order for the cost of nursing home care (room, board, and care) to be used as an eligible medical deduction, the veteran or their surviving spouse must reside in a skilled nursing home due to functional need. Please note, if an individual is only there on a temporary basis, the cost of nursing home care is not an eligible medical deduction.

Independent Living Facility
An Independent Living Facility (ILF), sometimes called a retirement community or independent senior living, is a type of senior housing that allows third party health care providers to come in and provide care assistance for the residents. However, if the veteran or their surviving spouse is living in an ILF and is not receiving care from a third party caregiver, the cost of the ILF (room, board, and other amenities) is not an eligible medical deduction. On the other hand, if the resident is receiving care assistance and provides proof via a caregiver invoice or copies of cleared checks for payment of care and the resident’s physician provides a statement that the resident must live in the ILF to contract for third party care, the entire cost of the ILF and the cost of medical care is an eligible medical expense.

Impact of Different Marital Situations

Veteran & Spouse Both Require Care in Assisted Living

In the situation that both a veteran and his or her spouse are residing in an assisted living facility due to functional need and both spouses require assistance with at least two activities of daily living, medical deductions for both spouses are allowed. Since the cost of assisted living for two individuals is significant, this situation can greatly increase a couple’s VA pension.

One Spouse Requires Care & Both Live in Assisted Living

In order for assisted living to be deducted as an eligible medical expense, the resident must require assistance with a minimum of two daily living activities. Therefore, only the assisted living costs (room, board, and care) of the spouse who has a functional need for assisted living is an eligible medical deduction. Put another way, there is no medical deduction for the spouse who does not have a functional need even though they reside in the assisted living community because their spouse lives there.

Spouse in Assisted Living & Spouse at Home

For a married couple, the costs of long-term care, such as assisted living fees, can be deducted from the household income. Therefore, when one spouse requires aid and assistance with their daily living activities and resides in assisted living, their room, board, and care costs can be used as medical deductions even though they do not live in the same residence.

Application & Planning Help

To receive the Aid and Attendance medical rating and use the cost of assisted living as a medical deduction, one must first meet the eligibility requirements of the VA Basic Pension. If one is not currently receiving the Basic Pension, one must apply for it using VA Form 21P-527EZ. For more information on the Basic Pension, the Aid and Attendance Pension, or medical deductions related to the A&A Pension, contact the regional VA office in the area in which you or your loved one resides.

Applying for veteran’s benefits and using medical expenses for the A&A Pension can be confusing. Therefore, it is strongly recommended that one contact a professional VA planner for assistance. To find a Veterans Benefits Advisor in your area, click here.