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How can Aid and Attendance Pension Pay for Assisted Living?

If custodial care is being provided in an assisted living community to a claimant for Pension with Aid and Attendance, the cost of food and lodging as well as the cost of care services can be reimbursed through Pension income.

Residing in Assisted Living

Assisted living is exactly as it says. Living in an apartment or facility where you receive assistance with daily personal needs. Residents remain reasonably independent while receiving assistance as needed with personal care, medications, transportation, housekeeping, meals, and other daily living needs.

Assisted living facilities offer a less expensive and often more desirable arrangement to a nursing home. They are designed for those people who have some care needs, but don't have the physical, medical, or mental impairments that require a nursing home.

Assisted living definitions vary from state to state. Each state has its own licensing requirements and regulations for these types of facilities. Most states do not refer to these facilities as "assisted living." They may call them residential care home, assisted care living facilities, congregate living facilities, personal care homes and a raft of other titles. Each state licensing agency has its own definition of the term it uses to describe assisted living.

Because the term assisted living is not defined in many states, it is often more a marketing term used by a variety of senior living communities to identify a commonly recognized source of assistance. Thus, assisted facilities may be titled differently and offer varying degrees and types of services depending on state law.

The physical structure of assisted living facilities can range from a dwelling that looks like a home in a residential area where the caregiver is the owner and operator, to a large, apartment-style building staffed with many employees. The care style is different in these two examples.

A board-and-care home in a residential area, with three to eight beds provides a homelike environment and closer association with the other residents. Each resident has his or her own room and bathroom. Living room and dining areas are commonly shared with other residents. With little support staff, the resident needs to be mobile enough to get himself around, and other services may be limited.

In contrast, large assisted living facilities may be staffed with numerous health aides, 24-hour nursing care, a help desk, entertainment, and educational programs and provide large private apartments. Arrangements are sometimes made for home health agencies, therapists, or visiting doctors for residents' needs. Transportation, excursions and field trips are also available.

Assisted living facilities or residential home care facilities are licensed to provide custodial care, and in some cases, can provide licensed health care as well. As such, the portion of the monthly fee that pertains to these services is deductible as a medical expense for Pension purposes.

In addition, the payments for meals and lodging, and other facility expenses not directly related to health care or custodial care are medical expenses if the facility provides or contracts for health care or custodial care for the disabled individual. It is not necessary for the disabled individual to be rated for aid and attendance or housebound for this deduction. On the other hand, most individuals who are in assisted living generally have a need for aid and attendance. Also, the benefit in assisted living is much larger when the MAPR also includes an allowance for aid and attendance.

Residing in a Medical Foster Home

Medical foster home means a privately-owned residence, recognized and approved by VA under 38 CFR 17.73, that offers a non-institutional alternative to nursing home care for veterans who are unable to live alone safely due to chronic or terminal illness.

In order to understand what a medical foster home is we need to talk about the concept of adult foster care. Not all states use the term "assisted living" to refer to a living arrangement where food, lodging and assistance with activities of daily living is provided. In some states such as Oregon, "adult foster care" and assisted living are the same thing. In many other states adult foster care is a specialized form of assisted living provided in a homelike environment. In most cases, the care is provided in a home in a residential community that looks like all the other homes in the area. These living arrangements often go by the generic name of "board and care homes."

State licensing generally restricts the number of resident beds for adult foster care to 10 at the most. This particular kind of care is popular in California where most people receiving custodial care are utilizing this living arrangement under a licensing arrangement called "residential care home." There are well over 8,000 of these board and care homes in California that are licensed from 4 to 15 beds. But this living arrangement is also available in most states as an alternative to large multiple bed, residential community, assisted living facilities.

A distinction should be made between adult foster care versus assisted living. Assisted living homes serve many more residents than adult foster care – perhaps 100 beds in assisted living versus 5 beds in an adult foster care home. Another important distinction with adult foster care homes is the care providers typically live in the residence and they are often the owner operators as well. This is not the case with assisted living.

The Department of Veterans Affairs has come up with a concept called "medical foster home" which utilizes adult foster care homes in residential communities but which includes 24 hour availability of health care and custodial care. The VA medical foster home program provides housing and care for more than 1,000 veterans in 42 states and Puerto Rico, serving as an alternative to nursing home care for those who cannot live safely on their own. These Veterans pay their caregivers $1,500 to $3,000 a month, depending on location.

VA accepts only foster homes that meet strict qualifications. For the veterans, it is a chance to live in a home setting with caregivers who treat them like family. The program has slightly more than 700 licensed caregivers who live full time with the veterans and provide round-the-clock supervision and care.

A medical foster home can serve as an alternative to a nursing home. It may be appropriate for veterans who require nursing home care but prefer a non-institutional setting with fewer residents. Medical foster homes have a trained caregiver on duty 24 hours a day, 7 days a week. This caregiver can help the veteran carry out activities of daily living, such as bathing and getting dressed. VA ensures that the caregiver is well trained to provide VA planned care.

While living in a medical foster home, the veteran must be enrolled in VHA Home Based Primary Care Services. VA will cover the cost of the home care services but will not cover the cost of the medical foster home. The veteran must pay for that out-of-pocket. Home Based Primary Care Services are prescribed on a needs basis through a local VA regional medical center. These services are part of the VHA health-care program and are provided at no cost to veterans who are enrolled in the system. There are; however, co-pays associated with using home-based care.

Payments made out-of-pocket by the claimant to a medical foster home, including the cost of meals and lodging, are medical expenses. Thus, the entire cost to a veteran for a medical foster home is deductible from gross income for purposes of Pension entitlement.

Please refer to the table of contents in the top right column of this page for more topics on Pension with Aid and Attendance.