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How can Aid and Attendance Pension Pay for Independent Living?

A number of years ago the Department of Veterans Affairs decided Pension with Aid and Attendance could not be used to pay for independent living except under certain restricted circumstances. We discuss these specific rules here.

Many individuals, for various reasons, can no longer live in their homes and must find alternative living arrangements. Perhaps the person living at home no longer desires to maintain a house and yard, or is lonely and desires social interaction, or for various reasons can no longer cook meals, do the laundry or maintain other household tasks. Perhaps this person may also need limited assistance with instrumental activities of daily living but can still manage without the need for custodial care which is assistance with activities of daily living. Perhaps the person lives in a neighborhood that is not safe, or he or she can no longer drive and as a result is prevented from shopping, visiting family or getting to see the doctor.

Independent living facilities offer an opportunity for those persons who can no longer live at home to rent these persons an apartment in a complex that has many residents who have the same needs. Independent living typically provides 3 meals a day, laundry services, cleaning services and limited assistance with getting to the private dining room. There is also opportunity to interact socially with other people as there are all kinds of activity programs provided by these facilities. Transportation is sometimes offered for those who can no longer drive.

Independent living facilities are not licensed to provide custodial care or health care. On the other hand, they are often much less expensive than residing in assisted living where custodial care and oftentimes health care is made available. It is becoming more common for individuals who actually need custodial care to move into independent living because they can receive a limited amount of assistance but they can't afford the higher cost of assisted living.

In many instances, these individuals are disabled to the point where they should be residing in assisted living, but in order to fill up beds, the independent living facility will accommodate them. This creates a dilemma where these people should qualify for Pension but they don't. Before the year 2014, VA reluctantly allowed for expenses in independent living to qualify as medical expense deductions for Pension. All of this changed with VA imposing more strict rules for health care and custodial care expense deductions for independent living after 2014 and again changed the rules in October 2018.

It is important to remember under the new rules for medical deductions for independent living and assisted living the following is true.

  1. Unreimbursed health care expenses are always deductible for Pension and Survivor Pension purposes.
  2. Unreimbursed expenses for custodial care are deductible under certain conditions.
  3. Unreimbursed expenses for food and lodging in independent living and assisted living are only deductible under certain conditions.

Private Home Care Company Services in Independent Living as Deductible Expenses

  • The independent living itself may contract for outside licensed health care providers in which case the resident paying for this can deduct this cost from income for Veterans Pension and Survivors Pension purposes as this is considered medical expenses.
  • The resident in independent living may also contract directly for outside licensed health care providers and the cost is deductible for Pension purposes as this is considered medical expenses.

Care Services Provided by Family or Friends in Independent Living as Deductible Expenses

The disabled resident in independent living may pay family or friends for assistance with ADLs and IADLs – who are not licensed health care providers – and these services are considered deductible medical expenses under the following conditions:

The disabled individual is receiving health care or custodial care in the facility and

  1. The disabled individual is rated for aid and attendance or housebound
  2. A physician, physician assistant, certified nurse practitioner, or clinical nurse specialist states in writing that, due to a physical, mental, developmental, or cognitive disorder, the individual needs to be in a protected environment.

Expenses for Food and Lodging and Other Expenses in Independent Living as Deductible

Payments for meals and lodging, and other facility expenses not directly related to health care or custodial care, are medical expenses if:

  1. The facility provides or contracts for health care or custodial care for the disabled individual;
  2. A physician, physician assistant, certified nurse practitioner, or clinical nurse specialist states in writing that the individual must reside in the facility to separately contract with a third - party provider to receive health care or custodial care or to receive paid or unpaid health care or custodial care from family or friends.
  3. Third Party Care is regularly provided

If ALL of the above criteria are met, VA will deduct the independent living meals and lodging and other ancillary costs AND the third party care costs. If not, VA will only deduct the third party care expenses.

Contact the Senior Veterans Service Alliance to help you file one of these claims. Without the proper experience with one of these claims it is unlikely you will get one approved.

We recommend the disabled individual's physician specifically name the independent living facility and specifically name and prescribe the 3rd party care for the individual's well being. A special statement should be written the physician's letterhead to be included with every claim.

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