Little Known Veteran Benefit Provides Tax-Free Pension


The U.S. Department of Veterans Affairs has a little known tax free pension available to help qualified veterans, spouses and their surviving spouses pay for assisted living, home health care or nursing home care. The Non-Service Connected Disability Pension was established in 1952 under Title 38. For veterans or spouses of veterans this pension can be a life line to allow them to age with dignity and peace of mind all the while affording them to receive the care they need and deserve.

A component of this Non-Service Connected Disability Pension is termed "Aid & Attendance". The Aid & Attendance benefit provides for reimbursement of certain qualified, un-reimbursed medical expenses, usually involving long-term care in assisted living communities, in-home care, and in very limited instances independent living communities.

Aid & Attendance Awards

For 2017, the maximum Aid & Attendance increased pension benefit amounts are:

  • Married Veteran: $2,127 per month
  • Single Veteran: $1,794 per month
  • Surviving Spouse (no dependents): $1,153 per month

These amounts are the maximum awards.

A veteran who is currently receiving Service Connected Disability compensation can still receive the Non-Service Connected Disability Pension with Aid & Attendance as long as the Disability Compensation is less than the Aid & Attendance Benefit. If eligible, the VA will grant the difference up to the maximum allowable under Aid & Attendance. However, if the Disability Compensation is greater than what the applicant is entitled to receive under Aid & Attendance then no more money is available.

Aid & Attendance benefits are paid directly to the applicant by the United States Treasury. Title 38 is a mandated law and must be funded by Congress every year. The benefit typically increases annually based on the Cost of Living Adjustment Index.

What Are The Qualifications for Aid & Attendance Pension Benefits?

In order to be considered, the applicant must be 65 or older/or unemployable.There are four criteria for qualifying for the Aid & Attendance benefit. All of these qualifications must be met to receive the Aid & Attendance benefit:

1) Military Service

This benefit is only available to veterans or their surviving spouses who meet the following military service history:

  • An Honorable Discharge from a branch of the U.S. Armed Forces (including Coast Guard, Merchant Marines, WACS, WAVES, WAFS)
  • At least 90 days of active duty military service
  • At least 1 day of the 90 must have been during one of the following periods:
World War I 04/16/1917 - 11/11/1918
World War II 12/07/1941 - 12/31/1946
Korea 06/27/1950 - 01/31/1955
Vietnam* 08/05/1964 - 05/07/1975
Persian Gulf War 08/02/1990 - TBD

* For those veterans who served "in country" in Vietnam, the beginning date for qualifying service is 2/28/1961.

2) Medical Necessity

Medical Necessity means that the applicant has a medical diagnosis that is creating significant deficits in their ability to perform the Activities of Daily Living (ADL's) which include: bathing, dressing, eating, toileting and getting out of bed or chair.

3) Care Cost Compared to Monthly Income

Monthly Income is defined as money that is available to the applicant on a regular monthly basis. If the applicant is married, both incomes must be disclosed. Cost of Care is the cost of qualified monthly medical expenses.

Once the monthly Income and Cost of Care are determined, the Cost of Care should exceed the Monthly Income to receive the maximum benefit.

Many people believe their income is too great to qualify when often that is not the case.

4) Liquid Assets

Liquid assets are defined as financial instruments that can easily be converted to cash. Examples of liquid assets may include accounts such as Checking, Saving, IRA's/401k's, CD's, Mutual Funds, Stocks & Bonds etc.

Homes, real property and some items of personal property are considered Fixed Assets and might not be used in this calculation. Unfortunately, there is no "right" answer when it comes to how much you can have in liquid assets. The VA seems to be getting more conservative in its allowance for liquid assets since the passage of the Deficit Reduction Act.

Traditionally the VA takes into consideration three items when calculating acceptable amounts of liquid assets:

  • The total amount of assets
  • The rate of depletion (how much must be taken out of assets to make up the monthly difference in cost of care)
  • Longevity based on VA actuarial tables

However, many people believe they have too great an asset base to qualify when often that is not the case. If you think you might be eligibile, consult a certified VA benefits counselor.

This article is provided Courtesy of US Senior Vets with permission to use only at US Senior Vets is a national 501(C)3 non-profit organization dedicated to assisting our nations senior veterans and their surviving spouses. US Senior Vets is not a government agency or part of the department of Veterans Affairs (VA).

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my assets arent liquid anymore . my meager savings account drew 6 dollars worth of interest in 2014 . you can now consider me the eccentric old cat with the cash in a mattress only maybe a little more innovative than a mattress .
silly how cold war vets are the only exclusion to the va elegibility requirements . we suffered the same isolation from american society and the forfeiture of our youth and freedom as any group of veterans ever . uncle ivan never got up the courage to charge the fulda gap , that doesnt make us lesser soldiers / vets .
Good luck with that! Since 2008 we have jumped through all the hoops and filled out what seemed like mountains of paperwork. At first the VA decided my husband did not qualify for A&A. In 2011, when his condition deteriorated, we re-applied, but have yet to hear a word, either positive or negative, from the VA. The veterans service officer for our area explained that there might be as much as a year's delay in getting a ruling. In the meantime, my husband has had numerous falls; has been hospitalized several times; has applied for Medicaid coverage and has been accepted; and has been in a skilled nursing facility for more than a year. If you're hoping for help from the VA, be prepared to wait a long, long time. I've given up all hope of receiving any help from them
it took 22 months of waiting but we got ours with 1 year retro.