What are the US income tax issues related to COPES residential assistance?

My uncle is in an Adult Family Home with COPES residential assistance from the State of Washington. My uncle has a pension of $2000 per month. He is required to pay $1866 per month of his pension to the Adult Family Home for his care. The State of Washington supplements that with another $500 per month. Two questions: 1) For US Federal income tax purposes, what is my uncles income? Is it $2000 per month from his pension? Or is it $2000 per month from his pension plus $500 more from the State of Washington? Or is it $2000 - 1866 or $134 per month because the portion of his pension now being directed by COPES no longer qualifies as income for federal tax purposes? 2) What US Federal Income tax form describes how this COPES situation is supposed to be handled?