Mother receives VA aid and attendance and lives in an ALF. I have been told if she moves in with a family member she could lose her funds.

My mother is home & gets Aid & Attendance ...I spend it on private paying home health aides ..a couple of times used it to pay her medical & dental premiums. Should be no problem if you do the same.
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Thank you. She would definitely be using it on health care as I still work a full time job and she would require someone during the day to assist with meds etc... I have a call in to a VA Referral she was given here at her ALF plus we used an attorney to finally receive her benefits after my dad passed so I thought I might call them as well. I really appreciate your answer.

It depends.  My mom gets VA A & A and lives with me, we have told that to VA rep, no problem.  But we spend the VA money on a home health care aid.   I think if you do not spend on medical care or home aids, it could be a problem