Any other suggestions for way to withdraw money for my MIL's account?

We had a similar situation with my mom. Once she was accepted for Medicaid, she was no longer needing the A&A pension. We were told that any money deposited to her account by the VA after she was started on Medicaid would have to be returned to the VA. We were told by another person at the VA to go ahead and spend the money - advice that was incorrect and would've really created problems later. We opted to leave the money in the account for probable future repayment.

This turned out to be correct. Nearly 12 months later, the VA finally got the paperwork processed and sent a bill for all of the money they had overpaid her (minus the $90 per month.) Yes, the bill was for over $12K. Fortunately, we hadn't spent any of it. All payments deposited starting the month after Mom started on Medicaid were considered overpayments.

Keep after the VA to process her paperwork, using certified mail. Also, there is a form you can send to them, requesting that the payments be dropped to $90 per month while they're processing.

As for being over the Medicaid limits - the first year I had to recert Mom's Medicaid, I was able to speak to the local caseworker and explain that this was not to be considered an asset, as the money would cease to be put in her account. I explained that we were in process of having this settled, and that once it was, the money would be sent back to the VA. It was a hassle, but worked out.

As for stressing about this account growing, I really get your wife's stress. But when she does the annual recert for Medicaid, they will request bank statements and question the withdrawals. Hopefully, this will be sorted out before the next recert is due and she'll be able to show documentation that the money went back to the VA. If the recert comes before it's sorted out (as I experienced), she once again explains that this is in process with the VA and is not considered an asset. I found some verbiage in our state's Medicaid info about A&A not being an asset.

You will have to repay that money to the VA by check. Do not start spending it or it will have to come out of your own pocket.

One thing I forgot to write - for my mom, the $90 is factored in as a pension, along with her SS and Dad's pension, when Medicaid calculates what is paid to the NH. Mom still only gets the $69 personal needs allowance that our state allows. That takes care of her haircuts and misc NH expenses - we pick up things like clothing, toiletries etc.

When your mom does the annual recertification for Medicaid, the state - if its anything like my moms TX recertification process - will want that months and 3 months prior bank statements. Btw recertification will also want items -like funeral policy, house info, etc- submitted initially for the Medicaid application again(!), so keep these in a binder at the ready. I did not know about the recert & boxed all application stuff up.....

So the bank statements will show this huge amount of $$$$ due to VA a&a. You kinda need to have something in document form to submit to Medicaid to show that you as the DPOA are aware of the overage & have attempted to get it corrected. Do not take any funds out except for the $ 90 VA allowance. I'd suggest you do a short letter to VA with all moms info and send it certified mail with the return registered receipt (the green post card) from USPO. It will run about $ 8.00. Personally I'd do this every 90 days just to clearly show your fiduciary duty to get this clusterF corrected. You put your own address on the RRR for the mail back address.

Then when you do the recert you send in a xerox of the letter to VA with the certified mail uspo receipt (which post offce date time stamps) & the sign off by the VA from the rrr green card. Totally covers yourself legally for a mere $ 8.00 a pop. This way the recertification review will not be quite so problematic.

VA will want the $$$ back. Leave it there & don't spend more than the $ 90 each month.

Is this money from the Aid and Attendance pension?

I believe so. She was eligible for this money once her bank accout fell below a certain level. VA says she should only get $90.00 a month now that medicaid is paying for nursing home and they are processing this but the $1100.00 a month checks keep coming.

Thank you very much for information

I'd recommend not spending any of the VA money, including the $90 VA pension. In my mom's case, Medicaid's monthly payment were $90 short because they factored this in. So every month, her balance at the nursing home increased by $90, since they were "shorted" on the Medicaid payment. Once it was all settled, there was a balance due at NH of $90x12 months.