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My mother receives a VA check for the amount of $90 for her personal needs and expenses. I was informed by the nursing home that the assigned conservator has been taking the check issued for hospital bills.

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The conservator, by that you mean someone became the elders guardian or conservator through a court appointed legal process? So it's not you or other family as DPOA? If so, they have required reports to the court as to where $ went. So I'd bet that the elder has existing debts and conservator has worked out an agreement to repay over time from the elders PNA & it's all what the court deems responsible oversight of finances. G /Cs are done usually in probate court & you should be able to look at the required reporting and any other legal document related to the G /C hearings.  I kinda doubt there's funny stuff happening as the court will find out. 

She is VA & Medicaid? Right? If so she should be getting 2 PNAs. The $ 90 from VA and then whatever her state has as the PNA. Like for my late mom in TX it was $ 60 a mo. So PNA will vary by state. It sounds like 1pna totally paid on debt but I'd bet the other is placed in a trust account at the NH that the conservator or appointed family can draw from for her clothing replacement, toiletries, snacks, outings. PNA realistically doesn't cover all extras. Family will end up spending out of their own wallet for personal things as needed. If they are on a weekly hair-do, they will easily use the entire PNA this way. 

Or the conservator can have moms income (like SS) go into her old checking account and they pay the copay to the NH by check from this account and then do whatever with the left over $ (the PNA) to pay for things needed. The PNA can build each month if not spent. 
I as dpoa handled my moms monthly income this way and had let $ build in her checking account to do a bigger shopping when I came into visit her. 
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