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Palmetto State Law Group, LLC

(803)708-7442

Margaret A. Collins, Managing Attorney

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Experienced attorneys proudly serving West Columbia, Columbia, Lexington, Irmo and surrounding areas in South Carolina

Income Test


The household income of the veteran or the surviving spouse cannot exceed the “Maximum Allowable Pension Rate.” In plain English this means monthly income cannot exceed the applicable monthly benefit amount. Unfortunately, often when veterans find this out, they conclude that their income is too high to be eligible for Aid and Attendance.


But the insider secret that most veterans do not know and that the VA often does not tell the veteran or surviving spouse is that they can reduce gross income by any unreimbursed medical expenses when determining whether they meet the income test. This includes in-home care if the applicant cannot be left home alone, or the cost of assisted living if the applicant is residing in an assisted living facility. Other common medical expenses are: Medicare premiums deducted from the veteran’s social security each month, Medicare supplemental insurance premiums, prescription drug insurance and co-pays.


The income test can be expressed as the following formula:


Gross Annual Household Income

Minus Unreimbursed Medical Expenses (Annualized)

Equals Net Income for Veterans Administration Purposes (“IVAP” in VA jargon)


Another insider secret is that payments made by the veteran or surviving spouse under a “personal care contract” can be considered an unreimbursed medical expense and deducted from gross income. A personal care contract is a contract between the veteran or surviving spouse and a family caregiver where the caregiver provides certain services in return for compensation.


Millions of Americans are currently caring for an elderly family member without receiving compensation. Most do not realize that the care they are providing is just as valuable and worthy of payment as care given by a for-hire service. The thought does not even enter their minds because they are providing the care out of love and affection. But the point of entering into the personal care contract is not for the caregiver to make money; the point is to create a “legal expense” where one did not exist before for the purpose of lowering countable income in order to be eligible for the Aid and Attendance benefit. Many of our clients to whom we recommend this strategy do not spend the money paid to them under the personal care contract; they hold it for the family member in case he or she should need it during the rest of his or her life.


How Can We Help?


Margaret Collins is a VA accredited attorney who can review your circumstances and advise you if you meet the eligibility requirements for Aid and Attendance.


If a veteran or a surviving spouse does not currently meet the income or asset test for Aid and Attendance eligibility, we can devise a legal and safe strategy that will result in the eligibility tests being met.


It may be possible to give assets away or transfer assets to a trust. Any such transfers must be done very cautiously, under the supervision of an experienced Elder Law attorney, to make sure future eligibility for Medicaid for nursing home costs is not jeopardized.