VA Aid and Attendance Benefits and Personal Care Contracts

(The following is part of a discussion, taken from a listserv, or electronic bulletin board, concerning benefits available for veterans, their dependents and survivors from the Department of Veterans Affairs.)

Question: I have a client who has applied for Aid and Attendance Benefits (A&A) from the Department of Veterans Affairs (VA). The client is moving back to her home from a nursing facility and will be cared for by her daughter.  The daughter is giving up a full time job to care for her mother.  Assuming that the parties sign a properly drafted personal care contract, can daughter be paid by the mother for services rendered, and will the payments count as an unreimbursed, recurring medical expense for mom, allowing her to receive a higher VA A&A check?

Answer: As long as mom meets the VA standard and is “rated” by the VA as being in need of aid and attendance, then, yes, the payment to daughter as caregiver is a deductible expense for VA purposes.  However, if mom is only rated as “housebound” then the expense is not deductible unless daughter is a medical provider or under direct supervision of a medical provider.