Families caring for aging veterans face a unique challenge: navigating both veterans benefits and Medicaid for long-term care. Each program has its own rules, but using them together can save money and improve care options.

At Rothkoff Law, we’ve helped hundreds of veteran families through this process. With the right plan, families can preserve assets while securing quality care—but small mistakes can cost tens of thousands of dollars. This guide explains key benefits, major differences, and planning strategies to help you make the most of both programs.

Understanding Veterans Benefits for Long-Term Care

Aid & Attendance (A&A) Benefits: What They Are and Who Qualifies

The Aid & Attendance benefit is the most common VA pension for long-term care. It’s a tax-free monthly payment that helps wartime veterans and surviving spouses who need daily assistance.

To qualify, applicants must meet three main requirements:

  • Military Service: At least 90 days of active duty, including one day during a recognized wartime period (WWII, Korean War, Vietnam Era, or Gulf War), with an honorable or general discharge. Combat service isn’t required.
  • Functional Need: Must need help with activities like bathing, dressing, or feeding; be mostly bedridden; live in a nursing home due to disability; or have severely limited vision.
  • Financial Eligibility: In 2025, the net worth limit is $159,240 (assets plus income). Benefits are based on the difference between countable income and the Maximum Annual Pension Rate.

2025 Monthly Rates: Single veteran: $2,358 Married veteran: $2,795 Surviving spouse: $1,515 Two married veterans: $3,740

Practice Insight: Many veterans assume they earn too much to qualify. The VA allows unreimbursed medical expenses—like assisted living or home care—to lower income. Once those costs are documented, many families find they qualify after all.

Other VA Benefits Related to Long-Term Care

  • Housebound Allowance: For veterans confined to their home due to disability but not eligible for A&A.
  • Special Monthly Compensation (SMC): For veterans with service-connected disabilities rated at 100% who also need aid and attendance.

How These Benefits Help Pay for Care: VA pension benefits are paid in cash, giving families flexibility. Funds can cover home health aides, assisted living, nursing home care, adult day programs, or respite services—wherever care is needed.

Medicaid and Long-Term Care

Medicaid’s Role in Covering Long-Term Care

Medicaid is the main payer for long-term care in the U.S. Unlike Medicare, which only covers short-term rehab, Medicaid pays for ongoing care—at home, in assisted living (care portion only), or in nursing homes.

Home and Community-Based Services (HCBS) Waiver programs provide care at home but often have waiting lists. Nursing home Medicaid is an entitlement, meaning anyone who qualifies must be served.

2025 Eligibility Rules

Income Limits: Most states cap income at $2,901 per month for single applicants. When one spouse applies, the other’s income isn’t counted, and part of the applicant’s income can be transferred to the spouse through the Monthly Maintenance Needs Allowance (up to $3,948/month in 2025).

Asset Limits: Typically $2,000 for individuals and $3,000–$4,000 for couples. Some states differ—New York allows $32,396 for individuals, and California has no asset limit until 2026.

Community Spouse Protection: When only one spouse applies, the non-applicant spouse can keep up to $157,920 in assets (the 2025 Community Spouse Resource Allowance).

Exempt Assets: Your primary home (within equity limits), one vehicle, household goods, and wedding rings don’t count toward the limit.

Common Misconceptions: Medicaid isn’t only for the very poor. Many middle-class families qualify with the right planning. Assets can be restructured to meet eligibility while protecting savings for a spouse or heirs. The Aid & Attendance portion of VA pensions is often excluded from Medicaid income calculations, though this varies by state.

Why Coordinating Veterans Benefits with Medicaid Matters

How One Program Affects the Other

VA and Medicaid rules don’t always align. For example, the Aid & Attendance portion of a VA pension usually doesn’t count as Medicaid income, but the Basic Pension does. Single veterans in Medicaid-funded nursing homes see their VA pension reduced to $90/month, while married veterans can divert full benefits to their spouse—providing essential financial support.

Another key difference: The VA has a three-year look-back period for asset transfers, while Medicaid’s is five years. Transfers that meet VA rules can still cause Medicaid penalties. For instance, one family gifted $50,000 to meet VA limits but later faced several months of Medicaid ineligibility—costing $8,000–$10,000 per month in nursing home fees.

Timing: Which to Apply for First

For home care or assisted living, it often makes sense to apply for VA Aid & Attendance first. These benefits can cover care while waiting for Medicaid waiver approval. When full-time nursing care becomes necessary, Medicaid typically offers broader coverage. Some states even require you to apply for VA benefits before Medicaid.

The Cost of Poor Planning

Uncoordinated actions—like gifting assets too soon or applying for Medicaid without preparation—can trigger penalties or delays. Nursing homes can cost over $8,000 a month, so even a short coverage gap can drain savings.

Strategies for Coordinating Benefits

Asset Planning and Protection

Good planning helps families qualify for both programs without losing everything. Common tools include:

  • Medicaid Asset Protection Trusts (MAPTs): Move assets out of countable ownership. Must be created at least five years before applying for Medicaid.
  • Exempt Asset Conversions: Use countable funds to improve the home, pay off debt, or buy exempt assets.
  • Qualified Income Trusts: Direct excess income into a trust to meet income limits.
  • Spousal Resource Planning: Allocate assets to protect the maximum allowed for the community spouse.

Example: We helped a widow with $145,000 in assets qualify for Medicaid by converting funds strategically—paying for funeral plans, home repairs, a car, medical care, and a compliant annuity. She met eligibility while preserving her savings for her family.

Documentation and Timing

Always get a VA benefits breakdown showing Basic Pension vs. Aid & Attendance amounts. This ensures Medicaid excludes the correct portion. If a veteran enters a nursing home under Medicaid, notify the VA to adjust benefits and avoid overpayments.

Why Professional Help Matters

These programs are complex and vary by state. A qualified elder law attorney understands how to align VA and Medicaid benefits without triggering penalties or denials.

Real-World ROI: We worked with a veteran couple with $380,000 in assets. Without planning, they would have lost $220,000 to nursing home costs. With legal guidance, they protected $280,000 through a trust and strategic spend-down—saving over $120,000 after fees.

Common Mistakes to Avoid

  • Assuming One Program Covers Everything: The A&A benefit for a married veteran tops out at $2,795/month—far below the average nursing home cost of $8,000–$12,000. Medicaid covers care but not assisted living room and board, so both programs often need to work together.
  • Waiting Too Long to Plan: Medicaid’s five-year look-back makes early planning critical. 5+ years ahead: Preserve 85–95% of assets 2–5 years ahead: Preserve 50–70% Crisis planning: Preserve 30–50% No planning: Keep only minimal allowances
  • Relying on “Free” or DIY Advice: Filing without professional help can be costly. One family transferred $80,000 after “free” advice to qualify for A&A. Later, that transfer caused a 13-month Medicaid penalty—costing over $117,000 in care. Proper legal planning ($5K–$8K) could have avoided that entirely.

Frequently Asked Questions

Q1: Can I receive both VA Aid & Attendance and Medicaid?

Yes, but you won’t receive the full amount of both. For single veterans in nursing homes, VA pensions drop to $90/month. For married veterans or those at home, full benefits may continue to support the spouse.

Q2: Do VA benefits count as income for Medicaid?

Usually only the Basic Pension portion counts. The Aid & Attendance amount is excluded in most states, but confirm locally.

Q3: Do I need to spend down everything before qualifying?

No. You can keep exempt assets like your home, car, personal items, and prepaid funeral plans. Proper planning can protect more through trusts, annuities, or allowable spend-downs.

Q4: How far ahead should I plan?

Ideally at least five years before care is needed—especially if you’re healthy and in your 60s or early 70s. Even last-minute (“crisis”) planning can help, but the earlier you start, the more you can preserve.

Q5: Why hire an elder law attorney?

Because these rules overlap and change constantly. Elder law attorneys know state-specific regulations, help you avoid penalties, and ensure applications are filed correctly—the difference between losing savings and preserving them.

About Rothkoff Law

Rothkoff Law is a dedicated elder law practice serving veteran families throughout New Jersey and Pennsylvania. Our attorneys are members of the National Academy of Elder Law Attorneys (NAELA) and VA-accredited representatives. We focus exclusively on elder law, Medicaid planning, and veterans benefits coordination, helping families preserve assets while securing quality long-term care.

Ready to Coordinate Your Benefits?

At Rothkoff Law Group, we help veterans and their families navigate the complex intersection of VA benefits and Medicaid. Our experienced elder law attorneys will assess your unique situation, develop a customized strategy that maximizes benefits while protecting assets, and guide you through every step of the application process. Contact Rothkoff Law Group today to schedule your consultation and secure the care and financial security your family deserves.

This article is for informational purposes only and