Expenses Exceed Income - Please help with reporting

Discussion in 'General Discussion' started by Marlene_in_Cali, Jan 11, 2013.

  1. I am assisting a friend with applying for the A&A benefit. He is 86, a WWII veteran, and meets the medical eligibility criteria (he has severe COPD and congestive heart failure and is on hospice care in his own home). He receives Social Security, $1347 per month, and has just qualified for full medicaid benefits which will pay his medicare premiums and other hospice, doctor, and hospital costs. He has no assets other than his home and a small amount of cash in his checking account - less than $2,000.

    All of last year he required the services of an in-home caregiver, a friend of the family who worked about 20 hours per week assisting him with activities of daily living. Recently his condition has worsened and he now requires 24-hour care, so the same caregiver now works as a live-in. Obviously he does not have the means to pay a caregiver himself, since his Social Security is just enough to cover his monthly bills. The caregiver is paid directly by his daughter. The caregiver costs about $4,000 per month, far more than his income.

    My question is, how can we claim an expense for necessary in-home care if that care is currently being paid for by someone else? I saw a related thread here: http://www.veteranaid.org/forums/index.php/topic,2147.0.html Our situation is a little different, and we have not yet filed the application, so I am wanting to present the situation correctly.

    The caregiver is a friend of the family and can be flexible regarding how, when, and by whom she gets paid. She is even willing to be paid with IOUs or promissory notes -- i.e. deferring payment to the caregiver until the A&A benefit is received or the veteran dies, whichever comes first. Would it help if we state that the bill for the caregiver is accruing but the veteran does not have the funds to pay the bill? Or should we simply list the expense without explaining how it is being paid?

    We obviously want to avoid the daughter's contribution being counted as income. She cannot afford to continue paying it for more than about 3 months, and then her own funds will be depleted.

    It seems to me that this situation (of having medical expenses that exceed income, with relatives making up the shortfall) must occur frequently, so I am hoping someone has experience and can guide us on how to explain this to the VA.

    Thank you so much,
  2. stonewick

    stonewick Newbie

    From reading other post in the forums it appears that if you are on Medicaid the maximum amount for A & A for your friend would be $90.00. It seems they will not pay all of your medical and then give you more money too. I think you can get one or the other but not both. I do know that some states will help with in home caregiving cost that is paid to he medicaid receiver and they can pay it to a caregiver. I doubt it would be 4000.00 per month. Medicaid does however, pay for the cost of a nursing home facility if you can find one that accepts medicaid.

    My dear friend is going through this now with her mother who had a stroke and many of the nursing home facilities in our area are stopping accepting medicaid patients. I would try to find a senior or elder care resource center in your area and see what options that might be available in your friend's area.

    Best of luck to you and your friend. They are lucky to have someone who is trying so hard to help them.
  3. Stonewick,

    Thank you very much for your reply. My friend the veteran has just started receiving full Medicaid as of last month; prior to that he had share-of cost Medicaid.

    I believe that he will qualify for some in-home help under the Medicaid-funded IHSS (in-home support services) program. However, this program does not pay for 24-hour care or anything close to it. The maximum under the program works out to about 6 hours per day, and I doubt he will qualify for the maximum because although is disability is severe, he is not bedridden and can feed himself.

    The IHSS/Medicaid benefit is not enough to keep him in his home with the level of care he requires. We were hoping that the A&A benefit would cover what Medicaid does not.

  4. Max

    Max Hero Member

    The $90.00 Medicaid rate is only applicable to individuals receiving Medicaid coverage for nursing home care. Assisted living or other qualified facilities will not affect pension award rates.
  5. stonewick

    stonewick Newbie

    VSR...that is so great to know..thanks for sharing your wisdom.. You are super!!
  6. stonewick

    stonewick Newbie

    and that my friends is why a newbie should not be responding to post. I am so sorry Marlene..This is exciting news as we are facing another Brain surgery and that will be another 6-9K out of our pocket. Our hospital does not give discounts and his neuro surgeon does not accept our insurance.. SO, for me this is very good news..We are be slammed at every corner by on going medical expenses that are not covered.
  7. VSR, I appreciate your guidance.

    Stonewick, I appreciate your kindness in answering to the best of your knowledge -- the rules are very confusing and easy to misunderstand. It was nice of you to reply and I wish you the best with your own situation.

    I would still like to know the answer to my original question - how can we claim a medical expense (caregiver) that is being directly paid by a family member because the veteran does not have the income or assets to pay it himself? It seems like a lot of people here must be in a similar situation, where someone else is directly paying for some of the veteran's expenses.

    Thank you.
  8. suse

    suse Jr. Member

    My understanding is that the vet has to be paying for any caregiver services but relatives can be paying for his or her household expenses. I am new so please wait for additional answers for verification.

  9. Red Headed Mommy

    Red Headed Mommy Jr. Member

    I will throw in my 2 cents, but I would want one of the "experts" on the forum to confirm.

    I think you really need to work "backwards" to determine how to structure things. I tend to think of qualifying for A&A on 4 fronts:
    1. Military service during dates specified.
    2. Medical necessity for the benefit (I.e. in need of attendance by others with you doctor being able to sign the required statement).
    3. Asset test-generally under $80,000 (as forum adequately discusses, this is NOT set in stone and has lots of considerations.). In your friend's case, less than $2,000 is not an issue.
    4. Countable income must be zero or negative to qualify for the full benefit.

    Your friend sounds like they qualify on 1-3, now let's focus on item 4.

    They have the classic Catch 22 with not enough money to pay household expenses and medical expenses. How fortunate your friend is that the daughter and caregiver can help, as well as You!

    I would start with the countable income worksheet on this site. I would then have your friend make sure all income brought in is paid for medical costs, including the caregiver. The caregiver payments should be with checks to document the payments. The caregiver also needs to be claiming this income for tax purposes. If the caregiver costs are greater than the cash available, the daughter or caregiver could set up a loan for the difference. You would need to be sure the loan is well documented by all parties. You could say the loan will be repaid after A&A is received. By doing this, you have brought the countable income to zero to qualify for the benefit.

    Obviously your friend would not have cash to pay for living expenses. Again, his daughter could pay for these expenses and set up a loan for these. She would need to keep a great paper trail of documentation for payments made on your friends behalf. I would set up a written loan for this as well.

    I hope I have answered your question. I believe the key issue to your question is really not having someone else pay expenses, but you must keep your eye on the issue of countable income getting to zero. You can trip yourself up, if you don't keep that as the main focus...because for sure, it is key to the VA :)

    What a great friend to be willing to wade through the A&A process...it is worth it though.

    Good luck!
  10. vetadmin

    vetadmin Administrator Staff Member

    On the money with your reply Red Headed Mommy!

    Thanks for posting.
  11. Red Headed Mommy,

    That was such a clear and detailed reply, and I appreciate your input very much. You have offered some good ideas for avoiding the Catch-22 of not having enough money to pay for expenses, but needing to document that those expenses are being paid in order to bring countable income to zero.

    Vetadmin, thanks for confirming also.


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