How does the VA calculate countable income and what medical expenses are deductible for Aid & Attendance?
Executive summary
The VA determines Aid & Attendance (A&A) payments by subtracting a claimant’s “countable income” from the Maximum Annual Pension Rate (MAPR), and countable income is gross household income reduced only by specific allowable deductions—most importantly unreimbursed medical expenses (UMEs) above a fixed floor tied to the MAPR (the first 5%) [1] [2]. The universe of deductible medical items is defined in regulation (38 C.F.R. §3.278) and VA guidance, and includes both clinical and many custodial care costs when they meet VA criteria [3] [4].
1. How the VA defines and uses “countable income” to compute A&A
Countable income for pension and A&A purposes begins with household gross income—Social Security, retirement, wages, survivor benefits and most other receipts—and then the VA subtracts only the statutory/regulated deductions allowed for VA purposes to arrive at “income for VA purposes” (IVAP); the monthly A&A payment equals the MAPR for the claimant’s category minus that IVAP, divided by twelve [2] [1] [5]. The VA emphasizes that net worth (assets plus annual income) and MAPR ceilings are independent gatekeepers for eligibility: even with deductions, claimants must meet the MAPR/net worth thresholds Congress and VA set each year [2] [5].
2. The 5% MAPR floor for unreimbursed medical expenses—what it means in practice
A critical threshold is that only UMEs exceeding 5% of the applicable MAPR are deductible; the VA subtracts that 5% “floor” from total UMEs and only the remainder reduces countable income [1] [6]. Practically, this means a single veteran with a 2026 MAPR of $17,441 faces a 5% floor of $872; if annual UMEs are $1,028, only $156 reduces countable income ($1,028 − $872 = $156) [6] [1]. Multiple sources reiterate the same operational rule and use similar examples for surviving spouses and other MAPR tiers [7] [8].
3. What qualifies as a deductible medical expense under VA rules
The VA’s regulatory list (38 C.F.R. §3.278) and VA adjudicative guidance identify deductible items broadly: medically necessary services, durable medical equipment, prescription drugs, health insurance premiums, home health services and custodial care when the attendant provides health or custodial care, transportation for medical purposes (mileage, parking, tolls), and many other out‑of‑pocket health costs [3] [4]. VA guidance and practitioner summaries emphasize that costs must be unreimbursed and documented, and that third‑party payments for someone else’s medical care generally prevent that same expense from being claimed as a deduction [9] [4].
4. Edge cases, documentation and VA interpretation issues to watch
The VA applies detailed procedural rules when verifying and applying medical deductions—examples and computations appear in the VA’s adjudication manuals and reference guides, which show how to document paid expenses and how to treat items like funeral or burial expenses, mileage, and attendant pay [10] [4]. Claimants should note that certain exclusions and special rules (e.g., treatment of spouse income, treatment of payments by government entities for in‑home care) can materially change IVAP, and professional representatives routinely caution that careful documentation and proper categorization matter when preparing claims [9] [5].
5. Competing interpretations and practical advice about maximizing benefits
Private advisory sites and law firms echo the legal text but also offer tactical guidance—tracking recurring monthly out‑of‑pocket costs, documenting attendant hours, and using the higher A&A MAPR tier where eligible—to maximize deductible UMEs and therefore the pension payment, but these sites also warn that the rules are precise and applicants should verify computations with accredited VA representatives or attorneys [5] [11] [12]. The reporting and practice resources converge on one clear point: only legally allowed UMEs above the 5% MAPR floor reduce countable income—claims that suggest broad or creative deductions outside 38 C.F.R. §3.278 are inconsistent with official VA rules [3] [4].