Can I deduct my independent living apartment rent as a medical expense on my application for VA pension? This is a common question we receive and the answer depends on the reason for residing in independent living. Using ordinary rent as a deductible medical expense on an application for VA pension benefits had been an abusive practice of so-called “pension poachers” that led to significant revisions to VA regulations in 2018. However, the VA did provide guidance in its 2018 regulations on when it is appropriate to deduct “rent” as a medical expense on a pension application.
VA pension is a cash benefit available to veterans with a non-service connected disability. The benefit can also be paid to surviving spouses of veterans. To qualify, the applicant must pass both an asset and an income test. To meet the income test, the applicant typically must show that he or she has medical expenses in excess of his or her income. In other words, the VA “deducts” the applicant’s medical expenses from the applicant’s income to determine his or her Income for Veterans Affairs Pension.
Rent alone is not deductible. However, if the applicant is living in the apartment so that a caregiver can provide care, the rent can be a deductible medical expense for VA pension eligibility purposes. A caregiver can be either a professional caregiver or a family member so long as that person is providing custodial care. Custodial care is assistance with the applicant’s activities of daily living (ADLs) – bathing, dressing, mobility, toileting, eating, prosthetic adjustment – or keeping the individual safe because a cognitive impairment. Deducting apartment rent can be particularly useful when a family member is otherwise providing such care in the apartment whether the family member is being paid or not.
Apartment rent should not be confused with a medical expense deduction for payments to an assisted living facility. Such payments count as medical expenses with or without an outside caregiver coming into the facility so long as the individual requires assistance with his or her ADLs or needs to be in a protective environment because of a cognitive impairment.
To determine whether you or a family member qualify for the VA pension benefit, contact the Stinson Law Firm at 317-622-8181 or www.stinsonlawfirm.com.
Jeff is Certified as an Elder Law Attorney (CELA) by the National Elder Law Foundation, a distinction held by only a handful of lawyers in Indiana. For almost 20 years, he has focused on elder law, estate planning, long-term care planning, Medicaid planning, Veterans Affairs benefits planning, special needs planning, guardianships, and estate administration.