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Deducting IL Costs

July 10, 2018 9:43 pm
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Manual M21-1 Part V.iii.1.G.2.a (last updated March 4, 2016) refers to 38 CFR 3.272(g) which excludes from countable income any unreimbursed amounts paid by the veteran or spouse for medical expenses of the veteran, spouse, children, and other relatives for whom there is a moral or legal obligation of support, who are members or constructive members of the veteran’s or spouse’s household, and are in excess of 5% of the applicable maximum annual pension rate for the veteran. Manual M21-1 Part V.iii.1.G.3.m provides that unreimbursed fees paid for room and board for pension claimants or relatives receiving custodial care in Independent Living Facilities, or any other facility that is not a nursing home or assisted living facility, may be considered a deductible expense and applies a 6 Step analysis (I include below the entire analysis for your future reference):   1. Is the claimant or relative who is receiving custodial care in the facility eligible to be rated for A&A or housebound?
  • If yes, go to Step 2
  • If no, go to Step 3
  2. Is the claimant or relative rated for pension at the A&A or housebound rate?
  • If yes, go to Step 4
  • If no, go to Step 3.
  3. Has a physician stated in writing that the claimant or relative needs to be in a protected environment? Reference: For more information on a claimant’s or relative’s need to live in a protected environment, see M21-1, Part V, Subpart iii, 1.G.3.k.
  • If yes, go to Step 4.
  • If no, room and board is not a deductible medical expense.
  4. Does the facility provide (or contract for) custodial care to the claimant or relative?
  • If yes, VA will deduct as a UME the cost of room and board and other facility expenses based on custodial care, and all reasonable fees paid to the facility for personal care of the disabled person and maintenance of the disabled person’s immediate environment.  This includes such services as cooking for the disabled person, housecleaning for the disabled person, and other IADLs
  • If no, go to Step 5.
  5. Does the claimant or relative receive custodial care in the facility from a third-party contractor?
  • If yes, go to Step 6.
  • If no, VA will not deduct as a UME the cost of room and board based on custodial care.
  6. Is there a statement of record from a physician that the claimant or relative must reside in a particular facility to receive medical, nursing, or custodial care? Note: The physician’s statement may list up to five appropriate facilities in the community in which the claimant or relative may reside to receive necessary care.
  • If yes, VA will deduct as a UME the cost of room and board and other facility expenses based on custodial care, and all reasonable fees paid to the third-party contractor for personal care of the disabled person and maintenance of the disabled person’s immediate environment.  This includes such services as cooking for the disabled person, housecleaning for the disabled person, and other IADLs.
  • If no, VA will not deduct as a UME the cost of room and board or personal care fees based on custodial care.