Paying Caregivers through the VA Aid and Attendance (Pension) Program

  • What this is: VA Pension and Survivors Pension can include an extra monthly amount called Aid and Attendance or Housebound for those needing help with daily activities. You can use this benefit to pay family members or professional caregivers for in‑home care.
  • Why it matters: It can offset the cost of help with bathing, dressing, meals, medication reminders, and supervision due to dementia or other conditions.
  • What you’ll find here: Eligibility basics, who you can pay, what counts as medical expenses, documentation VA accepts, step‑by‑step setup, tax and Medicaid considerations, and common mistakes to avoid.
A veteran and caregiver reviewing documents at home, representing eligibility check for Veterans Pension and Aid & Attendance or Housebound benefits.

Quick eligibility check

You may qualify for Veterans Pension (for living veterans) or Survivors Pension (for single surviving spouses or certain dependent children) plus an Aid and Attendance or Housebound allowance if:
  • Service: The veteran served on active duty for at least 90 consecutive days with at least one day during a VA-defined wartime period (Gulf War rules differ: generally 24 months of active duty or completion of active-duty requirement). Discharge must be other than dishonorable. Combat service is not required.
  • Care Needs: You need help with two or more Activities of Daily Living (ADLs) such as bathing, dressing, eating, toileting, or you require regular supervision due to physical, mental, developmental, or cognitive impairment. Housebound or Aid and Attendance ratings increase the benefit.
  • Financial: Income and net worth must fall within VA limits. Out‑of‑pocket medical and care costs can reduce countable income. Amounts change annually.

VA periods of war (for Pension purposes)

  • World War II: Dec 7, 1941 – Dec 31, 1946
  • Korean Conflict: Jun 27, 1950 – Jan 31, 1955
  • Vietnam Era: For service in the Republic of Vietnam, Nov 1, 1955 – May 7, 1975; otherwise Aug 5, 1964 – May 7, 1975
  • Gulf War: Aug 2, 1990 – present (end date to be set by law or proclamation)

How the benefit helps pay for in‑home care

  • Deductible medical expenses: Payments for care that assists with ADLs and many Instrumental Activities of Daily Living (IADLs) such as meal prep, housekeeping for the care recipient, and medication management can be counted as medical expenses.
  • Licensed providers: Skilled nursing, therapy, injections, wound care, and home health aide services are deductible if provided by or under the supervision of licensed professionals (e.g., RN, LPN, PT).
  • Non-licensed providers: Custodial care by family, friends, or private aides is deductible if the claimant has an Aid and Attendance or Housebound rating, or if a licensed clinician documents the need for custodial care due to a qualifying condition.
  • At-home care agencies: Both Medicare/Medicaid-certified home health agencies (for skilled/rehab or hospice) and non-medical home care agencies (for custodial care) qualify. Non-medical agencies typically bill hourly and are often paid out-of-pocket; these costs can be deducted.
A family caregiver helping a veteran with daily tasks like meals, medications, and housekeeping, illustrating how VA benefits support in-home care.

What counts as caregiving expenses (typically deductible)

  • Assistance with ADLs: Bathing, dressing, eating, toileting, transferring, continence.
  • IADLs linked to the care recipient’s needs: Meal preparation, grocery shopping, light housekeeping for the care recipient, laundry, medication reminders, transportation to medical appointments, supervision for safety (e.g., dementia).
  • Skilled services: Nursing tasks, therapy, vitals, injections, IV changes, catheter care, wound care/dressings. Note: Services outside the care recipient’s needs or beyond maintaining the immediate environment may not be allowed.

Required documentation for caregiver payments

Keep records and submit when first claiming or when the care provider changes:
  • Proof of payment: Receipt, paid invoice, provider statement/summary, W‑2, ledger, or bank statement
  • Details to include:
    • Amount paid
    • Hourly rate and hours per month
    • Date paid
    • Purpose (type of care/services)
    • Name of person receiving care
    • Provider’s name and contact information
  • Tip: Maintain monthly records in case of VA audit. You generally do not need to resubmit each year unless something changes.

Who you can pay with this benefit

  • Professional caregivers and agencies: Medicare/Medicaid-certified home health agencies (for skilled/hospice) and licensed or unlicensed non-medical home care agencies (varies by state) for custodial care.
  • Family members or friends: Non‑licensed caregivers can be paid for custodial care when the claimant is rated Aid and Attendance or Housebound, or when a licensed clinician certifies the need for custodial care in writing.

Important distinctions

  • Hourly rate and reasonable pricing: Payments should be hourly and reasonable for your area. Avoid flat fees that don’t match hours worked.
  • Household medical expenses count: Deductible expenses can include costs incurred by a spouse or certain dependent family members living in the same household when applying.
  • Ratings matter: Aid and Attendance/Housebound ratings generally increase benefits. If the person generating expenses is not eligible for a rating (e.g., a healthy veteran with an unhealthy spouse), deductions may still apply but the total benefit is often lower.

How to set up caregiver payments (step-by-step)

  1. Confirm eligibility
  • Review service history, care needs, and financials.
  • If needed, schedule a free benefits check with a VA‑accredited specialist.
  1. Get medical evidence
  • Obtain a physician/clinician statement documenting the need for help with ADLs and/or supervision. If using a non‑licensed caregiver, a clinician’s statement is important when no rating is yet in place.
  1. Choose your caregiver
  • Family member/friend, non‑medical home care agency, or home health agency.
  • Verify licensure status when applicable and ensure rates are reasonable for your area.
  1. Draft a written caregiver agreement
  • Specify hourly rate, services provided (linked to ADLs/IADLs), schedule, and start date.
  • Include both parties’ names and addresses.
  • For family caregivers, follow IRS domestic employee rules: withhold/pay taxes and issue a W‑2 unless the caregiver is truly an independent contractor serving multiple clients.
  1. Track hours and payments monthly
  • Use timesheets, invoices, or a simple ledger.
  • Pay by check or bank transfer to create a clear paper trail.
  1. Submit your VA application and medical expense details
  • Include care invoices, proof of payment, clinician statements, and any insurance premiums.
  • Update VA if your care provider changes.
  1. Maintain compliance
  • Keep records for audits.
  • Reassess needs and hours periodically.
  • If a fiduciary is assigned by VA, follow fiduciary instructions; coordinate early if Medicaid planning may be needed to prevent conflicts.

Personal care arrangements with family caregivers

Why many families choose this route:

  • Flexibility: Family can deliver care at home or host the veteran in their home.
  • Financial fit: The caregiver’s pay can help cover household essentials like groceries and utilities, which do not count as the claimant’s income when used for necessities.

Compliance tips:

  • Written agreement with reasonable hourly rate
  • Timesheets and monthly payments
  • Taxes: Family caregivers are usually domestic employees and should receive a W‑2. If the caregiver has multiple clients and operates a care business, a 1099 may apply.
  • Medicaid planning: If you may apply for Medicaid later, ensure the caregiver contract meets your state’s rules. Payments saved into the next month may be treated as assets—plan accordingly with a qualified advisor.

Illustrative examples (simplified)

Note: Figures are examples only; actual VA rates and MAPR thresholds change annually.

  • Couple, veteran needs care: If their combined income is higher, they may need to pay significant monthly care costs to reduce countable income enough to qualify for the full benefit. A personal care arrangement can help align costs and cash flow until VA payments begin.
  • Single veteran: Often a good fit. Paying out-of-pocket for needed care may be substantially offset by the monthly VA benefit.
  • Surviving spouse: Benefits are lower than for veterans. Some survivors may still face a gap between care costs and VA reimbursement; a family caregiver arrangement can make this more affordable.

Common mistakes that trigger audits or denials

  • No written caregiver agreement or unclear hourly rates
  • Paying flat fees that don’t match actual hours worked
  • Missing documentation (purpose of payment, hours, and recipient/provider info)
  • Not paying family caregivers consistently each month (VA can deny retroactively)
  • Ignoring IRS requirements for domestic employees
  • Setting up payment flows that conflict with VA fiduciary rules or future Medicaid eligibility

What to do next

  • Get a free benefits check: Find out in minutes if you likely qualify and how much you could receive.
  • Talk to a VA‑accredited specialist: We’ll review your service history, care needs, and finances.
  • Set up a compliant caregiver agreement: Use our templates and get step‑by‑step guidance.
  • Start documenting today: We’ll show you how to track hours and payments the easy way.

Helpful resources and internal links

  • Eligibility and Service Periods Guide
  • How Aid and Attendance Works with In‑Home Care
  • Family Caregiver Agreement Template (W‑2 guidance)
  • Documentation Checklist for VA Medical Expense Deductions
  • Tax and Medicaid Considerations for Caregiver Payments
  • Contact a VA‑Accredited Representative

External references

  • Official VA Pension page (va.gov)
  • VA Aid and Attendance/Housebound information (va.gov)
  • IRS Household Employers (nanny tax) guidance (irs.gov)
  • Your state Medicaid program rules (state medicaid site)

Frequently Asked Questions

Can I pay my daughter or son to provide my care?
Yes. Family members can be paid as caregivers for custodial care. Use a written agreement, pay a reasonable hourly rate, keep timesheets, and follow IRS household employer rules.
Does the caregiver have to be licensed?
Not for custodial care if you have an Aid and Attendance or Housebound rating, or a clinician documents the need. Licensed providers are required for skilled services.
What documents does VA need to count caregiver payments as medical expenses?
Proof of payment with amount, hourly rate and hours per month, date paid, purpose of services, care recipient name, and provider identity/contact. Receipts, invoices, W‑2s, ledgers, or bank statements are acceptable.
Will my caregiver pay taxes on the money?
Usually yes. Family caregivers are typically domestic employees and should receive a W‑2. Withhold and remit employment taxes as required.
How do caregiver payments affect Medicaid later?
If you may apply for Medicaid, ensure your caregiver contract meets state rules to avoid “transfer for less than value” penalties. Paid amounts saved into the next month may be counted as assets—plan with a knowledgeable advisor.
How much can I get from VA?
VA benefit amounts and MAPR thresholds change each year and depend on marital status, rating (Aid and Attendance or Housebound), income, and deductible medical expenses. Get a free benefits check for current figures.