VA BENEFITS (MAM)

SR 18-03 Dated 06/18

Previous Policy

____________________________________________________________

Payments made to disabled or retired veterans or their legal dependents by the Department of Veteran Affairs.

Treatment: Unearned Income for the non-MAGI-related medical assistance groups. Excluded income for the MAGI-related medical assistance groups.

Exceptions:

When determining eligibility and allotment amount, exclude VA benefits payable to:

children born with spina bifida (including adult children) of Vietnam veterans; or

individuals with covered birth defects, as defined by the VA, who are natural born children of female veterans who served in Vietnam from February 28, 1961 through May 7, 1975.

 

See also VA Aid and Attendance Allowance, VA $90 Nursing Facility Pension, and Educational Income.

 

The following veterans’ benefits are non-taxable:

Education, training, and subsistence allowances;

Disability compensation and pension payments for disabilities paid to veterans or their families;

Grants for homes designed for wheelchair living;

Grants for motor vehicles for veterans with limited use of their limbs;

Veterans’ insurance proceeds paid to veterans or their beneficiaries;

Interest on insurance dividends left on deposit with the VA;

Benefits under a dependent-care assistance program;

Death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001;

Payments made under the compensated work therapy program; and

Bonus payments by a state or political subdivision due to service in a combat zone.

 

References: 42 CFR 435.603; IRS Publication 17, Your Federal Income Tax (For Individuals) [https://www.irs.gov/pub/irs-pdf/p17.pdf]