Unreimbursed Medical Expenses and VA Pension Eligibility

Unreimbursed medical expenses are the reason many families qualify for VA Pension even when, on paper, their income looks too high. VA Pension is needs-based: the VA pays the gap between your income for VA purposes and an income ceiling set by Congress, so anything that legitimately lowers that income can move you from "denied" to "eligible."1 Medical and care costs you pay out of pocket and aren't reimbursed for, from Medicare premiums to assisted living fees, can be deducted from that income when they meet VA's rules.1

This guide explains how the deduction works, the 5%-of-MAPR threshold that determines how much actually counts, which costs qualify, and how to report them on your application.

In This Guide

• Key Takeaways
• Why Unreimbursed Medical Expenses Matter for VA Pension
• The 5-Percent MAPR Threshold
• What Counts as a Deductible Medical Expense
• An Example of How UMEs Help
• How to Report Unreimbursed Medical Expenses for VA Pension
• Frequently Asked Questions
• Learn More

Why Unreimbursed Medical Expenses Matter for VA Pension

VA Pension, including its Aid and Attendance and Housebound increases, is a needs-based benefit. The VA does not pay a flat amount. Instead, it pays the difference between your countable income for VA purposes and the applicable Maximum Annual Pension Rate (MAPR) that Congress sets.1 If your countable income is already at or above your MAPR, there is no gap for the VA to fill, and you do not qualify.1

Because the benefit is keyed to countable income, reducing that income directly affects both whether you qualify and how much you receive. The VA lets you subtract unreimbursed medical expenses (UMEs) from your countable income.1 For an older veteran paying for assisted living, in-home aides, or nursing home care, those costs are often large and recurring, large enough to pull countable income well below the MAPR. That is why a veteran whose income looks too high at first glance can still qualify once real care costs are accounted for.1

The 5% MAPR Threshold

There is one rule that trips up most families: not every dollar of medical expense reduces your countable income. Under 38 CFR 3.272, only the portion of your UMEs that exceeds 5% of your applicable MAPR is deductible.1 The first slice of your medical costs, up to that 5% floor, does not count. Everything above it does.

The floor depends on your MAPR category, which sets the basic rates below. For 2026:1

So a single veteran with no dependents must have more than about $872 in qualifying unreimbursed medical expenses for the year before any of it reduces countable income, and only the amount over that floor is deducted.1 For a veteran with one dependent, the floor is about $1,141.1 The floor rises with dependents, but it never rises with the Aid and Attendance or Housebound increase: 38 CFR 3.272 sets it at 5% of the MAPR "including increased pension for family members but excluding increased pension because of need for aid and attendance or being housebound."1

What Counts as a Deductible Medical Expense

The VA defines deductible medical expenses at 38 CFR 3.278. The categories that matter most for senior care include:1

• Nursing home care. Payments to nursing homes, hospitals, medical foster homes, and inpatient treatment centers, including meals and lodging charged by the facility, are deductible.1
• Health insurance premiums. This includes Medicare Parts A, B, and D premiums and long-term care insurance premiums.1
• In-home attendant care. Payments for help with daily activities count when the attendant provides health care or custodial care, and the payments must match the hours the attendant actually works. The attendant has to be a health care provider unless the person needs Aid and Attendance or is housebound, or a physician, physician assistant, certified nurse practitioner, or clinical nurse specialist states in writing that, due to a physical, mental, developmental, or cognitive disorder, the person requires the care the attendant provides.1
• Assisted living and other care facilities. Fees paid to a care facility other than a nursing home can count, under that setting's own rules, explained below.1
• Other medically necessary costs. VA generally treats payments for items or services that are medically necessary, that improve a disabled person's functioning, or that prevent, slow, or ease functional decline as medical expenses.1

Assisted living has its own test, and it is not the in-home test. Care from a health care provider in the facility counts. Help with daily activities from someone who isn't a health care provider counts if the resident is receiving health or custodial care there and either needs Aid and Attendance or is housebound, or a physician, physician assistant, certified nurse practitioner, or clinical nurse specialist states in writing that, due to a physical, mental, developmental, or cognitive disorder, the resident needs to be in a protected environment.1 Meals and lodging count only if the facility provides or contracts for the resident's health or custodial care, or one of those clinicians states in writing that the resident must live in the facility (or a similar one) to get care from a third-party provider or from family or friends.1 The facility itself must be licensed if facilities of its type need a license in that state, and a residential facility must be staffed with care providers 24 hours a day.1

Adult day care is another recurring cost families ask about here. The VA also runs its own Adult Day Health Care program, so it is worth reading whether the VA pays for adult day care before you assume the whole bill is yours to arrange and pay privately.

An Example of How UMEs Help

Consider a single wartime veteran, age 78, with no dependents. Her income for VA purposes is $24,000 a year, which is above the 2026 basic MAPR of $17,441 for a veteran with no dependents.1 On income alone, she appears over the ceiling and would not qualify.

She now lives in an assisted living community that provides her custodial care, she qualifies for Aid and Attendance, and she pays the community $36,000 a year for her care, meals, and lodging, so the whole fee meets the facility rules above.1 Only the portion of that expense above her 5% floor of about $872 is deductible, leaving roughly $35,128 in deductible UMEs.1 Subtracting that from her $24,000 of income drops her countable income to zero.1 With countable income now below the MAPR, the VA pays the difference, and because she qualifies for Aid and Attendance, her applicable MAPR is $29,093 a year, the most VA can pay her.1

The numbers are illustrative, but the mechanism is exactly how the deduction works: large, recurring care costs can erase countable income and open the door to a benefit that looked out of reach.1

How to Report Unreimbursed Medical Expenses for VA Pension

VA has a form for this: VA Form 21P-8416 (Medical Expense Report), for medical or dental expenses you paid for yourself or a family member in your household that you weren't reimbursed for and don't expect to be. A wartime veteran who isn't already getting pension also files the pension claim itself on VA Form 21P-527EZ (Application for Veterans Pension).2 List ongoing costs such as assisted living or nursing home fees, in-home care, and insurance premiums so the VA can deduct them from your countable income when it calculates your benefit.1

Keep documentation. Provider statements, any clinician's written statement the in-home or facility rules call for, facility invoices, and premium records all support the expenses you claim.1 VA counts expenses that were or will be paid during the 12-month period it is annualizing, so accurate figures for recurring costs help the VA set your benefit correctly from the start.1

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The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.