Introduction

Using the recently released 2026 cost-of-living adjustment (COLA) as a guide, the American Council on Aging has announced their projections for the Veterans Affairs (VA) Maximum Annual Pension Rates that will be effective from Dec. 1, 2025 – Nov. 30, 2026. These pensions rate changes can have a significant impact on senior veterans or their single surviving spouses who require long-term care at home, in assisted living or in a nursing home, especially if they are deciding between using a VA Pension, Medicaid, or both to pay for that care. The official VA Pension figures will be released in mid-to-late October, but there is expected to be a 2.7% increase from last year. For example, a married veteran with no dependent children who qualified for the maximum Aid & Attendance pension was receiving $2,795/month, but that will adjust to $2,871/month as of Dec. 1, 2025.

VA Pension Projections for 2026

VA Pensions are a tax-free monetary benefit for veterans, or their single surviving spouse, who are financially limited. There are three levels of VA Pensions – Basic, Aid & Attendance (A&A) and Housebound. The A&A and Housebound pensions are for veterans (or their surviving spouses) who require long-term care. Below are the American Council on Aging’s estimates for the Maximum Annual Pension Rate (MAPR) for all three levels of VA Pensions.

Basic Pension

• Veteran with no spouse or dependent child – $17,424/year ($1,452/month)
• Veteran with a spouse or dependent child – $22,816/year ($1,901/month)
• Two Veterans married to each other – $22,816/year ($1,901/month)
• Surviving spouse with no dependent child – $11,688/year ($974/month)
• Surviving spouse with a dependent child – $15,296/year ($1,274H2 /month)

Aid & Attendance

The Aid & Attendance (A&A) Pension is actually an add-on to the Basic Pension for veterans (or their surviving spouse) who meet the A&A functional requirements. The amounts below are the total of the A&A portion plus the Basic.

• Veteran with no spouse or dependent child – $29,065/year ($2,422/month)
• Veteran with a spouse or dependent child – $34,454/year ($2,871/month)
• Two Veterans married to each other (one qualifies for A&A) – $34,454/year ($2,871/month)
• Two Veterans married to each other (one qualifies for A&A, the other for Housebound) – $38,313/year ($3,192/month)
• Two Veterans married to each other (both qualify for A&A) – $46,098/year ($3,841/month)
• Surviving spouse with no dependent child – $18,679/year ($1,556/month)
• Surviving spouse with a dependent child – $22,282/year ($1,856/month)

Housebound

Like the A&A Pension, the Housebound Pension is an add-on to the Basic Pension for veterans (or their surviving spouse) who meet the Housebound functional requirements. The amounts below are the total of the Housebound portion plus the Basic.

• Veteran with no spouse or dependent child – $21,292/year ($1,774/month)
• Veteran with a spouse or a dependent child – $26,684/year ($2,223/month)
• Two Veterans married to each other (one qualifies for Housebound) – $26,684/year ($2,223/month)
• Two Veterans married to each other (one qualifies for A&A, the other for Housebound) – $38,313/year ($3,192 / month)
• Two Veterans married to each other (both qualify for Housebound) – $30,551/year ($2,545/month)
• Surviving spouse with no dependent child – $14,284/year ($1,190/month)
• Surviving spouse with a dependent child – $17,885/year ($1,490/month)

Medicaid, VA Pensions, or Both?

Some veterans (or their surviving single spouse) who need long-term care may be eligible for both a VA Pension and Medicaid. While enrolling in both programs is allowed, sometimes it’s not an option. That’s because most states count the Basic portion of a VA Pension toward Medicaid’s income limit. So, if the monthly VA Pension payments are high enough, they could make a veteran or their surviving spouse ineligible for Medicaid by pushing them over their income limit, which is $2,901/month for an individual in most states for most Medicaid programs in 2025. Plus, benefits can be limited for seniors who have both Medicaid and a VA Pension – a single Nursing Home Medicaid beneficiary with no dependent children would have their VA Pension cut to $90/month, for example.

Since rules change by state, and every individual has different care needs and financial circumstances, each case is different when it comes to deciding between Medicaid, VA Pensions or both. If the situation is complicated, consulting with our team of professionals at Eldercare Resource Planning may be prudent. However, there are some general rules of thumb to follow when it comes to which program is best for which type of care if a choice must be made: Medicaid is usually optimal for nursing home care and VA Pensions are best for in-home care. Care in assisted living, on the other hand, is still best decided on a case-by-case basis.

For Nursing Home Care

The cost of nursing home care, an average of $111,325 per year for a semi-private room in the U.S. in 2024, according to Genworth’s 2024 Cost of Care Survey, makes Medicaid the clear choice for nursing home coverage. Medicaid will cover all the essential costs for qualified applicants, including room and board. By comparison, even the highest VA Pension – $46,098 for two veterans married to each other who both qualify for A&A – won’t cover half the cost of an average nursing home.

Veterans can also receive nursing home care at certain State Veterans Homes. Most of these facilities do provide a nursing home level of care, including some with memory care for veterans with Alzheimer’s disease and other dementias, but there are some homes that provide a lesser level of care, more like assisted living. The eligibility criteria and costs for Veterans Homes are established by the state, although most of these homes will accept payments from the VA to help lessen the cost for individuals.

For In-Home Care

The flexibility of a VA Pension often makes it the best choice for veterans or their surviving spouses to use to pay for long-term care at home. VA Pension benefits come as cash and can be spent on whatever medical services, supports and equipment best fit the situation. Medicaid’s in-home care, on the other hand, only provides certain services and supports. Plus, if an individual’s care needs change after they have enrolled in Medicaid, adjusting their care plan can be a challenge. Their new needs may not even be covered by their state’s Medicaid programs, and even if the new needs are covered, the beneficiary will have to re-apply in some form to change their plan.

Medicaid covers in-home care through either Home and Community Based Services (HCBS) Waivers, or its regular state Medicaid. Some HCBS Waivers have waitlists, so qualified applicants are not guaranteed to receive coverage right away, another aspect of Medicaid’s inflexibility. There is no waitlist for basic healthcare coverage via state Medicaid, also known as Aged, Blind and Disabled (ABD) Medicaid, but individuals who want to receive long-term care via ABD Medicaid have to apply for those benefits one at a time, which can be a tedious process.

For Assisted Living

There is no clear-cut choice between Medicaid and a VA Pension when it comes to paying for care in assisted living. It truly depends on the circumstances because there are so many variables with costs and coverages.

Most states offer Medicaid coverage in assisted living through an HCBS Waivers or ABD Medicaid, but not all states offer it, which is one major variable. The long-term care services and supports Medicaid covers in assisted living can vary greatly depending on the Waiver, the state and the individual. Medicaid will not cover assisted living room and board costs in any state, but some states do cap those costs for Medicaid beneficiaries. Some states also offer offer Optional State Supplementation (OSS), which Medicaid beneficiaries can use to help pay for assisted living expenses. And some states allow family members to help pay assisted living bills without counting it toward the Medicaid beneficiary’s income limit, which is known as “family supplementation.”

A VA Pension can be used to pay for long-term care services and supports in assisted living, as well as room and board. So, if the room and board is the biggest assisted living cost, using a VA Pension might be the best choice for a veteran or their surviving spouse. If the long-term care services are more expensive, Medicaid could be the best option. Enrolling in both programs might be ideal, but it may not be possible depending on the veteran’s Medicaid income limit and their other sources of income. The individual veteran or their spouse will have to factor in all their individual variables – care needs, assisted living costs, coverage options, income, income limit – to make the best decision for them. This can be a complicated calculation, so using a Certified Medicaid Planner or a VA Pension advisor is recommended.

Eligibility Criteria

Both Medicaid and VA Pensions require that all applicants meet certain financial requirements. Medicaid long-term care applicants also have to meet a medical requirement, as do applicants for the A&A or Housebound Pensions. And all VA Pension applicants must meet a military service requirement.

Financial Criteria

Medicaid
The individual asset limit for Nursing Home Medicaid, HCBS Waivers and ABD Medicaid in most states in 2025 is $2,000, and the asset limit is $3,000 for married applicants with both spouses applying. For married Nursing Home Medicaid and HCBS Waivers applicants with only one spouse applying, the asset limit for the applicant is $2,000 in most states in 2025, but the asset limit for the non-applicant spouse is $157,920, thanks to the Community Spouse Resource Allowance (CSRA). The CSRA does not apply to ABD Medicaid, so the assets and income of both spouses are counted for married ABD Medicaid applicants whether one or both spouses are applying.

The individual income limit for Nursing Home Medicaid and HCBS Waivers is $2,901/month in most states in 2025. The individual income limit for ABD Medicaid in 2025 ranges from $967/month to $1,795/month, depending on the state. Most income is counted toward this limit, including the Basic VA Pension in most states. However, the A&A Pension is exempt in most states, and the Housebound Pension is exempt in some. So, a veteran who receives the A&A Pension will have to count the Basic portion of their pension toward their Medicaid income limit, but the A&A portion would be exempt.

VA Pension
To qualify for a VA Pension, veterans or their surviving spouses must meet a net worth limit of $159,240 (effective Dec. 1, 2024 – Nov. 30, 2025). Net worth in this case is the total of countable assets plus annual income, and for married veterans this will include the assets and income of their spouse, as well.

VA Pension applicants must also meet an income limit, which is fairly straightforward: Their income cannot be greater than the VA Pension they are applying for.

Home Exemption Rules

An applicant’s primary home can be exempt from Medicaid’s asset limit if the applicant will continue to live there (or files an intent to return form) and they meet the home equity interest limit, which is $730,000 in most states in 2025, although it is $1,097,000 in states with higher property values, and $750,000 in Idaho and Wisconsin. Home equity interest is the portion of the home’s value owned by the applicant minus any outstanding debt, like a mortgage. The home can also be exempt if the Medicaid applicant’s spouse, minor child or disabled child of any age lives there.

The rules are simpler and more lenient when it comes to homes being exempt from the VA Pension net worth limit. The home is exempt if it sits on 2 acres of land or less, regardless of its value and where the veteran or their spouse resides.

Look-Back Period

Neither Medicaid or VA Pension applicants are allowed to give away their assets to meet their asset limit. To make sure they don’t, both programs use a Look-Back Period, which is 60 months in most states for Medicaid (California and New York are the exceptions). This means the state will look back into a Medicaid applicant’s financial history for the five years prior to their application date to make sure they have not given away any assets or sold them at less than fair market value. If they have violated the Look-Back Period, their application will be denied and they will be penalized with a period of ineligibility that could last months or years.

The VA Pension Look-Back Period is not so severe. It’s only 36 months long as opposed to 60. Plus, veterans are allowed to sell assets at less than fair market value, as long as the value of the asset would not have caused the veteran to exceed their net worth limit.

Functional Criteria

The functional, or medical, eligibility requirement for Nursing Home Medicaid and most HCBS Waivers programs is needing a Nursing Facility Level of Care (NFLOC). To receive long-term care via ABD Medicaid, applicants must show a specific need for that care, so they qualify for long-term benefits one at a time.

To qualify for a Basic Pension, an applicant must meet one of the following functional criteria:
• Be 65 years old or older
• Have a permanent and total non-service connected disability, which means there is no change, or very little chance, the disability will improve, and there is a 100% disability rating
• Requires long-term care and lives in a nursing home due to a disability
• Receives Social Security Disability Insurance or Supplemental Security Income

To qualify for an Aid & Attendance Pension, an applicant must meet one of the following functional criteria:
• Require assistance with Activities of Daily Living (mobility, bathing, dressing, eating, toileting)
• Be confined to one’s bed for the majority of the day
• Reside in a nursing home due to a loss of physical or mental abilities because of a disability
• Have profound visual impairment (the visual field has concentric contraction equal to 5 degrees or less OR both eyes have equal or less than 5/200 visual acuity)

To qualify for a Housebound Pension, the applicant must be “substantially confined” to their home because of a permanent disability.

Military Service Requirements

To qualify for a VA Pension, applicants must also have received an honorable discharge from their service. They must have served at least 24 months of active duty, or an entire tour of duty, if they served after Sept. 7, 1980, or 90 days if they served before that date, with a minimum of 1 day served during a time of war no matter when they served. War time periods include:
• May 9, 1916 through April 5, 1917 – Mexican Border Period (Veterans who served in Mexico, the borders of Mexico, or adjacent waters)
• April 6, 1917 through November 11, 1918 – World War I
• December 7, 1941 through December 31, 1946 – World War II
• June 27, 1950 through January 31, 1955 – Korean Conflict
• February 28, 1961 through May 7, 1975 – Vietnam Era (For Veterans who served in the Republic of Vietnam. If not, the valid dates are August 5, 1964 through May 7, 1975.)
• August 2, 1990 through currently undetermined – Gulf War