VA Aid and Attendance for Home Care

The Aid and Attendance benefit deposits cash directly into the veteran's bank account — and the family decides how to spend it. There are no restrictions requiring a specific type of care facility. Most families use the benefit to pay for home care, whether from a professional home health agency or a family member providing daily assistance.

But paying a family caregiver with VA funds requires a specific legal arrangement. Skip the paperwork, and you lose the medical expense deduction that likely qualifies the veteran in the first place.

How the Benefit Covers Home Care

The VA doesn't pay caregivers directly. The monthly benefit (up to $2,874 for a married veteran in 2026) goes to the veteran's bank account. The family uses those funds — along with other income — to pay for care.

Home care costs also serve a dual purpose: they're deductible as unreimbursed medical expenses, reducing the veteran's countable income for eligibility calculations. A veteran paying $3,000 per month for home care can deduct those costs to bring their Income for VA Purposes to zero, qualifying for the maximum benefit.

Paying a Family Member as Caregiver

The VA allows families to hire adult children, siblings, parents, or friends as in-home caregivers and count those payments as deductible medical expenses. But the arrangement must follow strict rules under the VA's Adjudication Procedures Manual (M21-1).

The Rules

No spousal caregivers. A veteran cannot pay their spouse for caregiving and claim it as a medical deduction. The VA considers spousal care a marital obligation, not a medical expense.

Written caregiver agreement required. The arrangement must be governed by a Personal Services Contract (caregiver agreement) signed before care begins. The contract must detail:

• Specific services to be provided
• Hours of care per week
• Hourly wage at or near local market rates
• Start date of the arrangement

Retroactive agreements — contracts written after care has already been provided — are rejected by the VA.

Market-rate compensation. The hourly rate must be consistent with local home care agency rates. If agencies in your area charge $25 to $30 per hour, paying a family member $50 per hour will be questioned. Paying $15 per hour for the same services is fine — below-market rates are accepted; above-market rates raise red flags.

Payment by check or bank transfer only. Cash payments are routinely disqualified because they lack an auditable paper trail. Every payment must be traceable through bank statements.

The caregiver reports income. The person receiving payment must report it as earned, taxable income on their federal tax return. This is a legal employment arrangement, not an informal family gift.

Documentation to Maintain

Under VA manual guidelines, families should maintain for at least five years:

• The signed caregiver agreement
• Monthly care logs detailing services rendered and hours worked
• Bank statements showing cleared checks or transfers to the caregiver
• Copies of the caregiver's tax returns showing reported income

The VA can audit these records at any time. Complete documentation prevents benefit reduction or termination.

Hiring a Home Health Agency

Professional home health agencies simplify the documentation burden — they provide invoices, maintain care logs, and handle employment taxes. Agency costs are automatically treated as deductible medical expenses without the need for a Personal Services Contract.

Agency rates typically run $25 to $35 per hour. At 4 hours per day, 5 days per week, that's roughly $2,600 to $3,640 per month — close to the maximum Aid and Attendance benefit for a married veteran.

Aid and Attendance vs. the VA Caregiver Support Program

Don't confuse Aid and Attendance (a VBA pension benefit) with the Program of Comprehensive Assistance for Family Caregivers (PCAFC), which is a VHA clinical program. Key differences:

If the veteran has a service-connected disability rated 70% or higher, the PCAFC may pay more and provide additional caregiver support. The two programs have entirely separate eligibility criteria and application processes.

The Veterans' Benefits for Elder Care Toolkit includes a caregiver agreement template and the documentation checklist for family caregiver arrangements.