Thanks, Perna. I bookmarked that first site. (It looks like the VA does not provide the grave liner.) Then I downloaded the booklet. I'll print a copy for his kids. We have a military base on the edge of town. So that would be another resource. You're always a good guide about where to find answers, Perna.

You might remember, a few years ago, when we were discussing that "VA Pension for Aid and Attendance." I was told that my friend would lose his housing subsidy, if he got that benefit. Well, the apartment complex manager who told us that was ill informed about the HUD regulations. I relied on her knowing and my friend missed out on several years of benefits that he could have gotten. Thanks to that manager making us feel so threatened, I aborted the application procedure that I had started.

Here's the definitive answer: The "Pension" is considered as income by HUD. However, if the money from the "Pension" is totally spent on hiring caregivers (necessary for the vet to stay out of a nursing home,) then that money becomes revenue neutral because money spent to hire caregivers is considered a medical expense that is fully deductable from gross income. That manager was saying that she was not going to consider "maid service" as a deductable medical expense. Well, she's not so smart as she thought she was. If what she deemed as maid service is necessary for my friend to stay in his apartment because he is not physically capable of vacuuming the rug and washing the laundry and carrying home the groceries, then HUD considers help he pays to do those things to be a medical expense (for HUD purposes.) (Even the social worker at the VA didn't understand that. She said, "Oh, they just can't count it." Not true. They can. But they also have to apply the relevant expenditures to maintain independence as deductions from income made necessary by a medical condition. Those expenses are fully deductable from total income, even though they don't sound like medical expenditures in the classic sense. A doctor has to certify that the recipient is physically and/or mentally incapable of independently accomplishing the tasks required to maintain the upkeep of the home. I can see where people do get confused.)

Then there's a bit of a twist that totally throws people off. That income from the "Pension for Aid and Assistance" can be spent by the vet (or on behalf of the vet) for any darn thing the vet wants to spend it on - vacation in the Bahamas, new furniture, down payment on a car, etc. (It cannot be garnished by creditors, though the vet can pay off bills with it, if he likes.) Here's the twist: monies spent on things that cannot somehow be related to a necessity created by his medical condition are not deductable from his total income. So that money can cause a reduction in his HUD subsidy.

The IRS simply does not count the "Pension for A. & A." at all. So it has no tax consequences (federally,) regardless of how he spends it. The House of Representatives tried to enact legislation that would have made it illegal for anyone to ever count any of this money as income. That passed in the House, but died in the Senate. Just thought I'ld share that. Most everyone is confused . . . even people who have a responsibility to know.