Medical bills can raise your VA pension or survivor benefit

What's new

On Oct 28, 2026, VA published a Federal Register notice (91 FR 67913) asking OMB to extend VA Form 21P-8416, Medical Expense Report (OMB 2900-0161). It's a routine extension of the current form, not a rule change. Public comments are due Nov 27, 2026. VA says the form lets claimants report unreimbursed medical expenses to reduce countable income for needs-based programs such as VA Pension and Parents' DIC.

Why medical bills matter

Veterans Pension, Survivors Pension and Parents' DIC are income-based. VA subtracts countable income from a maximum rate. When VA deducts your out-of-pocket medical costs, your countable income goes down. That can help you qualify or raise your monthly payment.

This is different from disability compensation, which isn't income-based. See 2027 VA disability rates for compensation.

What can count (38 CFR 3.278)

The cost must be paid by you and not reimbursed by insurance or anyone else. Examples in the rule:

• Health insurance premiums, including Medicare Parts A, B and D and long-term care insurance.
• Payments to doctors, nurses, therapists and other licensed providers.
• Prescription and over-the-counter medicine, medical supplies and equipment.
• Adaptive devices and service animals, including vet care.
• Medical travel: bus, taxi, or your own car at the GSA mileage rate, plus parking and tolls, minus any travel pay you got back.
• In-home care and assisted living or other care facilities, and nursing homes. There are conditions. For example, a non-licensed in-home attendant counts if you need aid and attendance, are housebound, or a physician, PA, nurse practitioner or clinical nurse specialist states in writing that you need that care.

Not counted: things for general health, like gym or dance classes, most cosmetic procedures, and (outside the care rules above) meals, lodging and help with chores.

The deductible threshold: 5%

For Veterans Pension and Survivors Pension, VA deducts only the part of your unreimbursed medical expenses that is more than 5% of your maximum annual pension rate (MAPR). That rate includes amounts for dependents but not the extra amounts for aid and attendance or housebound status. The expense counts in the 12-month period you paid it. You can also give VA a reasonable estimate of expected costs, and VA adjusts later (38 CFR 3.272(g)).

Parents' DIC uses its own deduction rule in 38 CFR 3.262(l). Check current MAPR amounts on VA's pension rates page.

How to report: VA Form 21P-8416

1. Gather receipts, premium statements, care contracts and mileage logs. Keep copies.
2. Fill out VA Form 21P-8416 (online or paper). List only expenses you weren't reimbursed for and don't expect to be.
3. Submit it with your pension claim, or any time your medical costs change.
4. A free accredited VSO can check the form with you at no cost.

Watch out for pension poachers

• No one may charge you a fee to prepare or file an initial VA claim (38 CFR 14.636). Pension help is free from VSOs.
• Be wary of anyone who pushes you to move assets, buy annuities or trusts, or sign a care contract to "qualify" for pension. Moving assets can create a penalty period and hurt Medicaid eligibility.
• Check that anyone helping you is accredited using VA's accredited representative search.

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