Question

"Our state LIHTC agency wants us to change something, and we are worried that it will undercount income if we make the change. We have a family where the head is a veteran who receives veteran's benefits, including an aid and attendance benefit. Additionally, the co-head receives aid and attendance as a surviving spouse of a veteran. Our agency has moved to HOTMA calculations. They liked that we excluded the aid and attendance for the veteran, but said that we were wrong for including the benefit as income for the survivor. Were we incorrect?"  

Answer

Summary: Rest assured that the approach taken by management was correct. Under HOTMA regulations, aid and attendance benefits are excluded only when paid to a veteran. They are not excluded if the benefits are paid to a survivor or other person who receives benefits because of their relationship with a veteran.  

Sharing the following references with the LIHTC agency may be helpful. HUD regulation 24 CFR § 5.609(b)(17) says that excluded income includes "payments related to aid and attendance under 38 U.S.C. 1521 to veterans in need of regular aid and attendance." Careful reading is needed here, with focus on the words "to veterans." When discussing these benefits, HUD HOTMA Notice H 2023-10 G.10 clarifies, "this income exclusion applies only to veterans in need of regular aid and attendance and not to other beneficiaries of the payments, such as a surviving spouse."

We commend the questioner for carefully reading the documentation that they received for these benefits to establish that they are aid and attendance, and that they are for a veteran or for a survivor. As an additional reminder, the HOTMA Notice quoted above continues about aid and attendance benefits, "these payments are distinct from payments made to veterans under other VA programs, including the Veterans Pension program. PHAs/MFH Owners should carefully review any income documentation provided by the family, because many types of VA income, including the Veterans Pension and the VA Survivors Pension, are included in annual income."