California Department of Social Services - State Hearings Division
Notes from the Training Bureau - December 2, 1998

AA payments paid to an institutionalized veteran with a community spouse are exempt. The AA exemption for institutionalized spouses is limited to the determination of countable income of the institutionalized spouse. AA payments received by the institutionalized spouse who has a community spouse are only excluded from countable income of the institutionalized spouse. AA payments must be excluded from the institutionalized spouse’s income before determining how much he/she has available to allocate to the community spouse under the spousal impoverishment rules. AA payments are not exempt for any other purpose. If the institutionalized spouse gives some or all of the AA payment to the community spouse, that AA payment is income to the community spouse and is counted when calculating his/her unmet need for purposes of determining the spousal allocation.

The first $90 of an AA payment to an institutionalized veteran or to the widow/widower is exempt.