If the pension from aid and attendance is paid to care giving spouse, is this included in household income?

If you are getting paid by VA for health care provided to someone else under a Aid & Attendance program, then yes, it counts as additional household income. The benefit is not taxable to the veteran receiving benefits - but it is income to the caregiver being paid. It may not be enough income to owe federal income taxes - check with a tax preparer - but the income for Aid & Attendance is usually included for benefits calculations.