Your mom sounds too active to trigger the VA Pension at this time.Read the post by Cheryl and myself about how the VA works. It only kicks in AFTER your mom has paid. The VA allows her to have around 70-80k when the time comes so if she is over that amount now, you need to be ready to act when the time comes
However, I would immediately move any "inverstments" into fixed accounts. ie CDs. It is inappropriate for an 88 yr old to be in an postion to have lost half of the account value because of the market. Unfortunately the reality is that she will not regain the value. If she had 100k and lost 25%, then she would need to earn 33% just to get back to 100k. If she lost 50% then she will need to earn 100% to just get back to the 100k. The risk you would have to take to even try is too large. I have had over 1100 client in the last ten year. The average age is 81 and most are recieving some care (unpaid from family) but none of my clients have ever lost money. I don't want to seem like a naysayer, but I specialize in working with only older seniors and have a great deal of experience in this area..
Take a look at her taxes. If she is paying taxes it could be because the 3,600 is triggering it. Look at selling some of the investments that have lost $$ to generate the 300 a month. You will get a deduction for the lose and the 300 is coming from principle not earnings. This will allow her to keep more of her income.
Depending on how low her income is, you should look at the QMB and SLMB programs thu Medicare. Also the EXTRA HELP program thru Part D.
Also, check to see if the housing has HUD. My understanding is that HUD is only income tested, not asset tested. HUD goes up to 15-1700 of incme (dont quote me) and only charges 30% of income for rent.
Being in a 'spending mode" as opposed to a 'saving mode' takes a comprehensive look at all areas and options. There is no such thing as "she has too much money to qualify for that program". As an example, if we all just filed the short form on uor taxes then life would be so much easier....BUT we'd have less money!!!! So we all look for every possible deduction and file the long form. Qualifing for benefits and programs takes the same type of approach.