Retirement tax questions

My mother-in-law has lived with me and my wife for 11 years. She receives about $17,000 in Social Security and about $10,000 in Veteran's Benefits since her husband died in 2015. My wife did not claim her as a dependent because we thought the Veteran's benefit was considered "gross income" above $4,500. But now I am starting to second guess that. Should we have been claiming her as a dependent all of these years? Her income does not cover all of the cost of rent, food, utilities, transportation, and now the medical care she needs (a caregiver for 40 hours per week.)