The move is a stunning turnaround for the department, which for months has maintained the moves are necessary.
Advocates say new eligibility requirements will exclude veterans in need of full-time care.
Nearly 20,000 caregivers of injured veterans will have their cases re-examined to see if they still qualify for the benefit.
Currently, only veterans who served after 2001 are eligible for the monthly caregiver compensation program.
VA officials say the document, which says veterans with jobs are ineligible for the program, is a mistake.
Department officials missed a deadline get new technology to process new enrollments in place by this fall.
