Citation Nr: 0610116 Decision Date: 04/06/06 Archive Date: 04/13/06 DOCKET NO. 05-13 268 ) DATE ) ) On appeal from the Department of Veterans Affairs (VA) Regional Office (RO) in Chicago, Illinois THE ISSUE Whether the appellant's countable income exceeds income limitations for entitlement to payment of VA improved death pension benefits. REPRESENTATION Appellant represented by: Veterans of Foreign Wars of the United States WITNESS AT HEARING ON APPEAL The appellant ATTORNEY FOR THE BOARD R. A. Seaman, Counsel INTRODUCTION The veteran served on active duty from December 1942 to November 1946. He died in September 1978, and the appellant is his surviving spouse. This matter is before the Board of Veterans' Appeals (Board) on appeal from an August 2004 decision by the Chicago VA Regional Office (RO). In August 2005, the Board granted the appellant's motion to advance her appeal on the Board's docket. This case was before the Board in September 2005, when it was remanded to schedule the appellant for a hearing before a Veterans Law Judge. In March 2006, the appellant testified at a videoconference hearing before the undersigned. At the March 2006 hearing, the appellant's representative noted that the appellant had previously raised the issue of entitlement to a higher rate of pension based on a need for aid and attendance or on being housebound. Although a June 2005 report of examination for housebound status or permanent need for regular aid and attendance (VA Form 21-2680) is of record, the RO has not yet adjudicated this claim, and the Board does not have jurisdiction in the matter. It is referred to the RO for expedited appropriate action. FINDINGS OF FACT 1. The veteran died on September [redacted], 1978; the RO received the appellant's claim for improved death pension benefits in September 2002. 2. The maximum countable income a surviving spouse, alone, could receive during any year during the appellate period and still be eligible for improved death pension benefits is $7,094 (effective December 1, 2005). 3. The appellant's countable income did not fall below $7,094 for any year since she filed her claim for death pension benefits. CONCLUSION OF LAW The appellant's countable income exceeds income limitations for entitlement to improved death pension benefits. 38 U.S.C.A. §§ 1503, 1541, 5107 (West 2002 & Supp. 2005); 38 C.F.R. §§ 3.3, 3.23, 3.271, 3.272 (2005). REASONS AND BASES FOR FINDINGS AND CONCLUSION Preliminary Matters The Veterans Claims Assistance Act of 2000 (VCAA), in part, describes VA's duty to notify and assist claimants in substantiating a claim for VA benefits. 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5107, 5126; 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a). Upon receipt of a complete or substantially complete application for benefits, VA is required to notify the claimant and his or her representative, if any, of any information, and any medical or lay evidence, that is necessary to substantiate the claim. 38 U.S.C.A. § 5103(a); 38 C.F.R. § 3.159(b); Quartuccio v. Principi, 16 Vet. App. 183 (2002). Proper VCAA notice must inform the claimant of any information and evidence not of record (1) that is necessary to substantiate the claim; (2) that VA will seek to provide; (3) that the claimant is expected to provide; and (4) must ask the claimant to provide any evidence in her or his possession that pertains to the claim in accordance with 38 C.F.R. § 3.159(b)(1). VCAA notice should be provided to a claimant before the initial unfavorable agency of original jurisdiction (AOJ) decision on a claim. Pelegrini v. Principi, 18 Vet. App. 112 (2004); see also Mayfield v. Nicholson, 19 Vet. App. 103 (2005). The appellant was provided VCAA notice in October 2004 correspondence from the RO, and in an April 2005 statement of the case (SOC). Although she was provided full notice/information subsequent to the rating decision appealed, she is not prejudiced by any notice timing defect. She was notified (in the October 2004 correspondence and in the April 2005 SOC) of everything required, and has had ample opportunity to respond and/or supplement the record and participate in the adjudicatory process. Regarding content of notice, the April 2005 SOC informed the appellant of what the evidence showed and why the claim was denied. She was advised by the October 2004 correspondence and the April 2005 SOC that VA would make reasonable efforts to help her get pertinent evidence, but that she was responsible for providing sufficient information to VA to identify the custodian of any records. The correspondence and the April 2005 SOC advised the appellant of what the evidence must show to establish entitlement to the benefits sought. The April 2005 SOC contained the text of the regulation implementing the VCAA, including the specific provision that the claimant is to be advised to submit everything in her possession pertinent to the claim. Everything submitted to date has been accepted for the record and considered. Regarding the duty to assist, VA has obtained all pertinent/identified records that could be obtained, and all evidence constructively of record (pertinent VA records) has been secured. Evidentiary development is complete; VA's duties to notify and assist are met. It is not prejudicial to the appellant for the Board to proceed with appellate review. Mayfield, supra; Conway v. Principi, 353 F.3d 1369 (Fed. Cir. 2004). Finally, during the pendency of this appeal, on March 3, 2006, the U.S. Court of Appeals for Veterans Claims (Court) issued a decision in the consolidated appeal of Dingess/Hartman v. Nicholson, Nos. 01-1917 and 02-1506, (U.S. Vet. App. Mar. 3, 2006). As the appeal in this case involves payments of death pension, not DIC Dingess has no impact on this appeal. Background The veteran died in September 1978. In September 2002, the appellant filed a VA Form 21-534 (Application for Dependency and Indemnity Compensation, Death Pension, and Accrued Benefits by a Surviving Spouse), wherein she identified herself as the veteran's surviving spouse. She did not report that she had any dependent children. Her gross monthly income from Social Security was reported to be $750 per month, or $9,000 per year. No itemized deductible expenses were listed in the boxes provided on the form. In January 2003 correspondence, the appellant reported that her health insurance premium had "doubled" (she did not report a specific amount). In a VA Form 21-8416 (Medical Expense Report) dated in April 2003 (reflecting medical expenses in 2002), the appellant reported a Medicare deduction totaling $540 per year, a Blue Cross and Blue Shield medical insurance payment of $1,204 per year, and a $60 per year self-payment for medications. In adjudicating this matter, the RO informed the appellant that the $540 she reported as a yearly Medicare deduction could not be considered because information obtained from the Social Security Administration showed that such premium was paid by the state. In August 2004, the RO determined that with consideration given to the total unreimbursed medical expenses of $1,264, the appellant's annual income still exceeded the maximum income ($6,407 for 2002) allowed by law for receiving improved death pension benefits. At the March 2006 videoconference hearing, the appellant testified that her income was $760 per month, or $9,120 per year. She was aware that VA denied her claim because her income exceeded the income cap for payment of death pension benefits. She was informed that unreimbursed medical expenses are deductible from countable income, but that household expenses are not. While she understood that her income was excessive, she reported that she still struggled to make ends meet due to her regular household expenses, medical bills, and medication. She testified that she has many medical expenses, and that Medicare pays for most of her expenses, but that she has to make copayments for medication. She stated that she takes approximately five different medications, and the copayments on "[a] couple is like $3 each. The rest is like maybe $1. Some I don't pay nothing." She claimed yearly medical expenses of $200 for dental appointments. When asked specifically what medical expenses she had to pay herself, the appellant answered that Medicare covers most of her medical expenses. (See transcript, p. 9). Death Pension Benefits - Law and Analysis Improved pension awarded pursuant to Public Law 95-588 is a monthly benefit payable by VA to a surviving spouse and children of the veteran. Specifically, the law provides that the Secretary shall pay to the surviving spouse of each veteran who served for ninety (90) days or more during a period of war or who at the time of death was receiving or entitled to receive compensation or retirement pay for a service-connected disability, pension at the rate prescribed by law and reduced by the surviving spouse's annual income. 38 U.S.C.A. §§ 101(12), 1521(j), 1541(a); 38 C.F.R. §§ 3.3(b)(4), 3.23. Death pension benefits are based on income. Payments of these pension benefits are made at a specified annual maximum rate, reduced on a dollar-for-dollar basis by annualized countable income. 38 U.S.C.A. §§ 1503, 1521; 38 C.F.R. §§ 3.3, 3.24. In determining annual income, all payments of any kind or from any source (including salary, retirement or annuity payments, or similar income, which has been waived) shall be included except for listed exclusions. See 38 U.S.C.A. § 1503(a); 38 C.F.R. § 3.271(a). Social Security benefits are not specifically excluded under 38 C.F.R. § 3.272. Such income is therefore included as countable income. Medical expenses in excess of five percent of the maximum income rate allowable, which have been paid, may be excluded from an individual's income for the same 12-month annualization period, to the extent they were paid. 38 C.F.R. § 3.272(g)(1)(iii). Burial expenses paid by a surviving spouse during the calendar year following that in which death occurred may be deducted from annual income for the 12-month annualization period in which they were paid or from annual income for any 12-month annualization period which begins during the calendar year of death, whichever is to the claimant's advantage. However, any such expenses paid subsequent to death but prior to date of entitlement (i.e. the effective date) are not deductible. 38 C.F.R. § 3.272(h). The rates of death pension benefits are published in tabular form in appendix B of Veterans Benefits Administration Manual M21-1 (M21-1), and are given the same force and effect as if published in the Code of Federal Regulations. 38 C.F.R. § 3.21. The rates for the pertinent years are as follows: Effective December 1, 2001, the maximum allowable rate for a surviving spouse with no children was $6,407. See M21-1, part I, Appendix B, (change 41) (November 4, 2002). Effective December 1, 2002, the maximum allowable rate for a surviving spouse with no children was $6,497. See M21-1, part I, Appendix B, (change 46). Effective December 1, 2003, the maximum allowable rate for a surviving spouse with no children was $6,634. See M21-1, part I, Appendix B. Effective December 1, 2004, the maximum allowable rate for a surviving spouse with no children was $6,814. See M21-1, part I, Appendix B. Effective December 1, 2005, the maximum allowable rate for a surviving spouse with no children was $7,084. See M21-1, part I, Appendix B. Thus, the most income a surviving spouse (without dependent children) could have in any year during the appellate period and still be entitled to receive death pension payments was $7,084. The record shows (and the appellant does not dispute) that in every year under consideration, i.e., from when she filed her claim through 2005, her income, less permitted exclusions, exceeded that amount. Most recently (at the March 2005 hearing), the appellant reported an annual income of $9,120. The appellant argues that she should nonetheless be entitled to pension payments as her income is inadequate for her support. The Board realizes that the appellant's income from all sources may well fall short of providing for all her needs. However, the Board is bound by the noted income limitations, which have the force of regulation, and has no authority to disregard them. While the Board empathizes with the financial difficulties the appellant experiences, it lacks the legal authority to grant the benefit she seeks. The law is dispositive, and the claim must be denied. See Sabonis v. Brown, 6 Vet. App. 426 (1994). ORDER The appeal to establish that the appellant's income is not a bar to payment of improved death pension benefits is denied. ____________________________________________ GEORGE R. SENYK Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs