Citation Nr: 1223045 Decision Date: 07/02/12 Archive Date: 07/13/12 DOCKET NO. 02-14 440 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Chicago, Illinois THE ISSUE Entitlement to additional accrued Department of Veterans Affairs benefits. ATTORNEY FOR THE BOARD Robert J. Burriesci, Counsel INTRODUCTION The Veteran had active service from July 1950 to September 1953. He died in September 2001. The appellant is the Veteran's surviving spouse. This matter came before the Board of Veterans' Appeals (Board) on appeal from rating decisions of the Chicago, Illinois, Regional Office (RO). The Board notes that the appellant requested a hearing before a Veterans Law Judge of the Board in Washington, DC in connection with the current claim. The appellant subsequently withdrew her request for a Board hearing in January 2004. This case was previously before the Board in March 2004, August 2007, and March 2012 when it was remanded for further development. In August 2007 the Board noted that in June 2006, the RO issued a statement of the Case (SOC) to the appellant which addressed the issue of service connection for the cause of the Veteran's death. The Board further noted that the appellant did not submit a substantive appeal from the denial of service connection for the cause of the Veteran's death following the issuance of the June 2006 SOC and, as such, the Board found that it does not have jurisdiction over the issue. In addition, in August 2007 the Board noted that in September 2002, the appellant submitted a claim for VA burial benefits and, in August 2004, the appellant's representative at the time submitted a claim of entitlement to dependency and indemnity compensation under the provisions of 38 U.S.C.A. § 1318 (West 2002). The Board noted that it appeared that the RO had not had an opportunity to act upon the claims and that absent an adjudication, a notice of disagreement, a SOC, and a substantive appeal, the Board does not have jurisdiction over the issues. Rowell v. Principi, 4 Vet. App. 9 (1993); Roy v. Brown, 5 Vet. App. 554 (1993); Black v. Brown, 10 Vet. App. 279, 284 (1997); Shockley v. West, 11 Vet. App. 208 (1998). As such, the Board referred the issues of entitlement to VA burial benefits and entitlement to dependency and indemnity compensation under the provisions of 38 U.S.C.A. § 1318 (West 2002) to the RO for action as may be appropriate. Black v. Brown, 10 Vet. App. 279 (1997). Review of the claims file subsequent to the August 2007 Board action does not reveal that action has been taken on the referred issues. As such, the issues are again referred for RO action as may be appropriate. In an administrative decision, dated in February 2007, the RO increased the Veteran's accrued benefits for nonservice-connected pension and special monthly pension benefits from $94.00 (representing $47.00 a month) to $152.00 (representing $76.00 a month). Please note this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2011). 38 U.S.C.A. § 7107(a)(2) (West 2002). FINDINGS OF FACT 1. In an April 2002 rating, decision, the Veteran was awarded nonservice-connected pension and special monthly pension benefits, effective June 25, 2001, and the appellant was awarded accrued benefits, subsequently calculated to be payable at the rate of $76 monthly from July 1, 2001, to September 1, 2001, the first of the month of the Veteran's death. 2. During the relevant period the appellant and the Veteran's annualized income from Social Security Admininstration (SSA) benefits was $17,508. 3. During the one year annualization period prior to the Veteran's death, the appellant reported that unreimbursed medical expenses of $255, $73, and $73 had been made. 4. The appellant has paid $50 a month for Medicare premiums. 5. Total accrued benefits of $316 were due upon the death of the Veteran and the appellant has been paid $152 in accrued benefits. CONCLUSION OF LAW The appellant is eligible to receive additional accrued benefits in the amount of $164. 38 U.S.C.A. §§ 5121(a), 5122 (West 2002 & Supp. 2011); 38 C.F.R. § 3.1000 (2011). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. Duties to Notify and Assist As provided for by the Veterans Claims Assistance Act of 2000 (VCAA), VA has a duty to notify and assist claimants in substantiating a claim for VA benefits. 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5107, 5126 (West 2002 & Supp. 2011); 38 C.F.R. §§ 3.102, 3.156(a), 3.159 and 3.326(a) (2011). 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 notice from VA 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; and (3) that the claimant is expected to provide in accordance with 38 C.F.R. § 3.159. This notice must be provided prior to an initial unfavorable decision on a claim by the agency of original jurisdiction (AOJ). Mayfield v. Nicholson, 444 F.3d 1328 (Fed. Cir. 2006); Pelegrini v. Principi, 18 Vet. App. 112 (2004). Here, the duty to notify was not satisfied prior to the initial unfavorable decision on the claim by the AOJ. Under such circumstances, VA's duty to notify may not be "satisfied by various post-decisional communications from which a claimant might have been able to infer what evidence the VA found lacking in the claimant's presentation." Rather, such notice errors may instead be cured by issuance of a fully compliant notice, followed by readjudication of the claim. See Mayfield v. Nicholson, 444 F.3d 1328 (Fed. Cir. 2006) (where notice was not provided prior to the AOJ's initial adjudication, this timing problem can be cured by the Board remanding for the issuance of a VCAA notice followed by readjudication of the claim by the AOJ) see also Prickett v. Nicholson, 20 Vet. App. 370, 376 (2006) (the issuance of a fully compliant VCAA notification followed by readjudication of the claim, such as an SOC or SSOC, is sufficient to cure a timing defect). In this case, the VCAA duty to notify was satisfied subsequent to the initial AOJ decision by way of a letter sent to the appellant in June 2004 that fully addressed all four notice elements. The letter informed the appellant of what evidence was required to substantiate the claim and of the appellant's and VA's respective duties for obtaining evidence. Although the notice letter was not sent before the initial AOJ decision in this matter, the Board finds that this error was not prejudicial to the appellant because the actions taken by VA after providing the notice have essentially cured the error in the timing of notice. Not only has the appellant been afforded a meaningful opportunity to participate effectively in the processing of his claim and given ample time to respond, but the AOJ also readjudicated the case by way of a supplemental statement of the case issued in February 2011 after the notice was provided. For these reasons, it is not prejudicial to the appellant for the Board to proceed to finally decide this appeal as the timing error did not affect the essential fairness of the adjudication. VA has a duty to assist the Veteran in the development of the claim. This duty includes assisting the Veteran in the procurement of service treatment records and pertinent treatment records and providing an examination when necessary. 38 U.S.C.A. § 5103A; 38 C.F.R. § 3.159. After a careful review of the file, the Board finds that all necessary development has been accomplished, and therefore appellate review may proceed without prejudice to the appellant. See Bernard v. Brown, 4 Vet. App. 384 (1993). The Board notes that the adjudication of accrued claims is limited to the evidence physically or constructively of record at the time of the Veteran's death. 38 C.F.R. § 3.1000(a); see also Ralston v. West, 13 Vet. App. 108, 113 (1999); Hayes v. Brown, 4 Vet. App. 353, 360-61 (1993). Thus, the available records and medical evidence have been obtained in order to make adequate determinations as to these claims. The Board notes that the record does not otherwise indicate any additional existing evidence that is necessary for a fair adjudication of the claims that has not been obtained. Hence, no further notice or assistance is required to fulfill VA's duty to assist in the development of the claims. Smith v. Gober, 14 Vet. App. 227 (2000), aff'd, 281 F.3d 1384 (Fed. Cir. 2002); Dela Cruz v. Principi, 15 Vet. App. 143 (2001); see also Quartuccio v. Principi, 16 Vet. App. 183 (2002). II. Accrued Benefits VA law provides that where death occurred on or after December 1, 1962, periodic monetary benefits (other than insurance and servicemembers' indemnity) authorized under laws administered by VA, to which a payee was entitled at his or her death under existing ratings or decisions or those based on evidence in the file at date of death, and due and unpaid will, upon the death of such person, be paid as defined by regulation. See 38 U.S.C.A. § 5121; 38 C.F.R. § 3.1000(a). Applications for accrued benefits must be filed within one year after the date of death. 38 U.S.C.A. § 5121(c). In Jones v. West, the United States Court of Appeals for the Federal Circuit (Federal Circuit) concluded that, "for a surviving spouse to be entitled to accrued benefits, the Veteran must have had a claim pending at the time of his death for such benefits or else be entitled to them under an existing rating or decision." Jones, 136 F.3d 1296, 1299 (Fed. Cir. 1998). The Federal Circuit noted that "a consequence of the derivative nature of the surviving spouse's entitlement to a Veteran's accrued benefits claim is that, without the Veteran having a claim pending at time of death, the surviving spouse has no claim upon which to derive his or her own application." Id. at 1300 . The term "pending claim" means an application, formal or informal, which has not been finally adjudicated. 38 C.F.R. § 3.160(c) (2010). The term "finally adjudicated claim" means an application, formal or informal, which has been allowed or disallowed by the agency of original jurisdiction, the action having become final by the expiration of one year after the date of notice of an award or disallowance, or by denial on appellate review, whichever is earlier. 38 C.F.R. § 3.160(d); see also 38 C.F.R. §§ 20.1103, 20.1104 (2011). The Board notes that the statute regarding accrued benefits claims was amended by the Veterans' Benefits Improvement Act of 2008, Pub. L. No. 110-389, § 212, on October 10, 2008. Section 212 created a new statute, 38 U.S.C.A. § 5121A, which provided that if a claimant died while a claim or appeal for any benefit under a law administered by the Secretary was pending, a living person who would be eligible to receive accrued benefits due to the claimant under § 5121(a) of this title may, not later than one year after the date of the death of the claimant, request to be substituted as the claimant for the purposes of processing the claim to completion. The new statute allows a person who could be considered an accrued benefits claimant to substitute for a deceased claimant to continue adjudication of the deceased claimant's claim. The provisions of the new statute apply with respect to the claim of any claimant who dies on or after October 10, 2008. See Pub. L. No. 110-389, § 212, 122 Stat. 4145, 4151 (2008); see also Veterans Benefits Administration Fast Letter, Overview of Changes Made by Public Law 110-389, The Veterans' Benefits Improvement Act (Mar. 3, 2009). The change does not affect cases involving deaths prior to that time, such as this case. Following timely filing of a proper claim, such benefits will be paid according to a statutorily prescribed order of distribution. Under 38 U.S.C.A. § 5121, periodic monetary benefits to which a Veteran was entitled at death under existing ratings or decisions or those based on evidence in the file at the date of death (hereinafter referred to as "accrued benefits") and due and unpaid, shall, on the death of such Veteran be paid as follows: to the living person first listed below: (1) The Veteran's spouse; (2) The Veteran's children (in equal shares); (3) The Veteran's dependent parents (in equal shares). In all other cases, only so much of the accrued benefits may be paid as may be necessary to reimburse the person who bore the expense of last sickness and burial. 38 U.S.C.A. § 5121(a); 38 C.F.R. § 3.1000(a). Under 38 U.S.C.A. § 1513(a), as combined with 38 U.S.C.A. § 1521(a) and (e), a special monthly pension may be paid to a Veteran who is 65 years of age or older, meets the service requirement of 38 U.S.C.A. § 1521 and possesses a minimum disability rating of 60 percent. Under 38 U.S.C.A. § 1521(j) , a Veteran must have served in the active military, naval, or air service (1) for ninety days or more during a period of war; (2) during a period of war and been discharged or released from such service for a service-connected disability; (3) for a period of ninety consecutive days or more and such period began or ended during a period of war; or, (4) for an aggregate of ninety days or more in two or more separate periods of service during more than one period of war. Basic entitlement exists if, among other things, the Veteran's income is not in excess of the applicable maximum allowable pension rate specified in 38 C.F.R. § 3.23, as changed periodically and reported in the Federal Register. See 38 U.S.C.A. § 1521 (West 2002 & Supp. 2011); 38 C.F.R. § 3.3(a)(3) (2011). The maximum annual pension rate (MAPR) is periodically increased from year to year. 38 C.F.R. § 3.23(a) (2011). The maximum rates for improved pension shall be reduced by the amount of the countable annual income of the Veteran. 38 U.S.C.A. § 1521; 38 C.F.R. § 3.23(b). In addition, payment of a Veteran's pension shall be denied or discontinued based upon consideration of the annual income of the Veteran, the Veteran's spouse, and the Veteran's children. 38 U.S.C.A. § 1522(a) (West 2002 & Supp. 2011); 38 C.F.R. § 3.274 (2011). 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. 38 U.S.C.A. § 1503(a) (West 2002 & Supp. 2011); 38 C.F.R. § 3.271 (2011). Income from the SSA is 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 MAPR, 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) (2011). Under 38 C.F.R. § 3.272, exclusions from countable income for the purpose of determining entitlement to improved pension includes: welfare; maintenance; VA pension benefits, payments under Chapter 15, including accrued pension benefits; reimbursement for casualty loss; profit from sale of property; joint accounts (accounts in joint accounts in banks and similar institutions acquired by reason of death of the other joint owner); and medical expenses which have been paid, provided these medical expenses exceed five percent of the MAPR. As of December 1, 2000, the MAPR for a Veteran with one dependent, at the aid and attendance rate, was $18,405. The MAPR is published in Appendix B of VA Manual M21-1, Part I, and is to be given the same force and effect as if published in VA regulations. 38 C.F.R. §§ 3.21, 3.23. The MAPR is available at http://www.vba.va.gov/bln/21/Rates/ pen0100.htm. In an April 2002 rating decision, the RO awarded the Veteran nonservice-connected pension and special monthly pension based on the need for aid and attendance, effective June 25, 2001. In a notice letter, dated in July 2002, the appellant was informed that she entitled to special monthly pension based on the need for aid and attendance from June 25, 2001, to September 1, 2001, the first of the month of the Veteran's death, in the amount of $47 per month. The Veteran in Income-Net Worth Employment Statement, dated in June 2001, indicated that he reveived $869 a month in SSA benefits and that the appellant received $590 a month in SSA benefits. SSA printouts, dated in February 2002 and July 2002, indicate that at the time of the Veteran's death the appellant received $590 a month in benefits as of July 2001. An SSA letter dated in June 2000 indicates that the appellant was to be paid $590 in SSA benefits beginning December 2000 and that this would be reduced by $50 to $540 based upon medical insurance premiums. In October 2001 the appellant reported unreimbursed medical expenses of $255 from July 2001 to September 2001 and $134 from January 2000 to September 2000. The Board notes that the second sum is outside of the annualization period prior to the Veteran's death. A medical bill, dated in August 2001 has a handwritten note indicating that $73 was paid for medical expenses incurred by the Veteran in August 2001 and another $73 was paid for medical expenses incurred by the Veteran in September 2001. The remaining medical bills fall after the Veteran's death, and therefore could not have been paid during the period during which the Veteran was receiving the benefit, or did not indicate that any payment was made. In a statement, dated in August 2002, and in the appellant's substantive appeal, dated in September 2002, the appellant reported that she was receiving SSA benefits in the amount of $540 a month and that the Veteran was receiving SSA benefits in the amount of $761 a month at the time of the Veteran's death. The RO calculated the Veteran's income as $17,832 and subtracting this amount from the MAPR and dividing the amount by twelve achieved a monthly amount of $47, the amount awarded to the appellant. In February 2007 the RO recalculated the appellant's income taking into account the $50 a month Medicare insurance withheld from the appellant's SSA benefits. Based upon the calculations, the appellant's accrued benefits were increased from $94 (representing $47 a month) to $152 (representing $76 a month). The Board finds that the appellant is entitled to additional accrued benefits. During the relevant period the appellant and the Veteran's income from SSA benefits was $17,508. During the one year annualization period prior to the Veteran's death, the appellant reported that unreimbursed medical expenses of $255, $73, and $73 have been made. In addition, the Board noted in a March 2004 remand that the amount withheld by SSA for Medicare should be treated as unreimbursed medical expenses for the purposes of determining the level of income. It was determined that $50 each month was withheld by SSA for Medicare. As such, the Board notes that the $50 withheld during a one year annualization period is $600. Therefore, the total of unreimbursed medical expenses during the relevant period is $1001. The Board notes that this amount exceeds the five percent of MAPR ($609) and is, therefore, excludable from the total income. Subtracting this excludable income from the total income leaves $16,507. Subtracting the income from the MAPR for a Veteran with special monthly pension at the aid and attendance rate with one dependent and dividing by 12 leaves the monthly rate which the Veteran was entitled, $158. As the appellant has been noted to be entitled to two months of accrued benefits, the total accrued benefits due at the death of the Veteran is $316. As the Veteran has already been paid accrued benefits in the amount of $152, the Board finds that additional accrued benefits in the amount of $164 is granted. ORDER Entitlement to additional accrued Department of Veterans Affairs benefits in the amount of $164 is granted. ____________________________________________ MILO H. HAWLEY Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs