Citation Nr: 1303795 Decision Date: 02/04/13 Archive Date: 02/08/13 DOCKET NO. 11-29 131 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in St. Petersburg, Florida THE ISSUE Entitlement to nonservice-connected pension benefits, since January 1, 2010. REPRESENTATION Appellant represented by: The American Legion ATTORNEY FOR THE BOARD W. Yates, Counsel INTRODUCTION The Veteran served on active duty from November 1943 to July 1946. The appellant is the Veteran's VA appointed legal custodian. This matter comes before the Board of Veterans' Appeals (Board) on appeal from an October 2010 rating decision by the Department of Veterans Affairs (VA) Regional Office (RO) and Insurance Center in Philadelphia, Pennsylvania. Jurisdiction of the case was subsequently transferred to the RO in St. Petersburg, Florida. This appeal has been advanced on the Board's docket. 38 U.S.C.A. § 7107(a)(2) (West 2002); 38 C.F.R. § 20.900(c) (2012). FINDINGS OF FACT 1. On January 1, 2010, the Veteran's net worth was approximately $199,938. 2. In 2009, the Veteran received approximately $1,705.50 per month ($20,466.00 per year) from the Social Security Administration (SSA); $1,644.00 per month ($19,728.00 per year) from his civil service retirement; and $15,545.41 per year in interest and dividends; and $522.50 in other yearly income. 3. In February 2010, the Veteran submitted an Improved Pension Eligibility Verification Report noting that his yearly unreimbursed medical expenses in 2009 were $44,032.00. It also indicated that his anticipated unreimbursed medical expenses in 2010 were $49,504.00. 4. In November 2010, the Veteran submitted a notice of disagreement indicating that his yearly unreimbursed medical expenses had increased to $5,095 per month ($61,140.00 per year). 5. It is reasonable that some portion of the Veteran's assets be consumed to pay for his maintenance. CONCLUSION OF LAW The corpus of the Veteran's estate precludes the payment of nonservice-connected pension benefits. 38 U.S.C.A. § 1522 (West 2002 & Supp. 2012); 38 C.F.R. §§ 3.23, 3.260, 3.262, 3.263, 3.271, 3.272, 3.274, 3.275 (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSION Resolution of this appeal rests solely on the interpretation of the law, rather than a dispute as to the underlying facts of this case. Specifically, the outcome in this case is dictated by the financial information provided by the Veteran. No reasonable possibility exists that any additional assistance would aid in substantiating the claim. 38 U.S.C.A. § 5103A (West 2002); 38 C.F.R. § 3.159(c) (2012). VA's duties to notify and assist are not applicable to matters in which the law, and not the evidence, is dispositive. See Mason v. Principi, 16 Vet. App. 129, 132 (2002); Dela Cruz v. Principi, 15 Vet. App. 143 (2001). Accordingly, the Board finds no prejudice toward the Veteran in proceeding with the adjudication of his claim. Pension benefits are paid at the maximum annual rate reduced by the amount of annual income received by the Veteran. 38 C.F.R. § 1522; 38 C.F.R. § 3.23(a), (b). Basic entitlement exists if the Veteran meets the net worth requirements and does not have an annual income in excess of the applicable annual pension rate. 38 C.F.R. §§ 3.3, 3.23, 3.274. In determining countable annual income for improved pension purposes, 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. See 38 U.S.C.A. § 1503(a) (West 2002 & Supp. 2012); 38 C.F.R. §§ 3.260, 3.261, 3.262, 3.271(a), 3.272 (2012). As is relevant here, income from Social Security Administration benefits, retirement benefits, stocks and bonds dividends, and interest income are not specifically excluded under VA's governing regulations and therefore is included as countable income. See 38 C.F.R. § 3.271. Income is counted toward the calendar year in which it is received. 38 C.F.R. § 3.260(a). Recurring income, received or anticipated in equal amounts and at regular intervals such as weekly, monthly, quarterly and which will continue throughout an entire 12-month annualization period, will be counted as income during the 12-month annualization period in which it is received or anticipated. 38 C.F.R. § 3.271(a)(1). Unreimbursed medical expenses will be excluded from income when all of the following requirements are met: (i) they were or will be paid by a Veteran or spouse for medical expenses of the Veteran, spouse, children, parents and other relatives for whom there is a moral or legal obligation of support; (ii) they were or will be incurred on behalf of a person who is a member or a constructive member of the Veteran's or spouse's household; and (iii) they were or will be in excess of five percent of the applicable maximum annual pension rate or rates for the Veteran (including increased pension for family members but excluding increased pension because of need for aid and attendance or being housebound) as in effect during the 12-month annualization period in which the medical expenses were paid. 38 C.F.R. § 3.272(g). The statutes and regulations provide that pension shall be denied or discontinued when the corpus of the estate is such that under all the circumstances, including consideration of annual income, it is reasonable that some part of the corpus of such estate be consumed for the Veteran's maintenance. See 38 U.S.C.A. § 1522(a); 38 C.F.R. § 3.274(a). The terms "corpus of estate" and "net worth" are interchangeable and mean the market value, less mortgages or other encumbrances, of all real and personal property owned by the claimant, except the claimant's dwelling (single family unit), including a reasonable lot area, and personal effects suitable to and consistent with the claimant's reasonable mode of life. See 38 C.F.R. §§ 3.263(b). In determining whether the estate should be used for the claimant's maintenance, factors to be considered include: whether the property can be readily converted into cash at no substantial sacrifice; life expectancy; the number of dependents; and, the potential rate of depletion, including spending due to unusual medical expenses. See 38 C.F.R. § 3.275(d). The considerations concerning net worth as an eligibility factor for pension, as set forth above, are necessary since it is inconsistent with the pension program to allow a claimant to collect a pension while simultaneously enjoying the benefit of a sizable estate. 38 C.F.R. § 3.3(a)(3)(v). There are no precise guidelines, however, which establish what size estate would preclude the payment of pension. In February 2010, the Veteran submitted an Improved Eligibility Verification Report, VA Form 21-0516. He reported having an interest bearing bank account worth $7,733.00 and owning stocks, bonds and mutual funds valued at $192,205.58. Thus, his net worth was approximately $199,938. As for income, the Veteran reported receiving approximately $20,464.80 per year ($1,705.40 per month) from Social Security Administration; $19,728.00 per year ($1,644.00 per month) from his civil service retirement; $15,545.41 per year in interest and dividends; and $522.50 in other yearly income. Thus, he reported a total yearly income of $56,261. As for medical expenses, the Veteran reported having unreimbursed medical expenses in 2009 totaling $44,032.00; and anticipated unreimbursed medical expenses in 2010 of $49, 504. In October 2010, the RO verified that the Veteran was receiving monthly SSA benefits of $1705.50 ($20,466.00 yearly). An October 2010 Report of Contact indicated that the RO contacted the appellant regarding the increase in the Veteran's net worth. The appellant indicated that the additional income was from the sale of the Veteran's home. In December 2010, the appellant submitted a statement indicating that the Veteran's medical needs had increased, and that he had to be transferred to a new extended care facility which resulted in an increased medical cost of $5,095 per month (or $61,140 per year). Initially, the Board finds that the Veteran does not have an annual income in excess of the applicable annual pension rate. 38 C.F.R. §§ 3.3(a)(3)(v) 3.23. Using the figures supplied by the Veteran, his yearly income totals $56,261. See 38 C.F.R. § 3.260. However, his reported medical expenses are deducted from this amount, which leaves the Veteran's with a yearly income deficit of $4,879. See 38 C.F.R. § 3.272. Thus, the Veteran meets the income requirements to received a pension. The issue becomes whether it is reasonable for a portion of Veteran's net worth to be consumed to provide for his maintenance. Although his yearly expenses are greater than his yearly income, the corpus of his estate is substantial. The Veteran reported having an interest bearing bank account worth $7,733.00 and owning stocks, bonds and mutual funds valued at $192,205.58. Thus, his net worth was approximately $199,938. 38 C.F.R. § 3.263. As of January 1, 2010, the Veteran was 84 years old and had a life expectancy of 6.6 years. See M21-MR, Part V. Subpart iii, Chapter 1, Section J, Topic 72, Exhibit 1: Life Expectancy Table for Net Worth Determinations. Given his substantial net worth of $199,938, the liquidity of his assets, his reported yearly deficit spending of $4,878.73, and his projected life expectancy of 6.6 years, the Board finds that the Veteran's net worth is of sufficient size such that some portion of it should be consumed to defray the costs of his maintenance. 38 C.F.R. §§ 3.274, 3.275. As noted above, the purpose of VA pension, an income based program, is to provide beneficiaries with a minimum level of financial security. It is not intended to protect financial assets or build up the estate for the benefit of heirs. Accordingly, the Board concludes that the Veteran's net worth currently is a bar to the Veteran's receipt of nonservice-connected pension benefits. ORDER Nonservice-connected pension benefits, since October 1, 2009, is denied. ____________________________________________ JOY A. MCDONALD Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs