Citation Nr: 1306036 Decision Date: 02/21/13 Archive Date: 02/27/13 DOCKET NO. 11-22 807 ) DATE ) ) On appeal from the Department of Veterans Affairs Pension Management Center in St. Paul, Minnesota THE ISSUE Whether termination of the Veteran's nonservice-connected pension benefits, effective October 1, 2009, was proper. REPRESENTATION Appellant represented by: Daniel G. Krasnegor ATTORNEY FOR THE BOARD S. Coyle, Counsel INTRODUCTION Pursuant to 38 C.F.R. § 20.900(c), the appeal has been advanced on the Board's docket. The Veteran served on active duty from June 1945 to May 1950. This matter is before the Board of Veterans' Appeals (Board) on appeal of a February 2011 decision by the Department of Veterans Affairs (VA) Pension Management Center in St. Paul, Minnesota. The issue has been recharacterized to comport with the evidence of record. In January 2012, the Board determined that termination of the Veteran's nonservice-connected pension benefits, effective October 1, 2009, was proper. The veteran subsequently appealed that decision to the United States Court of Appeals for Veterans Claims (Court). In June 2012, a Joint Motion for an Order Vacating the Board Decision (Joint Motion) was brought before the Court. In an Order dated that same month, the Court vacated the January 2012 Board decision pursuant to the Joint Motion, and remanded the case to the Board for readjudication consistent with its Order. The appeal is REMANDED to the VA Pension Management Center in St. Paul, Minnesota. VA will notify the appellant if further action is required. REMAND In December 2009, the Veteran was awarded special monthly pension based on the need for aid and attendance, effective September 18, 2009; however, in February 2011, these benefits were terminated, effective October 1, 2009, because his countable income exceeded the maximum annual pension rate (MAPR). The Pension Management Center considered the Veteran's entire yearly U.S. Civil Service Retirement System (CSRS) annuity of $21,468, his yearly Social Security benefits of $6,112, and deducted $4, 182 in medical expenses to arrive at a countable income of $23,398, which exceeded the $19,736 MAPR for a veteran with no children in 2009. The Veteran appealed the determination, indicating his countable income was calculated incorrectly. He contends that 50 percent of his yearly CSRS annuity should be excluded from his gross yearly income, as it is paid directly to his former spouse pursuant to a marital separation agreement and subsequent court order. In the June 2012 Joint Motion, the parties directed that the Board consider whether the Veteran and his former spouse were awarded individual property rights in the annuity payments, and whether his former spouse's payments may in fact "represent a payment to her of her own separate property." See Joint Motion for Remand, Vet. App. No. 12-0558, p. 3. The question of whether benefits that are payable to a former spouse can be included in countable income "turns on whether the payments are made from assets which are the property of the veteran or from those which are the property of the ex-spouse." If such payments are made to benefit the Veteran by fulfilling a legal obligation, such as spousal support, then they are to be included as annual income. However, if the veteran has been divested of interest in the payments as a result of court-ordered property division or an agreement between the spouses, the payments cannot be considered part of the veteran's income, since those payments represent a disbursement to the former spouse of his or her own property. VAOPGCPREC 25-97 (July 16, 1997). The evidence shows that the Veteran and his former spouse clearly intended to divest him of all property interest in 50 percent of his CSRS benefits. According to a 1987 marital settlement agreement, the Veteran and his former spouse agreed that "one-half of [the Veteran's CSRS] benefit shall be paid to [his former spouse] as her sole and separate property." (emphasis added). It subsequently became necessary to obtain a court order specifically determining the parties' interest in these benefits; thus, in 2001, a New Mexico state court issued an "Order Dividing Employee Self-Only Annuity," noting that the retirement benefits were considered community property, and awarding 50 percent of the benefits to the Veteran's former spouse as a "Self-Only Annuity." There is no indication in the record that the payments to the Veteran's former spouse represent the satisfaction of a legal obligation. To the contrary, the evidence clearly shows that the Veteran and his former spouse agreed that she should be paid 50 percent of his retirement annuity "as her sole and separate property." These intentions were memorialized in the 2001 court order, determining that each party should have a 50 percent interest in the Veteran's CSRS benefits. Thus, the payments made to the Veteran's first wife must not be considered in calculating his countable income. However, the Veteran has remarried since his 1987 divorce. According to various financial status reports and eligibility verification reports (EVRs), his current spouse is employed as a substitute teacher and has her own income. A veteran's "annual income" includes his annual income and the annual income of his dependent spouse. 38 U.S.C.A. §1522(a); 38 C.F.R. § 3.23(d)(4). In February 2010, the Veteran stated that he and his current wife have been separated since 2006, that they do not live together, and that her income had not been available to him since July 2006. However, 38 U.S.C.A. § 1522(h)(1) states that in determining a veteran's annual income, he or she will "be considered to be living with a spouse, even though they reside apart, unless they are estranged." (emphasis added); see also 38 C.F.R. § 3.23, 3.60. There is no indication that the Veteran and his wife are estranged; in fact, she is listed as his attendant on his claim for aid and attendance benefits, and the Veteran stated during his November 2009 aid and attendance examination that she came to his house early in the morning and attended to his needs. There is no evidence that the Veteran and his wife ever obtained a divorce or have become estranged since that time. In the State of New Mexico, where the Veteran and his current wife reside, "property acquired by either or both spouses during marriage which is not separate property" is presumed to be community property. N.M. Stat. Ann. § 40-3-8(B). Separate property includes property acquired before a marriage or after the dissolution of a marriage, property that is the subject of a court order determining the interests of each party, property designated as separate by written agreement of the parties, or property otherwise designated as separate property by court order. N.M. Stat. Ann. § 40-3-8(A). Remand is required so that the Veteran's property interest in his wife's income can be determined. Accordingly, the case is REMANDED for the following action: 1. Gather all available evidence as to the Veteran's property rights in his wife's income since October 1, 2009, including any separation agreements, property division agreements, or other court orders determining the rights of the parties as to his wife's income. If the Veteran and his wife are estranged, the Veteran must indicate the approximate date upon which they became estranged and provide supporting evidence of the estrangement. After all available documentation has been received, the Pension Management Center must issue a formal finding as to whether the annual income of the Veteran's spouse since October 1, 2009, is community property pursuant to New Mexico domestic relations law, and whether it is countable income for the purposes of determining eligibility to VA nonservice-connected benefits. 2. Review the claims file to ensure that all of the foregoing development is completed, and arrange for any additional development indicated. Then readjudicate the claim on appeal. If the benefit sought remains denied, issue an appropriate supplemental statement of the case and provide the Veteran and his representative the requisite period of time to respond. The case is to then be returned to the Board for further appellate review. The appellant has the right to submit additional evidence and argument on the matter the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999). This case must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board or by the Court for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West Supp. 2012). _________________________________________________ RONALD W. SCHOLZ Veterans Law Judge, Board of Veterans' Appeals Under 38 U.S.C.A. § 7252 (West 2002), only a decision of the Board is appealable to the Court. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (2012).