Citation Nr: 1307932 Decision Date: 03/11/13 Archive Date: 03/20/13 DOCKET NO. 06-07 359A ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Chicago, Illinois THE ISSUE 1. Entitlement to an effective date earlier than October 1, 2004, for the grant of death pension benefits. 2. Whether termination of death pension benefits, to include for special monthly pension based on a need for aid and attendance, due to the appellant's excessive income, effective October 1, 2005, was proper. ATTORNEY FOR THE BOARD L. A. Rein, Counsel INTRODUCTION The Veteran served on active duty from May 1945 to October 1946. The Veteran died in June 2003. The appellant is the Veteran's surviving spouse. This matter comes to the Board of Veterans' Appeals (Board) on appeal from a January 2004 administrative decision of the Department of Veterans Affairs (VA) Regional Office (RO) in Chicago, Illinois that denied entitlement to death pension benefits on the basis of excessive income. In January 2006, the Board remanded this issue for issuance of a statement of the case pursuant to Manlincon v. West, 12 Vet. App. 238, 240-41 (1999). However, in a May 2005 administrative decision, the RO granted death pension benefits, effective October 1, 2004; but, the benefits were terminated as of October 1, 2005 due to excessive income. In June 2005, the appellant submitted a written notice of disagreement with the effective date assigned, and the termination of benefits. In February 2006, the RO issued a statement of the case to address whether the appellant's income was properly counted. In March 2006, the appellant submitted a timely substantive appeal (via a VA form 9). In a May 2006 rating decision, the RO denied entitlement to an earlier effective date for the grant of death pension benefits and denied entitlement to special monthly pension. In June 2006, the appellant submitted her notice of disagreement. In January 2009, the RO issued a statement of the case addressing the denial of an earlier effective date for the grant of death pension benefits. In January 2009, the appellant submitted a timely substantive appeal (via a VA form 9). Thereafter, in November 2012, the RO issued a supplemental statement of the case finding that no revision was warranted in the decision to deny entitlement to survivor's pension benefits, from the earliest possible date, which would have been November 24, 2003. It was noted that while the May 2005 decision granting death pension benefits was in error, VA was not going to attempt to recoup the benefit already paid to the appellant as the result of VA's mistake. The appeal is REMANDED to the RO via the Appeals Management Center (AMC), in Washington, DC. VA will notify the appellant if further action is required. REMAND Initially, the Board notes that in February 2013, the appellant submitted additional evidence, consisting of an improved pension eligibility verification report (VA form 21-0518-1) and medical expense reports, directly to the Board without a waiver of initial RO consideration. The Board cannot consider additional evidence without first remanding the case to the AOJ for initial consideration or obtaining the appellant's waiver. Disabled American Veterans v. Secretary of Veterans Affairs, 327 F.3d 1339 (Fed. Cir. 2003). In general, the surviving spouse of a Veteran is entitled to receive nonservice-connected death pension benefits if the Veteran had qualifying service and the surviving spouse's meets the net worth requirements of 38 C.F.R. § 3.274 (2012) and has an annual income not in excess of the applicable maximum annual pension rate specified in 38 C.F.R. § 3.23 (2012). 38 U.S.C.A. § 1541(a) (West 2002); 38 C.F.R. § 3.3(b)(4) (2012). Under applicable criteria, payments of improved death 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 (West 2002); 38 C.F.R. §§ 3.3, 3.23 (2012). Payments of any kind, from any source, shall be counted as income during the 12-month annualization period in which received, unless specifically excluded. 38 C.F.R. §§ 3.271, 3.272 (2012). The types of income excluded for VA pension purposes must be deducted in the year in which they occurred. 38 C.F.R. § 3.272. Social Security Administration income is not specifically excluded under 38 C.F.R. § 3.272. However, unreimbursed medical expenses, which were paid within the 12-month annualization period regardless of when incurred, are excluded from annual countable income to the extent that the amount paid exceeds five (5) percent of the maximum annual rate payable. 38 C.F.R. § 3.272(g)(1)(iii). In this case, the Board finds that the record contains insufficient information regarding income levels for a determination as to eligibility for nonservice-connected (NSC) pension. Under the law, the maximum annual rate of improved (nonservice-connected) pension payable to the surviving spouse of Veteran varies according to the number of dependents. 38 U.S.C.A. §§ 1503, 1521; 38 C.F.R. §§ 3.3(a)(3), 3.23, 3.273. The rate of pension payable to an entitled payee is based on the amount of countable income received. Pension is payable at a specified annual maximum rate, which is reduced on a dollar for dollar basis by income on a 12- month annualized basis. 38 U.S.C.A. §§ 1503, 1521; 38 C.F.R. §§ 3.3, 3.23. The maximum annual rate of pension is established by statute every year and is reduced by the appellant's countable annual income. "Annual income" includes the appellant's own annual income, and, where applicable, the annual income of a dependent spouse and, with certain exceptions, the annual income of each child of the appellant's in her custody or to whose support the appellant is reasonably contributing. 38 C.F.R. § 3.23(d)(4). Payments of any kind, from any source, shall be counted as income during the 12-month annualization period in which it was received unless it is specifically excluded by regulation. 38 C.F.R. §§ 3.271, 3.272. The maximum annual rates of improved pension are specified by statute in 38 U.S.C.A. § 1521, as increased from time to time under 38 U.S.C.A. § 5312. Each increase of the maximum annual rates of improved pension under 38 U.S.C.A. § 5312 is published in the "Notices" section of the Federal Register. 38 C.F.R. § 3.23(a). For purposes of calculating pension benefits, total income may be reduced by amounts equal to amounts paid by an appellant for unreimbursed medical expenses, to the extent that such amounts exceed five percent of the maximum annual rate of pension. 38 U.S.C.A. § 1503(a)(8); 38 C.F.R. § 3.272(g). The appellant maintains that the RO incorrectly calculated her total countable income. In this regard, she has submitted a substantial amount of documentation as to expenses incurred that she contends would reduce her income to a level that would entitle her to the payment of death pension benefits since November 2003. Among her contentions is that her monthly spend down required pursuant to her Medicare benefits has not been considered in reducing her income. See January 2009 VA form 9. Based on a review of the record, it is unclear the extent to which the RO has considered the substantial documentation of medical expenses that were unreimbursed. Therefore, the Board finds that an audit should be conducted to determine the total income and allowable exclusions, and the appellant should be provided a copy and explanation of the audit. The claim should then be readjudicated with consideration of the proper regulations and MAPR. Although the Board regrets the additional delay, a remand is necessary to ensure that due process is followed and that there is a complete record upon which to decide the appellant's claim so that she is afforded every possible consideration. See 38 U.S.C.A. § 5103A (West 2002); 38 C.F.R. § 3.159 (2012). Accordingly, the case is REMANDED for the following actions: 1. Thereafter, conduct an audit of the income and exclusions from countable income, to include any income of the appellant. The audit should set out the total income from each source and the specific amount of any exclusions from that total (i.e. the unreimbursed medical expenses considered), and the rationale or regulatory support for all exclusions. The appellant's contentions that if spend-down deductions, medical deductions, and the funeral bill were considered in 2003 then her income would be below the income guidelines must be specifically addressed. The audit should be associated with the claims file. Also, the appellant should be sent a copy of the audit, and a full explanation of the calculations relied upon to determine the countable income. 2. The RO/AMC should then readjudicate each of the issues on appeal, as indicated on the title page of this remand. If the benefits sought on appeal are not granted to the appellant's satisfaction, issue a supplemental statement of the case and provide an appropriate opportunity to respond before the claims file is returned to the Board for further appellate consideration. The appellant has the right to submit additional evidence and argument on the matter or matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999). This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims 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). _________________________________________________ Michael J. Skaltsounis Acting Veterans Law Judge, Board of Veterans' Appeals Under 38 U.S.C.A. § 7252 (West 2002), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Appeals for Veterans Claims. 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).