Citation Nr: 1312161	
Decision Date: 04/12/13    Archive Date: 04/19/13

DOCKET NO.  11-16 932	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Regional Office in St. Paul, Minnesota


THE ISSUE

Whether the denial of improved disability pension benefits from August 2010 through July 2011 was proper based upon income.  


ATTORNEY FOR THE BOARD

K. Marenna, Associate Counsel


INTRODUCTION

The appellant had active service from July 1949 to September 1952.

This matter comes before the Board of Veterans' Appeals (Board) on appeal from an August 2010 rating decision of the Department of Veterans Affairs (VA) Regional Office (RO) Pension Management Center in St. Paul, Minnesota.

Please note this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2012).  38 U.S.C.A. § 7107(a)(2) (West 2002).


FINDING OF FACT

The appellant's countable annual income for VA pension purposes was greater than the established income limit for receipt of payment for nonservice-connected disability pension benefits from August 2010 to July 2011.


CONCLUSION OF LAW

The appellant's countable annual income exceeded the limit for receiving nonservice-connected pension benefits from August 2010 to July 2011.  38 U.S.C.A. §§ 1521, 5107 (West 2002); 38 C.F.R. §§ 3.3(b)(3), 3.23, 3.271, 3.272, 3.273 (2012).


REASONS AND BASES FOR FINDING AND CONCLUSION

The Board has thoroughly reviewed all the evidence in the appellant's claims folder.  Although the Board has an obligation to provide reasons and bases supporting this decision, there is no need to discuss, in detail, each piece of evidence of record.  See Gonzales v. West, 218 F.3d 1378, 1380-81 (Fed. Cir. 2000) (the Board must review the entire record, but does not have to discuss each piece of evidence).  The analysis below focuses on the most salient and relevant evidence and on what this evidence shows, or fails to show, on the claim.  The appellant must not assume that the Board has overlooked pieces of evidence that are not explicitly discussed herein.  See Timberlake v. Gober, 14 Vet. App. 122 (2000) (the law requires only that the Board address its reasons for rejecting evidence favorable to the appellant).

The Board must assess the credibility and weight of all evidence, including the medical evidence, to determine its probative value, accounting for evidence which it finds to be persuasive or unpersuasive, and providing reasons for rejecting any evidence favorable to the claimant.  Equal weight is not accorded to each piece of evidence contained in the record; every item of evidence does not have the same probative value.  When all the evidence is assembled, VA is responsible for determining whether the evidence supports the claim or is in relative equipoise, with the appellant prevailing in either event, or whether a preponderance of the evidence is against a claim, in which case, the claim is denied.  Gilbert v. Derwinski, 1 Vet. App. 49 (1990).

I.  Notice and Assistance

As provided for by the Veterans Claims Assistance Act of 2000 (VCAA), the 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) (2012).

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).  

The VCAA does not affect matters on appeal when the issue is limited to statutory interpretation.  See Mason v. Principi, 16 Vet. App. 129 (2002); Dela Cruz v. Principi, 15 Vet. App. 143 (2001); see also VAOPGCREC 2-2004 (2004) (holding that VCAA notice was not required where evidence could not establish entitlement to the benefit claimed).  The essential facts in this case are not in dispute; the case rests on the interpretation and application of the relevant law.

Nevertheless, the Board has reviewed the claims folder and concludes that the appellant was provided reasonable opportunity to participate in the appeals process.  The letter he received in August 2010 which denied his claim for pension benefits notified him of the evidence necessary to substantiate the claim, what he was expected to provide and what VA would seek to provide.  The appellant was requested to complete an enclosed Medical Expense Report showing his unreimbursed medical expenses for the period from August 2010 to December 2011.  Although this letter was not issued prior to initial adjudication of the claim, this was not prejudicial to him since the claim was readjudicated thereafter in an April 2011 statement of the case.  

As the appellant has the requisite service and meets appropriate age requirements, the question concerning entitlement involves income and medical expenses.  The appellant provided such information in appropriate income forms and VA verified the amount of Civil Service pension.  The RO also requested the appellant to provide more information regarding his medical expenses in the August 2010 decision, the April 2011 statement of the case and a January 2012 letter.  The January 2012 letter provided him with three VA Form 21-8416 to complete for his initial year period.

There is no possibility that any additional notice or development would aid him in substantiating his claim.  38 U.S.C.A. §§ 5103, 5103A (West 2002).  The appellant has been accorded ample opportunity to present evidence and argument in support of his appeal, and further discussion of the VCAA is not required.  See 38 C.F.R. § 3.103 (2012); Bernard v. Brown, 4 Vet. App. 384, 392-94 (1993).

II. Legal Criteria

Disability pension will be paid to a veteran of a period of war who meets statutorily-defined service, net worth, and annual income requirements; and who is permanently and totally disabled from nonservice-connected disability not the result of willful misconduct. 38 U.S.C.A. §§ 1502, 1503, 1521.  Pension is also payable to each veteran of a period of war who is 65 years of age or older and who meets the service requirements of 38 U.S.C.A. § 1521 and under the conditions (other than the permanent and total disability requirement) applicable to pension paid under that section.  38 U.S.C.A. § 1513.  

Basic entitlement to improved pension exists if, among other things, a 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); 38 C.F.R. § 3.3(a)(3) (2012).  The maximum annual pension rate (MAPR) is periodically increased from year to year.  38 C.F.R. § 3.23(a).  The MAPR is published in Appendix B of VA Manual M21-1 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 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 net worth or corpus of the estate of the veteran, the veteran's spouse, and the veteran's children.  38 U.S.C.A. § 1522(a); 38 C.F.R. § 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 except for listed exclusions.  See 38 U.S.C.A. § 1503(a); see also 38 C.F.R. §§ 3.260 , 3.261, 3.262, 3.271(a), 3.272.  Civil Service retirement income is not specifically excluded under 38 C.F.R. § 3.272.  Such income is therefore included as countable income.

III.  Analysis

The appellant is more than 65 years old and had active service of more than 90 days  during a period of war.  Additionally, the August 2010 claim reflects that the appellant has minimal assets and net worth.  Therefore, he meets the requirements for pension benefit as pertaining to his military service, age, and net worth.

The appellant filed a claim for entitlement to nonservice-connected pension in August 2010.  At that time, he reported receiving monthly income of $1,872.00 from the U.S. Civil Service, resulting in an annual income of $22,464.  The MAPR for an appellant with 1 independent is $15,493.00.  See VA Manual M21-1, Appendix B.

The appellant also submitted a list of medical expenses from January through August 2010.  Under 38 C.F.R. § 3.272, medical expenses in excess of five percent of the MAPR which have been paid shall be excluded from countable income for the purpose of determining entitlement to improved pension.  The appellant indicated that he paid a $396.29 Health Insurance premium for Mail Handlers Insurance.  He did not indicate whether the expense was monthly.  He indicated he paid copays of $140 at Walgreens and $16 at the VA Pharmacy.  He did not indicate whether the copays were consistent each month.  He also indicated that he paid $221.00 for Medicare.  

In an October 2010 notice of disagreement, the appellant clarified that his monthly copays totaled $156 for a yearly amount of $1,872.  Thus, he indicated that the copayments were consistent monthly in 2010.  He also stated that the $396.29 Mail Handlers' Insurance premium payment was a regular monthly expense for a total yearly amount of $4,755.48.  In the April 2011 statement of the case, the RO stated that VA does not generally authorize co-payments as a prospective continuing expense because the cost of co-payments generally fluctuates month to month and cannot be reasonably predicted.  The RO noted that the copayments claimed on his application were paid prior to the date of the claim.  In the October 2010 notice of disagreement, the appellant stated that he had monthly copayments of $156 for a total yearly amount of $1,872.00.  Although this would indicate the copayments were consistent for most of 2010, the veteran was provided with three VA Form 21-8416, in January 2012, to complete for his initial year period.  These forms provided him the opportunity to supply information regarding his paid medical expenses during the initial year.  The Veteran did not return any of the forms.  When the Veteran filed his VA Form 9, in June 2011, he listed various expenses that he believed should be considered in calculating his annual countable income, but did not include any copayments.  The Board therefore concludes that the monthly copayments of $156 did not continue during his initial year period and such expenses, for the full year, may not be considered in calculating his annual countable income.  Since he reported that a monthly expense of $156 existed during August, September, and October 2010, a total medical expense of $468 ($156 x 3) will be considered. 

Exclusions from countable income include unreimbursed medical expenses when they are or will be in excess of five percent of the applicable maximum annual pension rate and that have been paid within the 12-month annualization period regardless of when the indebtedness was incurred.  38 C.F.R. § 3.272(g).  A February 2012 report of contact and June 2011 substantive appeal reflect that the appellant's medical premium increased to $523.47 per month in 2011.  

In regard to the $221.00 the appellant claimed he paid for Medicare Part B, a document from the Social Security Administration reflects that a Medicare premium payment of $99.90 was paid by the Civil Service.  The March 2012 supplemental statement of the case reflects that the Civil Service verified that they were paying Medicare premiums on the appellant's behalf.  As the Medicare Part B premium payments were deducted from the Civil Service pension received by the appellant, the pension he receives has already been reduced by the amount of the Medicare Part B premium payments.  Consequently, the Board has not excluded the Medicare Part B premiums listed by the appellant as medical expenses.

As the appellant submitted his claim in August 2010, the annualization period under consideration is August 2010 through July 2011.  In 2010 and 2011, the maximum annual rate of improved pension for a veteran with one dependent was $15,493.00.  See VA Manual M21- 1, Part I, Appendix B; 38 U.S.C.A. § 1521; 38 C.F.R. § 3.23.  Five percent of the MAPR is $774.65.  The appellant's Civil Service retirement income in 2010 and 2011 was $1,872.00 per month or $22,464 for the year.  The appellant's copay for his health insurance premium was $398.29 per month in 2010 and $523.47 per month in 2011.  Thus, the total of the health insurance premiums paid from August 2010 through July 2011 was $5655.74 (($398.29 x 5) + ($523.47 x 7)).  Subtracting $5,655.74 from $22,464, the appellant's adjusted countable income is $16,808.26.  Subtracting $468 (copayments) from $16,808.26, the appellant's adjusted countable income is $16,340.26.  This exceeds the MAPR of $15,493.  Consequently, the Board finds that the appellant was not entitled to nonservice-connected pension benefits from August 2010 through July 2011.

Based on the foregoing, the Board finds that the appellant's annual income exceeded the income limit established by the MAPR for the annualization periods from August 2010 through July 2011.  The appellant is therefore not eligible for payment of nonservice-connected pension for the period from August 2010 to July 2011.


ORDER

Entitlement to payment of nonservice-connected pension benefits is denied from August 2010 through July 2011.



____________________________________________
MILO H. HAWLEY
Veterans Law Judge, Board of Veterans' Appeals



Department of Veterans Affairs