Citation Nr: 1312699 Decision Date: 04/17/13 Archive Date: 05/02/13 DOCKET NO. 12-24 404 ) DATE ) ) On appeal from the Department of Veterans Affairs Pension Center in Milwaukee, Wisconsin THE ISSUES 1. Entitlement to non-service-connected death pension benefits from January 1, 2009. 2. Entitlement to non-service-connected death pension benefits from September 1, 2010. REPRESENTATION Appellant represented by: Sean P. Cox, Attorney at Law ATTORNEY FOR THE BOARD C. Lawson, Counsel INTRODUCTION The Veteran served on active duty from June 1944 to January 1946. He died in 1987. The appellant is his surviving spouse. This matter comes to the Board of Veterans' Appeals (Board) on appeal from a November 2009 rating decision by a Regional Office (RO) of the Department of Veterans Affairs (VA). A notice of disagreement was received in August 2010, a statement of the case was issued in November 2011, and a substantive appeal was received in December 2011. 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). FINDINGS OF FACT 1. From January 1, 2009, it was reasonable that some part of the corpus of the appellant's estate be consumed for her maintenance. 2. From September 1, 2010, the appellant's countable income exceeds the allowable VA income limit for entitlement to death pension benefits. CONCLUSION OF LAW The criteria for an award of VA death pension benefits from January 1, 2009, or from September 1, 2010, have not been met. 38 U.S.C.A. §§ 1503, 5103A (West 2002); 38 C.F.R. §§ 3.2, 3.3, 3.23, 3.271, 3.272, 3.274 (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veterans Claims Assistance Act of 2000 (VCAA) describes VA's 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. 2012); 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 representative of any information, and any medical or lay evidence, that is necessary to substantiate the claim. 38 U.S.C.A. § 5103(a) (West 2002 & Supp. 2012); 38 C.F.R. § 3.159(b) (2012); Quartuccio v. Principi, 16 Vet. App. 183 (2002). Proper VCAA notice 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(b)(1). VCAA notice should be provided to a claimant before the initial unfavorable RO decision on a claim. See Pelegrini v. Principi, 18 Vet. App. 112 (2004); Mayfield v. Nicholson, 19 Vet. App. 103 (2005), rev'd on other grounds, 444 F. 3d 1328 (Fed.Cir. 2006). When the law and not the evidence is dispositive of the claim, the VCAA is not applicable. See Mason v. Principi, 16 Vet. App. 129, 132 (2002) (VCAA not applicable to a claim for nonservice-connected pension when the claimant did not serve on active duty during a period of war); Smith (Claudus) v. Gober, 14 Vet. App. 227 (2000) (VCAA did not affect a federal statute that prohibited payment of interest on past due benefits), aff'd, 28 F.3d 1384 (Fed.Cir. 2002). In a June 2008 letter, the appellant was formally provided with notice of the evidence necessary to substantiate the claim, the types of evidence that VA will seek to obtain, and types of evidence that the claimant is expected to provide. This notice was timely, as it was provided prior to the RO's November 2009 adjudication of the claim. See Pelegrini v. Principi, 18 Vet. App. 112 (2004); see Mayfield v. Nicholson, 444 F.3d 1327 (2006). This notice was repeated in August 2011. Additional notice was provided to the appellant in the November 2011 statement of the case. Adequate notice, followed by process, was provided. The Board is satisfied that the RO has complied with all applicable notice requirements of the VCAA and its implementing regulations. Any error of notice was harmless because the appellant has had a meaningful opportunity to participate in the adjudication process and was not prejudiced by any notice deficiency. See Goodwin v. Peake, 22 Vet. App. 128 (2008). VA has also assisted the appellant with the development of evidence by requesting information from her in August 2008, August 2011, September 2011, November 2011, and January 2012. Various pieces of evidence have been received. Further, all relevant facts have been properly developed, and all evidence necessary for equitable resolution of the issues has been obtained. VA has obtained the appellant's relevant financial information and she has declined the opportunity to testify at a Board hearing. Further, the appellant and has not identified any additional evidence VA should seek to obtain on her behalf, nor does the record reasonably identify any such evidence. Thus, all reasonable efforts were made by VA to obtain evidence necessary to substantiate the claim and no further assistance to develop evidence is required. Death pension is a monthly benefit, payable by VA, to a surviving spouse, and/or child(ren), of a Veteran. Specifically, the law provides that the Secretary shall pay to the surviving spouse of each Veteran, who served for ninety (90) days or more during a period of war or who at the time of death was receiving or entitled to receive compensation or retirement pay for a service-connected disability, pension at the rate prescribed by law and reduced by the surviving spouse's annual income. 38 U.S.C.A. §§ 1521(j), 1541(a); 38 C.F.R. §§ 3.3(b)(4), 3.23. Thus, death pension benefits are based on income. Payments of these 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; 38 C.F.R. §§ 3.3, 3.23. 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. See 38 U.S.C.A. § 1503(a); see also 38 C.F.R. § 3.271(a). Social Security benefits, annuities, life pensions, and interest and dividends are not specifically excluded under 38 C.F.R. § 3.272. Such income is therefore included as countable income. VA excludes unreimbursed medical expenses paid by a surviving spouse within the corresponding 12-month annualization period, when the amount(s) (I) has been paid or will be paid by the surviving spouse; (II) has been or will be incurred by a member or constructive member of the surviving spouse's household; and (III) they were or will be in excess of 5 percent of the applicable maximum annual pension rate or rates for the spouse as in effect during the 12 month annualization period in which the medical expense(s) was paid. See 38 C.F.R. § 3.272(g)(2). Medical expenses in excess of five percent of the maximum income rate allowable, which have been paid, may be excluded from an individual's income for the same 12- month period, to the extent they were paid. 38 C.F.R. § 3.272(g)(1)(iii). Pension shall be denied or discontinued when the corpus of the estate of the surviving spouse is such that under all the circumstances, including consideration of the annual income of the surviving spouse, it is reasonable that some part of the corpus of the estate be consumed for the surviving spouse's maintenance. 38 C.F.R. § 2.274(c). The rates of death pension benefits are published in tabular form in Appendix B, Subsection A, of the Veterans Benefits Administration Manual M21-1MR, and are given the same force and effect, as if published in the Code of Federal Regulations. 38 C.F.R. § 3.21. The appellant was awarded aid and attendance death pension benefits in the amount of $998 monthly in August 2008, effective from March 1, 2008. In February 2009, VA received the appellant's improved pension eligibility verification report for a surviving spouse with no children. In it, she reported $155,200 in net worth. This was determined to be excessive for VA purposes. In October 2009, the appellant indicated that she received $1,479 from Social Security monthly, as well as $94 from a private annuity and $100 from a private pension, monthly. She had $496 in estimated interest and dividends. Medical expenses paid were $96.40 monthly for Medicaid, $147 for private medical insurance, and $200 for prescriptions. She reported $4,470 monthly for assisted living at Sunrise of Cascade. However, the latter does not qualify as a medical expense. In November 2009, the RO informed the appellant that it was stopping her benefits effective January 1, 2009, the first of the year after her net worth became excessive. It had been learned that this was after her sale of her home. It found that she had assets of $136,796, no debts, a monthly income of $1,950, and monthly expenses of $6,061. Her net worth was $136,796. It was concluded that her net worth was great enough to provide for her maintenance without pension benefits. It advised her that if a claimant's assets are sufficiently large that the claimant could live off of them for a reasonable period of time, pension payments must be stopped until such time as the net worth is depleted. Financial information provided in September 2009 indicates that the appellant was receiving $1,479 monthly from Social Security, $94 from an annuity, and $100 from a life pension. She had received $496 in dividends from August to September 2009. She had $37,068 in a bank account. In light of the above, it is clear that the termination of pension effective from January 1, 2009 was correct. The appellant had a net worth of $136,796 at that time and as of September 2009, her net worth was at least $37,068. The corpus of her estate was such that, under all of the circumstances, including her annual income, it was clearly reasonable that some part of the corpus of her estate be consumed for her maintenance. The next question to be addressed is whether, effective from September 1, 2010, the appellant is entitled to death pension benefits at the aid and attendance rate. Effective December 1, 2009, under Veterans Benefits Administration Manual M21-1MR, the maximum allowable rate for a surviving spouse without dependent children at the aid and attendance level was $12,681.00. The RO found in its December 2012 supplemental statement of the case (found on Virtual VA, VA's electronic data storage system) that the appellant had the following income and expenses effective from September 1, 2010: $18,906.00 in Annual Social Security + 2,328.00 in Annual Other Retirement Income - 5,922.00 in Medical Expenses + 396.00 5% Medical Deductible Using these figures, the evidence shows that the appellant's net income for VA purposes was $15,708.00 based on the income and expenses shown above. Based on the Board's calculations and assessments, the medical expenses should have been, for VA purposes: Medicare Part B premiums ($96.40 x 12 = $1,156.80), Private Medical Insurance from AARP ($147.00 x 12 = $1,764.00), and prescriptions ($2,400.00). This amounts to $5320 in medical expenses. VA cannot consider the fees the appellant paid to Heather Hills Retirement Village and Care Center as an unreimbursed medical expense for VA purposes. Instead, VA must deny the monthly assisted living fees which the appellant reported paying to Heather Hills Retirement Village and Care Center, a senior retirement community. While in August 2010, she stated that she felt that VA should allow the expenses she paid/pays to her retirement living facility as a medical expense, the December 2012 supplemental statement of the case indicates that VA's Milwaukee Pension Center called the Heather Hills Retirement Village and Care Center on October 17, 2012, at which time a representative from that facility informed VA that Heather Hills does not provide any medical services to the appellant. Accordingly, the services provided by Heather Hills Retirement Village and Care Center cannot be considered as medical expenses for VA purposes. As the appellant's income from September 1, 2010 exceeds the maximum allowable pension rate for her, whether the RO's or the Board's figures are used, entitlement to death pension benefits to her at the aid and attendance rate from September 1, 2010 is not warranted. As the appellant was advised in a December 2012 supplemental statement of the case, in the event she begins to incur expenses for custodial care as defined by VA (and set forth in that supplemental statement of the case), she should notify VA so a determination can be made as to whether such can be excluded from countable income as a medical expense. In light of the financial information currently of record, the preponderance of the evidence is against the claim, there is no doubt to be resolved, and the appeal must be denied. 38 U.S.C.A. § 5107; Gilbert v. Derwinski, 1 Vet. App. 49, 55 (1991). ORDER Entitlement to non-service-connected death pension benefits from January 1, 2009 is not warranted. Entitlement to non-service-connected death pension benefits from September 1, 2010 is not warranted. The appeal is denied. ____________________________________________ ALAN S. PEEVY Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs