Citation Nr: 1320186 Decision Date: 06/21/13 Archive Date: 07/02/13 DOCKET NO. 09-10 488 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in St. Louis, Missouri THE ISSUES 1. Entitlement to an effective date prior to June 1, 2007, for the award of VA non-service connected death pension benefits. 2. Entitlement to an amount of VA non-service connected death pension benefits in excess of $37.00 per month as of January 1, 2008. 3. Propriety of the termination of VA non-service connected death pension benefits as of June 1, 2008. REPRESENTATION Appellant represented by: AMVETS ATTORNEY FOR THE BOARD J. D. Deane, Counsel INTRODUCTION The Veteran served on active duty from May 1940 to October 1945, May 1948 to February 1953, and January 1954 to November 1954. The Veteran died in May 2007. The appellant is the Veteran's surviving spouse. This matter comes before the Board of Veterans' Appeals (Board) from a December 2007 decision from the Department of Veterans Affairs (VA) Regional Office (RO) in St. Louis, Missouri, which granted a non-service connected death pension of $52.00 monthly with payment commencing on June 1, 2007, reduced payment to $37.00 monthly on January 1, 2008, and terminated payment on June 1, 2008. The appellant had an informal conference with a Decision Review Officer (DRO) in January 2009, withdrawing her request for a formal hearing at that time. The Board subsequently remanded this matter for further development in November 2010. That development was completed, and the case was returned to the Board for appellate review. The record before the Board consists of the Veteran's paper claims file and an electronic file known as Virtual VA. In addition, the Board separated and recharacterized the issues on appeal as listed on the title page in order to clarify the matters on appeal. 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. The appellant filed her claim for VA non-service connected death pension benefits on July 6, 2007, within one year after the Veteran's death in May 2007. 2. As of June 1, 2007, the appellant's income for calculating entitlement to VA non-service connected death pension benefits consisted of an annual Social Security Administration (SSA) benefits of $15,642.00; her excludable medical and last expenses totaled $8,942.00. 3. As of January 1, 2008, the appellant's income for calculating entitlement to VA non-service connected death pension benefits consisted of an annual SSA benefit of $16,001.00; her excludable medical and last expenses totaled $8,968.00. 4. Effective from June 1, 2008, the appellant's countable income or IVAP (Income for VA Purposes) exceeded the maximum annual pension rate (MAPR) limit set by law for payment of VA non-service connected death pension benefits for a surviving spouse with no dependents. CONCLUSIONS OF LAW 1. The criteria for an effective date of May 1, 2007, for the award of VA non-service connected death pension benefits have been met. 38 U.S.C.A. §§ 5103, 5103A, 5110, 5111 (West 2002 & Supp. 2012); 38 C.F.R. §§ 3.20, 3.31, 3.400 (2012). 2. From January 1, 2008, to June 1, 2008, the appellant's IVAP and monthly VA non-service connected death pension benefits were not properly calculated. 38 U.S.C.A. §§ 1503, 1541 (West 2002); 38 C.F.R. §§ 3.3, 3.23, 3.262, 3.271, 3.272, 3.273 (2012). 3. Termination of the appellant's VA non-service connected death pension benefits effective June 1, 2008, was proper. 38 U.S.C.A. §§ 1503, 1541 (West 2002 & Supp. 2012); 38 C.F.R. §§ 3.3, 3.23, 3.271, 3.272, 3.273, 3.660 (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS Duties to Notify and Assist Upon receipt of a substantially complete application for benefits, VA must notify the claimant what information or evidence is needed in order to substantiate the claim and it must assist the claimant by making reasonable efforts to get the evidence needed. 38 U.S.C.A. §§ 5103(a), 5103A; 38 C.F.R. § 3.159(b); see Quartuccio v. Principi, 16 Vet. App. 183, 187 (2002). The notice required must be provided to the claimant before the initial unfavorable decision on a claim for VA benefits, and it must (1) inform the claimant about the information and evidence not of record that is necessary to substantiate the claim; (2) inform the claimant about the information and evidence that VA will seek to provide; and (3) inform the claimant about the information and evidence the claimant is expected to provide. 38 U.S.C.A. §§ 5103(a); 38 C.F.R. § 3.159(b)(1); Pelegrini v. Principi, 18 Vet. App. 112, 120 (2004). The notice requirements of 38 U.S.C.A. § 5103(a) and 38 C.F.R. § 3.159(b) apply to all five elements of a service connection claim. Those five elements include: 1) veteran status; 2) existence of a disability; 3) a connection between the veteran's service and the disability; 4) degree of disability; and 5) effective date of the disability. Dingess/Hartman v. Nicholson, 19 Vet. App. 473 (2006). Upon receipt of an application for a service-connection claim, 38 U.S.C.A. § 5103(a) and 38 C.F.R. § 3.159(b) require VA to review the information and the evidence presented with the claim and to provide the claimant with notice of what information and evidence not previously provided, if any, will assist in substantiating or is necessary to substantiate the elements of the claim as reasonably contemplated by the application. Additionally, this notice must include notice that a disability rating and an effective date for the award of benefits will be assigned if service connection is awarded. In September 2007, the appellant was provided with a notice letter that explained how to substantiate her claim for VA non-service connected death pension benefits. The letter addressed all of the notice elements and was sent prior to the initial decision by the RO in December 2007. The duty to assist was also met in this case. All necessary financial information pertaining to the claim for death pension benefits was associated with the claims file and was reviewed by both the RO and the Board in connection with the claim. VA has also assisted the appellant and her representative throughout the course of this appeal by providing them with March 2009 statement of the case (SOC) and November 2012 supplemental statement of the case (SSOC), which informed them of the laws and regulations relevant to her claims. For these reasons, the Board concludes that VA has fulfilled the duty to assist the appellant in this case. Laws and Regulations Death pension benefits are generally available for surviving spouses as a result of the veteran's nonservice-connected death. 38 U.S.C.A. § 1541(a). A higher rate of death pension is available for a surviving spouse who is in need of regular aid and attendance. 38 U.S.C.A. § 1541(d)(1); 38 C.F.R. § 3.23(d)(2). An appellant is entitled to such benefits if the veteran served for 90 days or more, part of which was during a period of war; or, if the veteran served during a period of war and was discharged from service due to a service-connected disability or had a disability determined to be service-connected, which would have justified a discharge for disability; and, if the claimant meets specific income and net worth requirements. 38 U.S.C.A. § 1541; 38 C.F.R. § 3.3(b)(4). The Board notes that income eligibility for pension, and the amount of any pension payable, is determined by subtracting the surviving spouse's annual countable family income from the maximum annual pension rate (MAPR) applicable to the surviving spouse's circumstances. In determining the surviving spouse's annual countable family income or IVAP, payments of any kind from any source shall be counted as income during the twelve-month annualization period in which received, including old age and survivor's insurance and disability insurance under Title II of the Social Security Act which will be considered income as a retirement benefit. 38 U.S.C.A. § 1503(a); 38 C.F.R. § 3.271(a); 38 C.F.R. § 3.262(f) (2012). Unreimbursed medical expenses in excess of five percent of the MAPR may be excluded from an individual's income for the same 12-month annualization period to the extent that the medical expenses were paid. 38 C.F.R. § 3.272(g)(2)(iii) (2012). In order to be excluded from income, these medical expenses must be paid during the time period at issue, regardless of when they were incurred. In addition, they must be out-of-pocket expenses, for which the surviving spouse received no reimbursement, such as through an insurance company. However, medical insurance premiums themselves, as well as the Medicare deduction, may be applied to reduce countable income. Burial expenses paid by a surviving spouse (to the extent such burial expenses are not reimbursed by VA) during the calendar year following that in which death occurred may be deducted from annual income for the 12-month annualization period in which they were paid, or from annual income for any 12-month annualization period which begins during the calendar year of death--whichever is to the appellant's advantage. Otherwise, such expenses are deductible only for the 12-month annualization period in which they were paid. 38 C.F.R. § 3.272(h). The rates of death pension benefits (MAPR) are published in tabular form in appendix B of Veterans Benefits Administration Manual M21-1 (M21-1) and are given the same force and effect as if published in the Code of Federal Regulations. 38 C.F.R. § 3.21. The MAPR for a death pension recipient who is a surviving spouse with no dependents was $7,329, effective December 1, 2006, and $7,498, effective December 1, 2007. 38 C.F.R. § 3.23(a)(5); VA Manual M21-1, Part I, Appendix B. Factual Background and Analysis In her July 2007 claim, the appellant reported that she paid funeral expenses for the Veteran's burial of $8,186.16 in June 2007. She further indicated that the Veteran had never been awarded pension or filed a claim for VA benefits during his lifetime. SSA inquiries of record reflected that the appellant was in receipt of a monthly benefit of $1,303.50 from May 2007 (with a Supplementary Medical Insurance (SMI) premium amount of $93.50) and was in receipt of a monthly benefit of $1,333.40 from December 2007 (with SMI premium amount of $96.40). A June 2007 letter from SSA of record detailed that the appellant would soon receive a retro sum of $87.00, identified as money she was due through May 2007. In the December 2007 decision, the RO noted that the appellant's annual income was $16,000 but after calculating the requisite deductions for medical and funeral expenses of $9,772.16, her income from July 2007 was $15,235.00. The Board remains perplexed as to how that amount was calculated. However, the RO has provided additional clarification as to its calculations in the November 2012 SSOC, as discussed below. In her June 2008 notice of disagreement and March 2009 substantive appeal, the appellant disagreed with the amount of pension she was paid, particularly noting the $37.00 monthly amount she was to receive after the reduction of death pension benefits from $52.00 to $37.00 on January 1, 2008, was not acceptable. In November 2010, the Board remanded this matter for further evidentiary development and clarification from the RO. It was indicated that although the RO's December 2007 award letter noted that the reason for the change in appellant's death pension monthly benefits amount was a "change in income", the RO did not specifically address this issue in the March 2009 SOC. Instead, the RO limited its discussion to the issue of termination of the appellant's death pension benefits as of June 1, 2008. The Board found that it was unclear from the record in this case whether the calculations of the death pension amounts of $52.00 and $37.00 were correct and whether termination of death pension based on excess income in June 2008 was correct, as the Board was uncertain of how the RO calculated the appellant's countable income and what documents the RO derived certain figures from. In addition, the Board highlighted that there appeared to be a discrepancy in the RO's July 2007 decision letter as to the effective date of the appellant's death pension benefits. In a November 2012 SSOC, the RO provided a detailed discussion of how it calculated the appellant's countable income as well as her monthly death pension payment amounts. It indicated that death pension was awarded and benefits were paid from June 1, 2007, to June 1, 2008. It was indicated that the effective date of the appellant's award was June 1, 2007, the first of the month following the month of the Veteran's death. The RO detailed that the initial benefit amount was $52.00 per month based on an IVAP of $6,700.00. To determine the appellant's IVAP, the RO took her annual SSA benefits ($1303.50 x 12 months = $15,642.00) and subtracted allowable medical and last expenses of $8,942.00. The RO considered medical expenses of $1,122.00 (her monthly SSA SMI premium of $93.50 x 12 months) and last expenses of $8,186.00 totaling $9,308.00, minus $366.00 (5 percent of the MAPR amount of $7,329.00 effective that date). The IVAP of $6,700.00 was then subtracted from the MAPR amount of $7,329.00 to arrive at an annual benefits amount of $629.00 with a monthly amount of $52.00. Thereafter, the RO indicated that the appellant's VA death pension benefits were reduced to $37.00 per month, effective January 1, 2008, as there were cost-of-living adjustments in both her SSA benefits and VA death pension benefits effective December 1, 2007. To determine the appellant's IVAP, the RO took her annual SSA benefits ($1333.40 x 12 months = $16,000.80 which the RO rounded down to $16,000.00) and subtracted allowable medical and last expenses of $8,951.00. The RO considered medical expenses of $1,140.00 (averaging the annual SSA SMI premiums of $1,122.00 for 2007 and $1,157.00 for 2008) and last expenses of $8,186.00 totaling $9,326.00, minus $375.00 (5 percent of the MAPR amount of $7,498.00 effective that date). The IVAP of $7,049.00 was then subtracted from the MAPR amount of $7,498.00 to arrive at an annual benefits amount of $449.00 with a monthly amount of $37.00. Finally, the RO indicated that benefits were terminated effective June 1, 2008, because the appellant's IAVP exceeded the statutory limit of $7,498.00 on June 1, 2008. As an initial matter, the Board notes that it finds the initial benefit amount was $52.00 per month was properly calculated by the RO based on the evidence of record. As to the question of adjustment of non-service connected death pension benefits from January 1, 2008, a decrease in the appellant's monthly benefits was warranted but only to $39.00 per month. To determine the appellant's proper IVAP, the Board has taken her annual SSA benefits of $16,001.00 ($1333.40 x 12 months = $16,000.80 which must be rounded up to $16,001.00) and subtracted allowable medical and last expenses of $8,968.00. The Board considered medical expenses of $1,157.00 (her monthly SSA SMI premium of $96.40 x 12 months = $1,156.80 instead of averaging 2007 and 2008 premiums) and last expenses of $8,186.16 totaling $9,343.16, minus $375.00 (5 percent of the MAPR amount of $7,498.00 effective that date). The IVAP of $7,033.00 was then subtracted from the applicable MAPR amount of $7,498.00 to arrive at an annual benefits amount of $465.00 with a monthly amount of $38.75 or $39.00 instead of the monthly amount of $37.00 as improperly calculated by the RO. Based on the foregoing discussion, the Board has determined that the RO made an error in computing the appellant's IVAP and monthly VA death pension benefits from January 1, 2008, to June 1, 2008. While nominal, the adjustment of the appellant's non-service connected death pension benefits, effective January 1, 2008, was not proper and entitlement to an amount of non-service connected death pension benefits in the amount of $39.00 per month from January 1, 2008 to June 1, 2008, is warranted. As to the question of termination of non-service connected death pension benefits from June 1, 2008, the appellant was in receipt of SSA benefits of $1,333.40 per month from December 1, 2007, and $1,410.40 per month from December 1, 2008; resulting in an annual income of at least $ 16,001.00 ($1,333.40 x 12 = $16,000.80). To determine the appellant's IVAP, the Board has taken her annual SSA benefits of $16,001.00 and subtracted allowable medical and last expenses of $782.00. The Board considered medical expenses of $1,157.00 (her monthly SSA SMI premium of $96.40 x 12 months = $1,156.80) minus $375.00 (5 percent of the MAPR amount of $7,498.00 effective that date). Significantly, as of June 1, 2008, the one-time funeral expenses or last expenses could no longer be counted as a deduction for the appellant's income. The result is an IVAP of $15,219.00, well in excess of the applicable MAPR of $7,498.00. Thus, the RO correctly terminated the appellant's VA non-service connected death pension benefits due to excessive income, effective June 1, 2008. Payment of non-service connected death pension requires that the appellant's countable income is less than the annual MAPR rate determined by law. VA is bound by the applicable law and regulations as written. 38 U.S.C.A. § 7104(c). Here, the appellant's countable income was in excess of the applicable pension rate for death pension as of June 1, 2008. As the appellant is not legally entitled to death pension benefits beginning on that date, this part of her claim must be denied as a matter of law. See Sabonis v. Brown, 6 Vet. App. 426, 430 (1994). Finally, the Board is cognizant that was a discrepancy in the RO's December 2007 decision as to the effective date of this benefit. On the first page of the December 2007 decision letter, the RO indicated that the payment start date was June 1, 2007. However, on page 2 of the December 2007 decision letter, the RO indicated that death pension benefits were granted from July 7, 2007. In a November 2012 SSOC, the RO again noted that the effective date of the appellant's award was June 1, 2007, the first of the month following the month of the Veteran's death. As the appellant's claim for VA non-service-connected death pension benefits was received after December 10, 2004, the effective date is the first day of the month in which the Veteran's death occurred if the claim is received within one year after the date of death; otherwise, it is the date of receipt of the claim. 38 C.F.R. § 3.400(c)(3)(i) (2012). The Board further notes that commencement of a period of payment is generally the first day of the calendar month following the month in which the award became effective. 38 C.F.R. § 3.31. However, there is a specific exclusion from this rule regarding a surviving spouse's rate for the month of a veteran's death. 38 C.F.R. § 3.31(c)(1) (with an exceptions to the exclusion 38 C.F.R. § 3.20 when a veteran dies while receiving VA compensation or pension benefits). In this case, the appellant clearly indicated that the Veteran had never filed a claim for VA benefits as well as filed her claim for death pension benefits on July 6, 2007, within one year after the Veteran's death in May 2007. Under the regulations cited above, the Board has determined that the appellant is eligible for VA death pension benefits effective May 1, 2007, instead of June 1, 2007. ORDER An effective date of May 1, 2007, but no earlier, for the award of entitlement to VA non-service connected death pension benefits is granted, subject to the law and regulations governing the payment of monetary benefits. Adjustment of the appellant's non-service connected death pension benefits, effective January 1, 2008, was not properly calculated and entitlement to an amount of non-service connected death pension of $39.00 per month from January 1, 2008 to June 1, 2008, is warranted. Termination of non-service connected death pension as of June 1, 2008, was proper. ____________________________________________ KATHLEEN K. GALLAGHER Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs