Citation Nr: 1321948 Decision Date: 07/09/13 Archive Date: 07/18/13 DOCKET NO. 13-04 577 ) DATE ) ) On appeal from the Department of Veterans Affairs (VA) Regional Office (RO) in Muskogee, Oklahoma THE ISSUE Entitlement to death pension benefits. (The issues of entitlement to service connection for the cause of the Veteran's death, and for accrued benefits are the subject of a separate decision of the Board.) REPRESENTATION Appellant represented by: Disabled American Veterans ATTORNEY FOR THE BOARD Mary C. Suffoletta, Counsel INTRODUCTION The Veteran served on active duty from November 1950 to November 1953. He died in March 2012. The appellant is the Veteran's widow. This matter comes to the Board of Veterans' Appeals (Board) on appeal from a July 2012 decision of VA's Regional Office and Pension Management Center in St. Paul, Minnesota, which denied the appellant's claim for death pension benefits. The appellant timely appealed. In November 2012, the case was transferred to the RO in Muskogee, Oklahoma. In addition to reviewing the appellant's paper claims file, the Board has surveyed the contents of her Virtual VA file. 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 family income for a surviving spouse with no dependents, minus unreimbursed burial expenses and unreimbursed medical expenses, exceeds the maximum annual pension rate (MAPR) for death pension benefits beginning March 1, 2012. CONCLUSION OF LAW The criteria for entitlement to death pension benefits beginning March 1, 2012, are not met. 38 U.S.C.A. §§ 1503, 1541 (West 2002 & Supp. 2012); 38 C.F.R. §§ 3.3(b)(4), 3.21, 3.23, 3.271, 3.272, 3.273 (2012). REASONS AND BASES FOR FINDING AND CONCLUSION I. Duties to Notify and Assist 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. 2012); 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a) (2012). VA should notify the claimant of: (1) the evidence that is needed to substantiate the claim(s); (2) the evidence, if any, to be obtained by VA; and (3) the evidence, if any, to be provided by the claimant. Pelegrini v. Principi, 18 Vet. App. 112 (2004); see also Notice and Assistance Requirements and Technical Correction, 73 Fed. Reg. 23,353 (Apr. 30, 2008) (codified at 38 C.F.R. Part 3). Through a June 2012 letter, the RO notified the appellant of elements for death pension benefits, and the evidence needed to establish each element. This document served to provide notice of the information and evidence needed to substantiate the claim. VA's letter notified the appellant of what evidence she was responsible for obtaining, and what evidence VA would undertake to obtain. 38 U.S.C.A. § 5103(a); 38 C.F.R. § 3.159(b). VA informed her that it would make reasonable efforts to help her get evidence necessary to support her claim, particularly, if she gave VA enough information about such records so that VA could request them from the person or agency that had them. The appellant was not provided with notice of the type of evidence necessary to establish a disability rating or to assign an effective date for any disability on appeal. See Bernard v. Brown, 4 Vet. App. 384, 394 (1993) (where the Board addresses a question that has not been addressed by the agency of original jurisdiction, the Board must consider whether the appellant has been prejudiced thereby). This is not prejudicial to the appellant as death pension benefits are not granted herein. There is no indication that any additional action is needed to comply with the duty to assist the appellant. The RO has obtained copies of the Veteran's service treatment records, VA treatment records, his private treatment records, and a certificate of death. The appellant has also provided income, medical expenses, and last (burial) expenses data for the year 2012. The appellant has not identified, and the record does not otherwise indicate, any existing pertinent evidence that has not been obtained. Given these facts, it appears that all available records have been obtained. There is no further assistance that would be reasonably likely to assist the appellant in substantiating the claim. 38 U.S.C.A. § 5103A(a)(2). II. Death Pension Benefits Pension is a monthly or other periodic payment made by VA to a Veteran because of service, age, or nonservice-connected disability, or to a surviving spouse or child of a Veteran of a period of war because of the nonservice-connected death of the Veteran. See 38 U.S.C.A. §§ 1521, 1541 (West 2002 & Supp. 2012). The amount of pension actually received is the difference between the recipient's countable income and the maximum annual rate permitted by VA given the recipient's circumstances. Pension is not payable if the recipient's countable annual income exceeds the maximum limitation given the recipient's circumstances as set forth in the legislation. See generally 38 U.S.C.A. §§ 101, 1501 et seq. 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 applicable to the surviving spouse's circumstances. The maximum annual pension rate (MAPR) is adjusted from year to year. Effective December 1, 2011, the MAPR for a surviving spouse without dependent child was $8,219. See 38 C.F.R. § 3.23(a)(5); M21-1, Part I, Appendix B; see also www.vba.va.gov/bln/21/rates/pen02.htm. The MAPR is revised every December 1st and is applicable for the following 12-month period. For awards of nonservice-connected death pension benefits based on claims received on or 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) (2012). In determining the surviving spouse's annual countable family income, payments of any kind from any source shall be counted as income during the twelve-month annualization period in which received, unless specifically excluded. See 38 U.S.C.A. § 501; 38 C.F.R. §§ 3.271, 3.272(a). Recurring income means income which is received or anticipated in equal amounts and at regular intervals (e.g., weekly, monthly, quarterly, etc.) and which will continue throughout an entire 12-month annualization period. The amount of recurring income for pension purposes will be the amount received or anticipated during a 12-month annualization period. See 38 C.F.R. § 3.271(a)(1) (2012). Whenever there is a change in the maximum annual pension rate, or in the surviving spouse's family income, the monthly rate of pension payable shall be adjusted effective the date of change. See 38 U.S.C.A. § 501; 38 C.F.R. § 3.273. 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. See 38 C.F.R. § 3.272(g)(2)(iii) (2012). 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 claimant'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 Veteran died in March 2012; the appellant filed a claim for VA death pension benefits in May 2012. Because a claim was filed within one year of the Veteran's death, the appellant is potentially eligible for death pension benefits effective March 1, 2012. The question in this case is whether the appellant's annual income from March 1, 2012, exceeded the statutory limits. The Board must make its decision on a year-by-year basis pursuant to statute. Income is counted during the 12-month annualization period in which it is received. 38 C.F.R. § 3.271(a). For the purpose of determining initial entitlement, or for resuming payments on an award which was previously discontinued, the monthly rate of pension shall be computed by reducing the applicable maximum pension rate by the countable income on the effective date of entitlement and dividing the remainder by twelve. 38 C.F.R. § 3.273(a). In essence, the Board subtracts the total amount of countable income in one year, less excluded income, from the MAPR for that year; then, if a positive amount remains, the rest is divided by twelve to determine the monthly death pension benefit. When a change in the MAPR occurs, the Board repeats the calculation with the new MAPR as the starting amount. 38 C.F.R. § 3.273(b)(1). When a change in income occurs, the MAPR will be reduced by the new annualized income effective on the date that the increased income began. 38 C.F.R. § 3.273(b)(2). Effective December 1, 2012, the MAPR income limit increased. The Board will consider both the December 1, 2011 and December 1, 2012 MAPRs in determining the appellant's entitlement to death pension. In this case, the appellant has indicated that her only income for herself is Social Security benefits and retirement pensions. That notwithstanding, for any 12-month annualization period starting on March 1, 2012, it has been determined that the appellant's income exceeds of the maximum allowable income for a surviving spouse without dependent child. Specifically, for the month of March 2012, with regard to income, the surviving spouse received Social Security income benefits in the amount of $1527.90. See December 2011 electronic SSA report. For purposes of determining initial entitlement, had she continued to receive the same Social Security income benefits for a 12-month annualization period from March 2012, her annual Social Security income would have been $18,334.80 ($1527.90 x 12 months). Moreover, for the month of March 2012, the surviving spouse received retirement pensions in the amount of $818.00; had she continued to receive the same, her annual income from retirement pensions would have been $9,816.00 ($818.00 x 12 months). Thus, for purposes of determining initial entitlement for a 12-month annualization period from March 2012, her total annual income would have been $28,150.80 ($18,334.80 + $9,816.00). Records reflect that the Social Security Administration paid a burial benefit of $255, which is also included as income. Thus her total income was $28,405.80. Expenses of last illnesses, burials, and just debts may be excluded for purposes of calculating annual countable income to determine eligibility for improved death pension benefits. These expenses specified in 38 C.F.R. § 3.272(h) 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. Otherwise, such expenses are deductible only for the 12-month annualization period in which they were paid. Income from life insurance proceeds is specifically excluded from countable income under 38 C.F.R. § 3.272(x). The total cost of goods and services related to the burial was $8,430.77 (funeral home and cemetery), and was paid by the appellant in full in 2012. Medical expenses in excess of 5 percent of the maximum annual pension rate may be excluded from an individual's annual income for the same 12-month period to the extent they were paid and not reimbursed. 38 C.F.R. § 3.272(g)(2). Here, the appellant reported paying annual amounts of $2,400.00 for Medicare, for herself and her husband. It is noted that the information from SSA shows that her supplementary medical insurance (SMI) premium was $99.90 monthly, which when annualized over a 12-month period is $1,198.80. She also paid $840.00 for supplemental health insurance, and $480.00 for dental insurance-for an annual total of $2,518.80. She also reported paying $1,575 in April 2012 for her own surgery. Together, her unreimbursed medical expenses for the 12-month period total $4,093.80, of which $3683.80 (excess of 5 percent of MAPR in 2011) is deductible from countable income. Thus, the only deductions from countable income are $8,430.77 incurred for funeral expenses, and $3683.80 incurred for unreimbursed medical expenses. As such, for the initial 12-month entitlement period after March 2012, taking the surviving spouse's projected annual income ($28,406), and subtracting from this figure the unreimbursed funeral expenses ($8,430.77) and unreimbursed medical expenses ($3,683.80), yields a final annual countable income of $16,291.23. Therefore, for purposes of determining initial entitlement after March 2012, the surviving spouse's countable income ($16,291.23) clearly exceeds the applicable December 2011 MAPR ($8,219) for death pension benefits. Thus, for this initial projected time period, the appellant is not entitled to VA death pension benefits due to excessive income. For the time period from December 2012, the evidence of record does not reflect any significant changes. Thus, with regard to income, for the period from December 2012, the surviving spouse's yearly income is projected as $28,150.80 ($2,345.90 x 12 months). With regard to expenses, the appellant is allowed to exclude expenses of last illnesses, burials, and just debts from annual income for any 12-month annualization period which begins during the calendar year of the Veteran's death. As such, from December 2012, taking the surviving spouse's projected annual income ($28,151), and subtracting from this figure the unreimbursed funeral expenses ($8430.77), yields an annual countable income of $19,720.23. Again, unreimbursed medical expenses in excess of 5 percent of MAPR in 2012 for the 12-month period also are deductible. While there were no changes reported in amounts of unreimbursed medical expenses, the December 2012 MAPR increased to $8,359; and 5 percent of that amount is $417. Thus, $2101.80 (excess of 5 percent of MAPR in 2012) is deductible from countable income. As such, subtracting unreimbursed medical expenses ($2101.80) yields a final annual countable income of $17,618.43. If the appellant's surgical expenses of $1,575 are considered, the total medical expenses would be $4,093.80 and of this amount only the amount in excess of 5 percent of MAPR, or $3,676.80, is to be deducted from annual income. Consequently, from December 2012, the surviving spouse's projected countable income ($17,618.43 or $16,043.43 if surgical expenses are considered) clearly exceeds the applicable December 2012 MAPR ($8,359) for death pension benefits. Thus, for the period from December 2012, the appellant is not entitled to VA death pension benefits due to excessive income. Extrapolating the surviving spouse's annual and countable income for the 12-month period clearly exceeds the applicable MAPR for death pension benefits. It is also noted that the RO determined the last expenses were $8,678 after deducting the $1,000 in burial benefits that was awarded by the RO. Even if this higher amount is used, the appellant's countable income still exceeds the MAPR effective in March 2012 and beginning in December 2012. The Board is sympathetic to the surviving spouse's claim and her particular circumstances. But the surviving spouse's countable income must be less than the annual death pension rate determined by law. VA is bound by the applicable law and regulations as written. 38 U.S.C.A. § 7104(c). Here, her countable income was in excess of the applicable pension rate for death pension benefits. Therefore, the surviving spouse would not be legally entitled to death pension benefits beginning on March 1, 2012. See Sabonis v. Brown, 6 Vet. App. 426, 430 (1994). ORDER Due to excessive income, entitlement to death pension benefits is denied. ____________________________________________ S. S. TOTH Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs