Citation Nr: 1324705 Decision Date: 08/02/13 Archive Date: 08/13/13 DOCKET NO. 09-15 203 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Houston, Texas THE ISSUE Whether the Veteran is eligible for non-service-connected pension benefits from July 1, 2006, that were terminated due to excessive income. REPRESENTATION Appellant represented by: Texas Veterans Commission ATTORNEY FOR THE BOARD D.J. Drucker, Counsel INTRODUCTION The Veteran had active military service from February 1969 to December 1970. This matter initially came to the Board of Veterans' Appeals (Board) on appeal from a November 2007 determination of the Department of Veterans Affairs (VA) Pension Maintenance Center (PMC) in St. Paul, Minnesota, that terminated the Veteran's non-service-connected (NSC) pension benefits, effective July 1, 2006, due to his countable household income exceeding the annual maximum allowable income. In May 2012, the Veteran was scheduled to testify during a hearing at the VA Office in San Antonio, Texas, before a Veterans Law Judge ("Board hearing") in response to his request on his April 2009 substantive appeal. He was notified in writing of the scheduled hearing and, in an April 2012 signed statement, acknowledged receipt of the notice but said that he did not understand what the letter referenced. He failed to appear for the scheduled hearing and did not request that it be rescheduled. The Board finds that the hearing request is thus deemed withdrawn. 38 C.F.R. § 20.704 (2012). FINDINGS OF FACT 1. In a May 2006 rating decision, the VA Regional Office (RO) in Houston, Texas, granted NSC pension benefits to the Veteran, effective February 2, 2006. 2. The Veteran's improved pension benefits were terminated effective July 1, 2006, due to excessive income. 3. Based on the evidence of record, the Veteran's countable annual income for VA purposes is in excess of the established income limit. 4. There is no evidence that the Veteran's medical expenses exceed five percent of the maximum allowable pension rate. CONCLUSION OF LAW The Veteran's countable income is excessive for receipt of non-service-connected pension benefits. 38 U.S.C.A. § 1521 (West 2002); 38 C.F.R. §§ 3.23, 3.271, 3.272, 3.660 (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. Duty to Notify and Assist As provided for by the Veterans Claims Assistance Act (VCAA), 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 and 3.326(a) (2012). As the resolution of the Veteran's appeal is dependent on the United States Court of Appeals for Veterans Claims' (court's) interpretation of the law and regulations pertaining to claims for VA benefits, no further development under the VCAA or previously existing law is warranted. Mason v. Principi, 16 Vet. App. 129, 132 (2002); see generally Dela Cruz v. Principi, 15 Vet. App. 143 (2001); Smith v. Gober, 14 Vet. App. 227, 231-32 (2000); see also Livesay v. Principi, 15 Vet. App. 165 (2001) (en banc) (holding that the VCAA is not applicable where it could not affect a pending matter and could have no application as a matter of law); see also VAOPGCPREC 2-04; 69 Fed. Reg. 25180 (2004). In any event, in the November 2007 letter notifying the Veteran of the termination of his pension benefits, he was told what evidence was needed to reinstate such benefits -that is, evidence that his income had fallen below the limit specified in that letter. Then, the March 2009 statement of the case (SOC) provided the relevant regulations to the Veteran concerning his income and informed him how his annual income was counted. Additionally, the letter and SOC clearly notified him about claiming dependents as well as informed him that medical expenses may help to reduce his annual countable income. Thus, it appears that, at all times, the Veteran was aware of why his pension benefits were terminated (excessive income) and what he would have to show to get the benefits reinstated (income below the specified limit). Moreover, in July 2012, the Board remanded the Veteran's case to the RO specifically for the purpose of affording him the opportunity to submit income and expense reports for the years from 2006 to the present. There has been substantial compliance with the Board's remand as, in an August 2012 letter, the RO provided the Veteran with a Medical Expense Report (VA Form 21-8416) and requested that he submit a completed form for his out-of-pocket expenses for the period from July 1, 2006 to December 31, 2006, for the 2007, 2008, 2009, 2010, and 2011 tax years, and from January 1, 2012 to the present. He was further requested to provide income he and his family received or expected to receive from all sources before any deductions from employment on the enclosed Improved Pension Eligibility Verification Report (Veteran With No Children) (VA Form 21-05-16-1) (EVR), for the same periods. The Veteran did not submit the requested completed forms. Therefore, proceeding to an adjudication of the merits of this claim does not prejudice the appellant in the disposition thereof. See Bernard v. Brown, 4 Vet. App. 384, 392-94 (1993). II. Factual Background and Legal Analysis The Board has thoroughly reviewed the record in conjunction with this case that includes written statements from the Veteran. Although there is an obligation to provide reasons and bases supporting this decision, there is no need to discuss, in detail, the extensive evidence submitted by the appellant or on his behalf. 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). Rather, the analysis below will focus specifically on what the evidence shows, or fails to show, on the claim. See Timberlake v. Gober, 14 Vet. App. 122, 129 (2000) (noting that the Board must analyze the credibility and probative value of the evidence, account for the evidence which it finds to be persuasive or unpersuasive, and provide the reasons for its rejection of any material evidence favorable to the claimant). Pension is a benefit payable by VA to a veteran of a period of war who is permanently and totally disabled from non-service-connected disability not the result of his or her willful misconduct. 38 U.S.C.A. § 1521(a); 38 C.F.R. § 3.3(a)(3) (2012); Martin v. Brown, 7 Vet. App. 196, 198 (1994). Basic entitlement exists if, among other things, the Veteran's income is not in excess of the applicable maximum annual pension rate (MAPR) specified in 38 C.F.R. § 3.23 as changed periodically and reported in the Federal Register. See 38 U.S.C.A. § 1521; 38 C.F.R. §§ 3.3(a)(3), 3.23(a), (b), (d)(4). The MAPR is published in Appendix B of VA Manual M21-1 (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 MAPR is revised every December 1st and is applicable for the following 12 month period. The MAPR shall be reduced by the amount of the countable annual income of the Veteran. 38 U.S.C.A. §§ 1503, 1521; 38 C.F.R. §§ 3.3, 3.23. Fractions of dollars will be disregarded in computing annual income. 38 C.F.R. §3.271(h). In determining annual income for 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 during the 12 month annualization period in which received, except for listed exclusions. 38 U.S.C.A. § 1503(a); 38 C.F.R. §§ 3.271(a). Social Security Administration (SSA) income is not specifically excluded under 38 C.F.R. § 3.272. Unreimbursed medical expenses in excess of five percent of the MAPR, that have been paid, may be excluded from an individual's income for the same 12-month annualization period to the extent they were paid. 38 C.F.R. § 3.272(g)(1)(iii). 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 Veteran received no reimbursement, such as through an insurance company. Moreover, medical insurance premiums themselves, as well as the Medicare deduction, may be applied to reduce countable income. For pension benefits, it is the responsibility of the recipient of VA pension benefits to notify VA of all circumstances that will affect entitlement to receive the rate of the benefit being paid. That is, the recipient of VA benefits must notify VA when he or she acquires knowledge that income, marital status, or dependency status will change or other circumstances which would affect his or her entitlement to receive, or the rate of, the benefit being paid. 38 C.F.R. § 3.660(a)(1) (2012). Moreover, where reduction or discontinuance of a running award of improved pension is required because of an increase in income, the reduction or discontinuance shall be made effective the end of the month in which the increase occurred. 38 C.F.R. § 3.660(a)(2). Overpayments created by retroactive discontinuance of benefits will be subject to recovery if not waived. 38 C.F.R. § 3.660(a)(3). In his initial February 2006 claim, the Veteran reported that he was divorced and had no income. Information obtained from the SSA showed that he received disability benefits. In a May 2006 rating decision, the RO granted the Veteran's claim for non-service-connected pension benefits based on permanent and total disability, effective from February 2, 2006. In a May 2006 letter, the RO advised the Veteran that his claim for NSC pension was granted and that he was being paid as a single veteran with no dependents. It was noted that his total family income consisted of his annual SSA income of $8,748.00. He was advised to inform VA if he gained or lost a dependent. In June 2006 correspondence, received by VA on July 10, 2006, the Veteran reported that he got married earlier in June and that his wife's income was $3,000. He also reported that he was currently "working a little." In a January 2007 letter, the PMC requested that the Veteran return a completed Declaration of Status of Dependents (VA Form 21-686c), to provide marital history for him and his spouse. He was also requested to provide information regarding his earned income and that of his wife from February 2, 2006 to December 31, 2006, from January 1, 2007 through February 28, 2007, and from March 1, 2007 through December 31, 2007. In a June 2007 letter, the PMC advised the Veteran that his claim to add his wife as a dependent was denied because he did not submit the requested information. He was further advised that the PMC proposed to terminate his pension effective July 1, 2006 because it received evidence showing that his family income changed as set forth in his June 2006 correspondence. The PMC proposed to count his wife's income of $3,000.00 on July 1, 2006. That increase in income placed the Veteran's income for VA purposes at $11,748.00 that exceeded the maximum allowable income of $10,579.00 for a veteran with no dependents, thus terminating his pension on July 1, 2006. Later in June 2007, the Veteran submitted a partially completed VA Form 21-686c. In a July 2007 written statement, the Veteran reported that his taxable income for 2006 was $17,262.95 of which $5,832.00 was SSA benefits. He further stated that "this year" he made a little over $4,100.00 or $4,300.00. The Veteran indicated that his wife's earning statement for wages worked in 2006 was for just $6,240.00 and she will have paid over $3,000.00 for dental expenses. He noted that his wife was diagnosed with cancer a few years back but he did not know how much she spent on medical appointments. In the November 2007 letter, the PMC advised the Veteran that his pension was terminated, effective from July 1, 2006, as his family income was now over the MAPR to receive a non-service-connected pension. The Veteran was told that VA could not pay for his wife because she was not an established spouse. He did not submit a "complete" record of all marriages, divorces, dates, and locations of these events on the VA Form 686c received in June 2007. The Veteran was informed that the pension income limit for a veteran with no dependents was $10,579.00. His annual SSA income was $8,748.00 and his wife's income was $3000.00. This put his household income for VA purposes at $11,748.00 that exceeded the maximum allowable income for a veteran with no dependents. The RO provided the Veteran with an EVR form and VA Form 21-686c and requested that he return the completed forms. However, in a letter received in November 2007, the Veteran indicated that he telephoned the RO and was advised that he only had to submit the dependency information and not the EVR. Then, in his April 2009 substantive appeal, the Veteran reported that his wife had cancer and was no longer working. As noted above, pursuant to the Board's July 2012 remand, in an August 2012 letter, the RO requested that the Veteran complete enclosed Medical Expense Report for his out-of-pocket expenses, and EVR form, for the period from July 1, 2006 to December 31, 2006, for the 2007, 2008, 2009, 2010, 2011 tax years, and from January 1, 2012 to the present. He did not respond to the RO's letter or submit the requested completed forms. As noted, one prerequisite to entitlement to improved pension benefits is that the Veteran's income not exceed the applicable maximum pension rate specified in 38 C.F.R. § 3.23. 38 U.S.C.A. § 1521(a),(b); 38 C.F.R. § 3.3(a). Pension benefits are paid at the maximum annual rate reduced by the amount of annual income received by the Veteran. 38 U.S.C.A. § 1521(b); 38 C.F.R. §§ 3.3(a)(3)(vi) , 3.23(a), (b), (d)(4). In determining eligibility for improved pension, payments of any kind from any source shall be counted as income during the 12-month annualization period in which received unless specifically excluded under the provisions of 38 C.F.R. § 3.272. 38 C.F.R. § 3.271(a). Neither SSA benefits nor Civil Service retirement benefits are excludable items under 38 C.F.R. § 3.272 and are therefore countable income. The MAPR is published in Appendix B of VA's Manual M21-1 (M21-1) and is to be given the same force and effect as published in VA regulations. 38 C.F.R. § 3.21 (2012). The income limit for non-service-connected pension for a veteran with no dependents effective as of December 1, 2005, was $10,579.00. See M21-1, Part I, Appendix B. Effective December 1, 2006, the income limit applicable to this case was $10,929.00. See M21-1, Part I, Appendix B. A veteran's "annual income" includes his annual income and the annual income of his dependent spouse. 38 U.S.C.A. § 1522(a); 38 C.F.R. § 3.23(d)(4). Using the income figures available for the Veteran in 2006, the annual income for him and his spouse well exceeded the MAPR - by more than $1,100. As the Veteran's income exceeded the maximum allowable, denial of pension benefits was required by law. 38 C.F.R. § 3.660. When a running award of improved pension is discontinued because of an increase in income, such as occurred in this case due to the Veteran's marriage, then the discontinuance should be effective the end of the month in which the increase occurred. 38 C.F.R. § 3.660(a)(2). In this case, in his June 2006 statement, the Veteran advised VA that he got married that month, so discontinuance of his pension as of July 1, 2006, was proper. The Veteran has submitted no financial information since July 2007 showing that his annual income is now below the maximum limit. His claim for reinstatement of his pension benefits lacks legal entitlement under the applicable laws and regulation. In a case where the law is dispositive of the claim, the claim should be denied because of lack of entitlement under the law. Sabonis v. Brown, 6 Vet. App. 426, 430 (1997). Accordingly, the appellant's claim is denied. The Board is empathetic to the Veteran's circumstance and its attendant difficulties, but is unable to grant the requested pension benefits at this time. The Veteran is advised that should his income change in the future, or should he incur significant out-of-pocket medical expenses, he is encouraged to submit another application to the RO for consideration of non-service-connected pension benefits. (CONTINUED ON NEXT PAGE) ORDER Eligibility for non-service-connected pension benefits from July 1, 2006, terminated due to excessive income, is denied. ____________________________________________ ERIC S. LEBOFF Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs