Citation Nr: 1325485 Decision Date: 08/12/13 Archive Date: 09/24/13 DOCKET NO. 09-37 302A ) DATE AUG 12 2013 Received from the Department of Veterans Affairs Regional Office in New Orleans, Louisiana THE ISSUE Entitlement to accrued benefits. REPRESENTATION Appellant represented by: Veterans of Foreign Wars of the United States WITNESS AT HEARING ON APPEAL Appellant ATTORNEY FOR THE BOARD J. Connolly, Counsel INTRODUCTION The Veteran served on active duty from July 1943 to December 1945. The Veteran died in December 2005. The appellant is the Veteran's surviving spouse. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a decision of a Regional Office (RO) of the Department of Veterans Affairs (VA). In May 2011, the Board remanded this case for the appellant to be afforded a Board hearing. The case was transferred to the New Orleans, Louisiana RO. In May 2013, the appellant testified before the undersigned via a video conference from that RO. At that time, the appellant clarified that her appeal was limited to entitlement to accrued benefits. FINDINGS OF FACT 1. The Veteran died in December 2005; prior to his death, he did not have a pending claim for exclusion of unreimbursed medical expenses or associated medical expenses for transportation for the purposes of calculating income for pension purposes. 2. In January 2006, the appellant's claim for accrued benefits was received. 3. In March 2006, the appellant's claim for accrued benefits was denied. -2- 4. The credible and probative evidence establishes that the appellant did not receive notice of the March 2006 denial of accrued benefits. 5. The appellant has timely disagreed with the March 2006 decision; followed by a timely perfection of her appeal. 6. The appellant did not file a claim for exclusion of unreimbursed medical expenses or associated medical expenses for transportation, on an accrued basis, or submit evidence of such expenses, until after the Veteran's death. CONCLUSION OF LAW The criteria for establishing a claim of entitlement to accrued benefits have not been met. 38 U.S.C.A. § 5121(a) (West 2002 & Supp. 2012); 38 C.F.R. § 3.1000 (2012). REASONS AND BASES FOR FINDING AND CONCLUSION Veterans Claims Assistance Act of 2000 (VCAA) There has been a significant change in the law with the enactment of the Veterans Claims Assistance Act of 2000 (VCAA). There are some claims to which VCAA does not apply. Livesay v. Principi, 15 Vet. App. 165, 178 (2001). It has been held not to apply to claims based on allegations that VA decisions were clearly and unmistakably erroneous. Id. It has been held not to apply to claims that turned on statutory interpretation. Smith v. Gober, 14 Vet. App. 227, 231-2 (2000). The United States Court of Appeals for Veterans Claims (Court) has held that the provisions pertaining to VA's duty to notify and to assist do not apply to a claim if resolution of the claim is based on interpretation of the law, rather than -3- consideration of the factual evidence. See Dela Cruz v. Principi, 15 Vet. App. 143, 149(2001). The Court has also held that compliance with the VCAA is not required if additional evidence could not possibly change the outcome of the case. See Valiao v. Principi, 17 Vet. App. 229, 232 (2003). In another class of cases, remand of claims pursuant to VCAA is not required because evidentiary development has been completed. Wensch v. Principi, 15 Vet. App. 362, 368 (2001); Dela Cruz v. Principi, 15 Vet. App. 143 (2001). Although the Court said in Wensch that VCAA did not apply in such cases, it may be more accurate to say that VCAA applied, but that its notice and duty to assist requirements had been satisfied. When it is clear that there is no additional evidentiary development to be accomplished, there is no point in remanding the case. See Soyini v. Derwinski, 1 Vet. App. 540, 546 (1991) (strict adherence to requirements in the law does not dictate an unquestioning, blind adherence in the face of overwhelming evidence in support of the result in a particular case; such adherence would result in unnecessarily imposing additional burdens on VA with no benefit flowing to the veteran). The Board first notes that this issue turns on statutory interpretation. See Smith. Thus, because the law as mandated by statute, and not the evidence, is dispositive of this appeal, the VCAA is not applicable. Mason v. Principi, 16 Vet. App. 129 (2002). As such, no further action is required pursuant to the VCAA. Timely Appeal for Accrued Benefits Section 5121 of title 38, United States Code, provides for payment of certain accrued benefits upon death of a beneficiary. Periodic monetary benefits under laws administered by the Secretary to which an individual was entitled at death under existing ratings or decisions or those based on evidence in the file at date of -4- death and due and unpaid, shall, upon the death of a veteran, be paid to the living person first listed: (A) The Veteran's spouse; (B) The Veteran's children (in equal shares); (C) The Veteran's dependent parents (in equal shares). 38 U.S.C. § 5121(a), 5121(a)(2) (West 2002 and Supp. 2012); 38 C.F.R. § 3.1000(a) (2012). In all other cases, only so much of the accrued benefits may be paid as may be necessary to reimburse the person who bore the expense of last sickness and burial. Id. Applications for accrued benefits must be filed within one year after the date of death. See 38 U.S.C.A. § 5121(c) (West 2002 & Supp, 2012); 38 C.F.R. § 3.1000(c) (2012). The Board notes that Congress amended 38 U.S.C.A. § 5121 to repeal a two-year limit on accrued benefits so that a veteran's survivor may receive the full amount of award for accrued benefits. This change applies only to deaths occurring on or after the date of enactment, December 16, 2003, as is the case here. See Veterans Benefits Act of 2003, Pub. L. No. 108-183, § 104, 117 Stat. 2651 (Dec. 16, 2003), codified at 38 U.S.C. § 5121(a). For a survivor to be entitled to accrued benefits, the Veteran must have had a claim pending at the time of his death or have been entitled to benefits, accrued and unpaid, under an existing rating or decision. Jones v. West, 136 F.3d. 1296, 1299 (Fed. Cir. 1998). The Federal Circuit noted that "a consequence of the derivative nature of the surviving spouse's entitlement to a veteran's accrued benefits claim is that, without the veteran having a claim pending at time of death, the surviving spouse has no claim upon which to derive his or her own application." Id. at 1300. The Veteran died in December 2005. The application for death benefits was received from the appellant, his surviving spouse, the next month in a timely manner. In March 2006, the appellant's claim for accrued benefits was denied. The Board notes that the appellant's claim for death pension was also denied, but she -5- was told that she had until January 1, 2008 to update her income information via an eligibility verification report and a medical expense report. At this juncture, the Board notes that this notice was somewhat confusing because the notice letter included several enclosures, including a VA Form 4107 which told her that she had a year to appeal the decision, but the internal information contained in the substance of the letter, as noted, made reference to January 1, 2008 as the due date for financial information. Financial information was also pertinent to the accrued benefits claim so the notice was unclear. An appeal consists of a timely filed notice of disagreement (0NOD) and, after a Statement of the Case (SOC) has been issued, a timely and properly completed VA Form 9 or correspondence containing the necessary information. 38 C.F.R. § 20.202. When an NOD is not filed within one year, a decision becomes final. 38 U.S.C.A. § 7105(c). The NOD must be filed with the agency of original jurisdiction which issued the notice of the determination being appealed. This must be done to begin the appeal process. 38 C.F.R. §§ 20.200, 20.201, 20.300, 20.302(a). The appellant testified that as of August 2005, she and the Veteran were displaced due to Hurricane Katrina. They moved to Chattanooga, but then returned to the New Orleans area. The Veteran died and the appellant indicated that she then returned to Chattanooga, but had to move five times before settling down. She indicated that the moves were not by choice, but were due to the natural disaster, which also affected VA offices. Due to all of this disruption, she did not have regular mail service. In November 2007, which was outside of the one year period after the March 2006 notice letter but before January 1, 2008 date, the appellant re-contacted VA concerning her claim. She indicated that she was attempting to complete her claim within the two year window that she believed was her time limit (for accrued benefits), and cited to difficulties due to Hurricane Katrina. -6- The Board finds that the appellant's November 2007 correspondence is considered a timely NOD to the denial of her accrued benefits claim due to the combination of the confusing information in the March 2006 notice as well the appellant's statements. Specifically, the appellant was also credible in her testimony regarding the course of her appeal. Combined with the notice problems, this evidence is probative that the appellant made a timely disagreement to the March 2006 denied of accrued benefits. Thus, her claim for accrued benefits was pending. In July 2009, a statement of the case was sent to the appellant and she timely submitted a substantive appeal. See 38 C.F.R. §§ 20.202, 20. 302. The RO has denied the claim for accrued benefits due to the lack of a timely appeal of the March 2006 decision. The RO also determined that the Veteran did not have a claim pending when he died. Accrued Benefits Under 38 U.S.C.A. § 1521, a veteran of a period of war who meets certain service requirements and who is permanently and totally disabled from non-service-connected disability not the result of his own willful misconduct is entitled to receive a needs-based pension, to be adjusted according to the amount of the veteran's annual income. Under 38 U.S.C.A. § 1503(a)(8), annual income for purposes of pension calculation includes payments of any kind and from any source except, inter alia, the amount equal to payments for unreimbursed medical expenses to the extent that they exceed five percent of the maximum annual rate of pension. If a VA pension recipient submits an improved pension eligibility verification report each year within an annual reporting period established by VA, certain unreimbursed medical expenses may be excluded from the annual income reported by the recipient and used by VA to calculate or adjust the amount of pension received. Consequently, a veteran's submission of an EVR may result in a retroactive upward adjustment of pension for the prior year. See 38 U.S.C.A. -7- §§ 1503(a)(8), 1521; 38 C.F.R. § 3.272(g)(1); Conary v. Derwinski, 3 Vet. App. 109 (1992). In the present case, the evidence shows that the Veteran was in receipt of non-service-connected disability pension before he died. The Veteran died in December 2005, before submitting evidence pertaining to unreimbursed medical expenses for 2005. His benefits were last adjusted as of January 1, 2005. The appellant seeks to have the Veteran's benefits retroactively adjusted for the period of the 2005 annual year based on medical expenses and transportation costs associated with medical treatment. Had the Veteran not died in December 2005, he would have been entitled to have his pension benefits adjusted for appropriate expenses including unreimbursed medical expenses incurred in 2005. The question for consideration here is whether the appellant is entitled to exclusion of the claimed medical expenses/associated travel expenses on an "accrued" basis. Thus, she basically asserts that there was a claim pending and/or that the Veteran was entitled to benefits, accrued and unpaid, based on the prior decision awarding pension. At the outset, the Board notes that the Veterans' Benefits Improvement Act of 2008 amended the law to allow a person eligible to receive accrued benefits, alternatively, to substitute for a claimant in a case where the claimant dies while a claim for VA benefits is pending. However, the new provision applies only to those cases involving deaths occurring on or after October 10, 2008. See Veterans' Benefits Improvement Act of 2008, Pub. L. No. 110-389, § 212, 122 Stat. 4145, 4151 (2008) (codified at 38 U.S.C.A. § 5121A (West 2002 & Supp. 2012). Because the Veteran died prior to October 10, 2008, the new provisions are not applicable. Historically, in an August 1993 precedential opinion, the VA General Counsel (GC) held that information contained in an eligibility verification report submitted after a beneficiary's death could not be considered "evidence in the file at the date of -8- death" for purposes of an award of accrued pension benefits under 38 U.S.C.A. § 5121(a). However, the GC also stated that certain prima facie evidence of record prior to death (i.e., past eligibility verification reports) could establish entitlement to accrued benefits where confirming evidence (e.g., an eligibility verification report submitted after the Veteran's death) was furnished in support of the accrued benefits claim. See VAOPGCPREC 6-93 (Aug. 1993). In May 1994, the GC further clarified its August 1993 opinion. It held, in part, that where a veteran had in the past supplied evidence of unreimbursed medical expenses that, due to the static or ongoing nature of his or her medical condition, could be expected to be incurred in like manner in succeeding years in amounts that, based on past experience, were capable of estimation with a reasonable degree of accuracy, such evidence may form the basis for a determination that evidence in the file at the date of the Veteran's death permitted prospective estimation of medical expenses. See VAOPGCPREC 12-94 (May 1994). See also Castellano v. Shinseki, 25 Vet. App. 146 (2011), Hayes v. Brown, 4 Vet. App. 353 (1993), and Conary, supra (each noting that, under prior law, evidence not in VA's possession at the time of death could nevertheless be deemed "evidence in the file at [the] date of death" for purposes of adjudicating an accrued benefits claim). However, in October 2002 (and effective from November 27, 2002), VA promulgated a regulation specifically limiting the evidence that could be deemed in the file at the date of death. See Evidence for Accrued Benefits, 67 Fed. Reg. 65,707 (Oct. 28, 2002). Under that regulation, and as is pertinent to the present appeal, "evidence in the file at date of death" is now defined as "evidence in VA's possession on or before the date of the beneficiary's death, even if such evidence was not physically located in the VA claims folder on or before the date of death. See 38 C.F.R. § 3.1000(d)(4) (2012). The 2002 amendments deleted provisions from former VA Adjudication Procedures Manual M21-1, to the effect that certain classes of evidence not in the file on the -9- date of death could be considered to permit an award of accrued benefits based on inferences or prospective estimation drawn from information in the file on the date of death. See Accrued Benefits, 67 Fed. Reg. 9638, 9640 (March 4, 2002). Further, the amendments clarified what constitutes "evidence necessary to complete the application" under 38 U.S.C.A. § 5121(c) to mean information necessary to establish that the accrued benefits claimant is within the category of persons eligible for accrued benefits, and that circumstances exist which make the claimant the specific person entitled to payment of all or any part of the benefits which may have accrued. In an August 2006 memorandum, the VA GC withdrew those portions of VAOPCGCPREC 6-93 holding that certain prima facie evidence of record prior to death could establish entitlement to accrued benefits where confirming evidence was furnished in support of the accrued benefits claim, and withdrew VAOPGCPREC 12-94 in its entirety. The GC explained that, in promulgating the 2002 amendments, outlined above, VA had changed its interpretation of the law as stated in those opinions, and that an award of accrued benefits could no longer be based on logical inferences or estimation from information in the file at the time of the beneficiary's death. In this case, the appellant submitted financial information with regard to the claimed medical expenses/associated transportation expenses after the Veteran's death. When the Veteran died, he did not have a claim for exclusion of unreimbursed medical expenses/associated expenses pending. See, e.g., Jones v. West, 136 F.3d. 1296, 1299 (Fed. Cir. 1998), cert, denied, 525 U.S. 834 (1998) (a surviving spouse's claim for accrued benefits is premised on claims that were pending at the time of the Veteran's death); 38 C.F.R. § 3.160(c) (2012) (defining a "[p]ending claim" as "[a]n application, formal or informal, which has not been finally adjudicated."). Nor does the record in any way suggest that any evidence pertaining to the claimed unreimbursed medical expenses/associated expenses here at issue was in VA's possession on or before the date of the Veteran's death. - 10- There was no claim pending for unreimbursed medical expenses/associated travel expenses until after the Veteran's death in December 2005. The Board fully recognizes that Hurricane Katrina occurred in August 2005. However, the Veteran, and his appellant as his payee, had previously submitted eligibility verification reports. However, none were submitted in the window prior to the natural disaster and after the last adjustment of pension benefits. Also, there was simply no contact in that regard that can be construed as a claim. As such, the claim must be denied as a matter of law. See Sabonis v. Brown, 6 Vet. App. 426, 430 (1994). ORDER Entitlement to accrued benefits is denied. K. PARAKKAL Veterans Law Judge, Board of Veterans' Appeals - 11-