Citation Nr: 1639281 Decision Date: 09/30/16 Archive Date: 10/13/16 DOCKET NO. 13-19 154 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in St. Louis, Missouri THE ISSUE Entitlement to VA nonservice-connected pension benefits, to include whether the Veteran's income exceeds the maximum annual pension limit. REPRESENTATION Appellant represented by: Richard R. Vouga, Attorney at Law WITNESS AT HEARING ON APPEAL The Veteran's son ATTORNEY FOR THE BOARD C. Bosely, Counsel INTRODUCTION The Veteran had active service from January 1951 to September 1953. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a January 2012 decision of the Department of Veterans Affairs (VA) Regional Office (RO). The Veteran's son testified before the undersigned Veterans Law Judge in a videoconference hearing from the RO in July 2016. It was found that good cause had been presented for allowing the hearing to proceed with the Veteran's son giving testimony without the Veteran himself being present. See 38 C.F.R. § 20.700(b) (2015). The Veteran's representative raised the issue of entitlement to nonservice-connected at the aid and attendance or housebound rate at the Board hearing. He should submit a claim on the standard VA form to pursue such benefits. This appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2015). 38 U.S.C.A. § 7107(a)(2) (West 2014). FINDINGS OF FACT The Veteran and his spouse live in an independent living facility for which they pay room and board, and his treating doctor certified that the Veteran has a medical condition that makes living in such a protected environment necessary. CONCLUSION OF LAW The criteria for the award of basic nonservice-connected pension benefits are met. 38 U.S.C.A. §§ 1521, 1542, 5312 (West 2014); 38 C.F.R. §§ 3.2, 3.3, 3.21, 3.23, 3.271, 3.272, 3.274 (2015). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran in this case is seeking entitlement to VA nonservice-connected pension benefits. The RO denied the claim on the basis that his income exceeded the maximum annual pension limit. The RO reached this determination after finding that the amount of money the Veteran paid for independent retirement living facility services did not qualify as unreimbursed medical expenses. Thus, those expenses could not be considered to reduce his countable income. There is no dispute in this case that the Veteran would otherwise qualify for a pension. His service records specifically show service for 90 days or more during a period of war under 38 C.F.R. § 3.2. Thus, the central question now before the Board remains whether the payments to the Veteran's independent retirement living facility qualify as unreimbursed medical expenses. A. Applicable Law As a general matter, VA will pay a pension to any veteran of a period of war because of nonservice-connected disability or age. 38 U.S.C.A. § 1521. Basic entitlement exists if a veteran meets one of several criteria, including service in the active military, naval or air service for 90 days or more during a period of war and meets the net worth requirements under §3.274 and does not have an annual income in excess of the applicable maximum annual pension rate specified in §3.23; and is age 65 or older. 38 C.F.R. § 3.3(a)(3). In determining whether annual income is in excess of the applicable maximum annual pension rate, the amount of the countable annual income of the veteran is reduced. See 38 C.F.R. § 3.23(b). Certain expenses shall be excluded from countable income for the purpose of determining entitlement to improved pension. In relevant part, there will be excluded from the amount of an individual's annual income any unreimbursed amounts which have been paid within the 12-month annualization period for medical expenses regardless of when the indebtedness was incurred. 38 C.F.R. § 3.272(a). Unreimbursed medical expenses will be excluded from a Veteran's income when all of the following requirements are met: (i) They were or will be paid by a veteran or spouse for medical expenses of the veteran, spouse, children, parents and other relatives for whom there is a moral or legal obligation of support; (ii) They were or will be incurred on behalf of a person who is a member or a constructive member of the veteran's or 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 veteran (including increased pension for family members but excluding increased pension because of need for aid and attendance or being housebound) as in effect during the 12-month annualization period in which the medical expenses were paid. 38 C.F.R. § 3.272(g)(1). Applicable Law-M21-1 Provisions The central question of law in this case concerns the applicability of VA Fast Letter (FL)12-23 (Oct. 26, 2012), as now incorporated in the VBA Manual M21-1, Part V.iii.1.G.3.m. Room and Board and Personal Care Fees for ILFs and Other Facilities. Essentially, that Fast Letter would preclude the Veteran's payments to his independent living facility from being deducted as medical expenses. The Veteran filed his instant claim in August 2011. (As an aside, there is some question as to the exact date the RO received the Veteran's claim. There is a cover letter from the Veteran's attorney, which lists his application as an enclosure, and this cover letter reflects a VA date-stamp of August 31, 2011. The only available application form currently in the claims file, however, is date-stamped in September 2011. For purposes of this appeal, the Board will assume that the original claim was filed in August 2011.) The claim remained pending on October 26, 2012, which is when FL 12-23 was published. Generally, when the law governing a claimant's disability rating changes while on appeal, the claimant is entitled to have his claim considered under both sets of criteria to determine which set is more favorable. McGrath v. Gober, 14 Vet. App. 28, 34 (2000); see also Ervin v. Shinseki, 24 Vet. App. 318, 323 (2011), opinion corrected, 25 Vet. App. 178 (2012). Prior to issuance of this Fast Letter, as summarized in FL 12-23, the M21-1MR, Part V.iii.1.G.43.h (2011) provided, in relevant part the following: If a beneficiary or dependent, or other person for whom medical expenses may be allowed, is maintained in a home, assisted-living facility, or other institution, because the individual needs to live in a protected environment, all unreimbursed fees paid to the institution for custodial care ("room-and-board") and medical or nursing care are deductible expenses, as long as • a licensed physician certifies that the individual has a medical condition that makes such a level of care necessary . . . A physician's statement specifically addressing the issue of whether an individual who is not entitled to A&A or Housebound benefits needs to be in a protected environment must be of record, even if the individual's diagnosis is known. This Fast Letter 12-23 addressed the deductibility of the cost of room and board at certain facilities, particularly senior or independent living facilities. According to the Fast Letter, "[c]urrent guidance could be read to mean that "custodial care" is the same as room and board." Citing VBA Manual M21-1MR Part V.iii.1.G.43.h. The Fast Letter explained that "[t]o preserve the integrity of the pension program, VA considers a facility to provide custodial care if it assists an individual with two or more A[ctivities of] D[aily] Living]." Accordingly, it was determined that VA would deduct the cost of assistance with independent activities of daily living (IADLs) from the individual's income when: the individual is entitled to pension at the A&A or housebound rate, or a physician has certified that the claimant has a need to be in a protected environment, and the facility provides medical services or assistance with ADLs to the individual. The Fast Letter went on to set forth a four-step procedure for determining whether, for pension applicants residing in other than nursing homes and assisted living facilities, unreimbursed fees for room and board would be considered a deductible medical expense under 38 C.F.R. § 3.272(g). The Fast Letter stated that "these procedures apply to all original claims pending on or filed after the date of this fast letter." These provisions are currently incorporated into the VBA Manual M21-1 at V.iii.1.G.3.m, Room and Board and Personal Care Fees for ILFs and Other Facilities. In comparing the prior version of the M21-1 to that amended by Fast Letter 12-23, the Board must find that the earlier version of the M21-1 is more favorable to the extent it was interpreted as meaning that "custodial care" was the same as room and board whereas the amended version specifically excluded room and board unless the facility also provided medical services or assistance with ADLs to the individual. See FL 12-23. VA interpretations of its own regulations in its Adjudication Procedures Manual are "controlling" as long as they are not 'plainly erroneous or inconsistent with the regulation. Smith v. Shinseki, 647 F.3d 1380, 1385 (Fed. Cir. 2011). The Board will, accordingly, apply the former version of the M21-1. B. Discussion Based on the finding that the prior version of the M21-1MR is for application in this case, the Board must also find that the Veteran meets the criteria for deducting his independent living care expenses as unreimbursed medical expenses. In doing so, he qualifies for basic pension eligibility. MAPR The Maximum Annual Pension Rates (MAPR) are specified in 38 U.S.C.A. §§ 1521 and 1542, as increased from time to time under 38 U.S.C.A. § 5312. The rates of death pension benefits 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 Title 38 of the Code of Federal Regulations. 38 C.F.R. § 3.21 Beginning December 1, 2010, the MAPR for a Veteran with one dependent was $15,493.00. Five percent of this MAPR is $774.00. Beginning December 1, 2011, the MAPR for a Veteran with one dependent remained at $16,051.00. Five percent of this MAPR is $802.00. See http://www.benefits.va.gov/PENSION/rates_veteran_pen11.asp. Income As shown by a statement from the Social Security Administration (SSA), the Veteran's monthly income in 2011 was $1,241.50. The income for his wife was $583.50. He also received monthly non-VA pension income in the amount of $1,513.91, and interest income of ¢.45. Thus, the total monthly income of the Veteran and his wife was $3,339.00 (rounded to the nearest dollar). This results in a yearly income for VA purposes in the amount of $40,068.00, which is greater than the MAPR of $15,493.00. Unreimbursed Medical Expenses During this time, the Veteran and his wife, as indicated, lived in an independent retirement living facility. This facility is consistent with VA's current definition of an "independent living facility (ILF)." See VBA Manual M21-1, V.iii.1.G.3.d., Room and Board and Personal Care Fees for ILFs and Other Facilities, (an ILF means a facility where people can generally live independently, and may or may not need help with daily activities). It is also consistent with the inclusive definition of "custodial care" under the prior version of the M21-1MR. See M21-1MR, Part V.iii.1.G.43.h (2011) (If a beneficiary or dependent, or other person for whom medical expenses may be allowed, is maintained in a home, assisted-living facility, or other institution (emphasis added)). In an August 2011 form, the Veteran's doctor wrote that the Veteran did not require nursing home care, "[b]ut . . . requires a protective environment due to health issues, inability to prepare healthy meals, and overall supervision." Thus, a licensed physician has certified that the Veteran has a medical condition that makes living in a protected environment necessary. See M21-1MR, Part V.iii.1.G.43.h (2011). The Veteran and his wife paid a monthly fee of $2,965.00 to reside at this facility. This is a total of $35,580.00 per year. This amount is greater than 5 percent of the applicable MAPR during that year. Deducting this amount from their total yearly gross income in 2011 results in an income for VA purposes in the amount of $4,488.00. This amount is below the MAPR of $15,493.00 for that year. Thus, the Veteran meets the basic eligibility criteria for a pension (although there is still an offset of the full pension amount). There has been some question as to whether he meets the criteria for a higher level of pension, specifically at the aid and attendance or housebound level. At the Board hearing, the Veteran's attorney argued that the Board should take up that matter in the first instance as the facts are not in dispute as to that question. Board Hr'g Tr. 11. While mindful of the delay that might result, the Board must nonetheless defer that question to the RO. The law and the facts for that determination are different from the law and facts considered in the instant appeal, and, as the Veteran's attorney acknowledged at the hearing, the RO has not yet made a finding as to the Veteran's eligibility for pension at the aid and attendance or housebound level. Board Hr'g Tr. 8. Thus, the Veteran would be prejudiced should the Board take it up in the first instance. See 38 U.S.C.A. § 7104; Bernard v. Brown, 4 Vet. App. 384, 394 (1993). ORDER Nonservice-connected pension is granted. ____________________________________________ RYAN T. KESSEL Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs