Citation Nr: 1751176 Decision Date: 11/08/17 Archive Date: 11/17/17 DOCKET NO. 17-24 219 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office and Insurance Center in Philadelphia, Pennsylvania THE ISSUE Whether the appellant's net worth is a bar to entitlement to nonservice-connected death pension benefits based on the need for aid and attendance. ATTORNEY FOR THE BOARD Dan Brook, Counsel INTRODUCTION The appellant is the surviving spouse of the Veteran who served on active duty from September 1942 to October 1945. This matter comes before the Board of Veterans' Appeals (Board) from a February 2017 decision of the Philadelphia, Pennsylvania Regional Office (RO) of the Department of Veterans' Affairs (VA). This appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2017). 38 U.S.C.A. § 7107(a)(2) (West 2014). FINDING OF FACT Based on data from December 2016, the appellant's net worth was assessed as approximately $135,000 and was being depleted at an approximate rate of $76,000 per year. CONCLUSION OF LAW The corpus of the Veteran's estate no longer precludes the payment of nonservice-connected pension benefits to the appellant based on the need for aid and attendance. 38 U.S.C.A. §§ 1513, 1521, 1522 (West 2014); 38 C.F.R. §§ 2.275, 2.276, 3.3, 3.23, 3.274 (2017). REASONS AND BASES FOR FINDING AND CONCLUSION Death pension benefits are generally payable to surviving spouses as a result of a veteran's nonservice-connected death. 38 U.S.C.A. § 1541 (a). 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 (a)(1), 1521(j); 38 C.F.R. §§ 3.3 (b)(4), 3.274. In order to receive benefits, an eligible surviving spouse must meet the net worth requirements found in 38 C.F.R. § 3.274 and not have an annual income in excess of the maximum annual pension rate as specified in 38 C.F.R. § 3.23. 38 C.F.R. §§ 3.3, 3.23, 3.274. Pension will be denied or discontinued when the corpus of the estate is such that, under all the circumstances, including consideration of the surviving spouse's income, it is reasonable that some part of the corpus of such estate be consumed for the surviving spouse's maintenance. 38 U.S.C.A. § 1541 (a)(1); 38 C.F.R. § 3.274 (c). The terms corpus of estate and net worth are interchangeable, and mean the market value, less mortgages or other encumbrances, of all real and personal property owned by the appellant, except the appellant's dwelling (single family unit), including a reasonable lot area, and personal effects suitable to and consistent with the appellant's reasonable mode of life. 38 C.F.R. § 3.275 (b). In determining whether the estate should be used for the surviving spouse's maintenance, factors to be considered include family income, whether the property can be readily converted into cash at no substantial sacrifice, life expectancy, the number of qualifying dependents, and the potential rate of depletion, including spending due to unusual medical expenses. 38 C.F.R. § 3.275 (d). There is no specific dollar limitation on net worth (as opposed to income) that bars an individual from receiving improved death pension benefits under 38 C.F.R. 3.274. However, VA's adjudication manual directs the rating agency to undertake development action to determine if net worth is excessive for any claimant who has an estate of $80,000 or greater. See M21-1MR V.i.3 and V.iii.1.J.70. It further instructs that the basic issue in evaluating net worth is to determine whether or not the claimant's financial resources are sufficient to meet the claimant's basic needs without assistance from VA, and that VA's income-based programs are intended to give beneficiaries a minimum level of financial security and are not intended to protect substantial assets or build up the beneficiary's estate for the benefit of heirs. M21-1MR V.iii.1.J.1g. The appellant is 93 years old and lives in an assisted living facility. In the February 2017 decision, the RO determined that based on information provided by the appellant in a December 2016 death pension eligibility verification report (EVR), her net worth was $135,012.46, her annual income was $19,476.72; her annual expenses were $95,874.60 and her annual deficit was $76,397.88. It also determined that it would take approximately 1.77 years for the Veteran to spend down her net worth. The Board notes that the RO generally undertakes development action to determine if net worth is excessive for pension purposes for any claimant who has an estate of $80,000 or greater. See M21-1MR V.i.3 and V.iii.1.J.70. As of December 2016, the appellant certainly did have such an estate as her net worth was determined to be $135,012.46. However, given that she is shown to have a $76000+ annual deficit; given that 11 months have passed since the reporting on which the RO's net worth determination was based; and given that the evidence more generally shows that the appellant is spending down her resources on an ongoing basis to pay the costs of housing and care at her assisted living facility, as well as other ongoing medical and other expenses, it is reasonable to conclude that her net worth has already dropped below $80,000 or will drop below this amount in the near future. Accordingly, giving precedence to the rapid rate of depletion of the appellant's financial resources and resolving any reasonable doubt in her favor, the Board finds that the appellant's net worth is no longer a bar to entitlement to nonservice-connected death pension benefits based on the need for aid and attendance. ORDER The appellant's net worth no longer constitutes a bar to entitlement to nonservice-connected death pension benefits based on the need for aid and attendance. ____________________________________________ KELLI A. KORDICH Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs