Citation Nr: 1802287 Decision Date: 01/11/18 Archive Date: 01/23/18 DOCKET NO. 16-37 678 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office and Insurance Center in Philadelphia, Pennsylvania THE ISSUE Entitlement to payment of Department of Veterans Affairs nonservice-connected pension benefits and special monthly pension based on the need for regular aid and attendance. ATTORNEY FOR THE BOARD K. Hughes, Counsel INTRODUCTION The Veteran served on active duty from July 1943 to June 1946. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a March 2014 determination of the Department of Veterans Affairs (VA) Regional Office and Insurance Center in Philadelphia, Pennsylvania (RO). In that decision, the RO denied the claim for non-service-connected pension benefits. This appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2017). 38 U.S.C. § 7107(a)(2) (2012). FINDINGS OF FACT 1. The corpus of the Veteran's estate exceeds $109,000. 2. Although expenses exceed income, it is reasonable for the Veteran to consume part of his total net worth for maintenance. CONCLUSION OF LAW The corpus of the Veteran's estate precludes the payment of nonservice-connected pension benefits. 38 U.S.C. §§ 1513, 1521, 1522 (2012); 38 C.F.R. §§ 3.23, 3.271, 3.272, 3.274, 3.275, 3.276 (2017). REASONS AND BASES FOR FINDINGS AND CONCLUSION The essential question for consideration in this appeal is whether the Veteran's net worth is excessive for purposes of granting VA nonservice-connected pension benefits and special monthly pension based on the need for regular aid and attendance. Basic entitlement exists if the veteran: (1) served in the active military, naval or air service for ninety (90) days or more during the period of war; (2) is permanently and totally disabled from nonservice-connected disability not due to his own willful misconduct, or is 65 years of age or older; and (3) meets the specified net worth requirements and does not have an annual income in excess of the applicable maximum annual pension rate. 38 U.S.C. §§ 1513, 1521; 38 C.F.R. §§ 3.3, 3.23, 3.274. Special monthly pension is warranted if a veteran is in need of regular aid and attendance. 38 U.S.C.A. § 1521(d). There is no specific dollar limitation on net worth (as opposed to income) that bars an otherwise eligible claimant from receiving pension benefits. However, entitlement to shall be denied or discontinued when the corpus of the estate of the Veteran, and of the Veteran's spouse, are such that under all the circumstances, including consideration of the annual income of the Veteran, the Veteran's spouse, and the Veteran's children, it is reasonable that some part of the corpus of such estates be consumed for the Veteran's maintenance. 38 U.S.C.A. §§ 1521, 1522; 38 C.F.R. § 3.274. The terms "corpus of estate" and "net worth" mean the market value, less mortgages or other encumbrances, of all real and personal property owned by the claimant, except the claimant's dwelling (single family unit), including a reasonable lot area, and personal effects suitable to and consistent with the claimant's reasonable mode of life. 38 C.F.R. § 3.275(b). In computing income, 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 38 C.F.R. § 3.272. 38 C.F.R. § 3.271. 38 C.F.R. § 3.272(b) excludes the value of maintenance furnished by a relative, friend, or charitable organization. Certain unreimbursed medical expenses (if in excess of five percent of the MAPR) may be excluded from countable income for the same 12-month annualization period to the extent they were paid. 38 C.F.R. § 3.272(g). In determining whether some part of the claimant's estate should be consumed for the claimant's maintenance, consideration will be given to the amount of the claimant's income together with the following: Whether the property can be readily converted into cash at no substantial sacrifice; life expectancy; number of dependents; and potential rate of depletion, including unusual medical expenses. 38 C.F.R. § 3.275(d). The Veteran's original claim for nonservice-connected pension was received by VA on February 14, 2014. In response to a March 2014 administrative denial, the Veteran's notice of disagreement was received in June 2014. He reported that, since filing his claim, his health had deteriorated and, on the recommendation of his primary care physician, he had moved to an assisted living facility on April 26, 2014. He included the first two monthly statements from the facility, showing the monthly fee as $2,704 for "regular single studio" and "rent." Notably, an April 2015 VA Form 21-0779, Request for Nursing Home Information in Connection with Claim for Aid and Attendance, signed by an official of the nursing home facility shows that the Veteran is responsible for $3,651 per month out of pocket. In a May 2015 statement, the Veteran explained that his wife lives with him in the assisted living facility, the charge for a second person is $600 per month and "all food costs" are extra. He also reported the market value of property (gold and silver coins) as approximately $60,000. A June 2015 rating decision granted entitlement to special monthly pension based on the need for aid and attendance, effective February 14, 2014, the date of receipt of the Veteran's claim. In a March 2016 communication, the Veteran reported that he received $50 in dividend/interest income and, in September 2014, he began receiving $3000 per month from long term care insurance, which "should continue indefinitely." In consideration of the above income information as well as income information provided in the Veteran's February 2014 VA Form 21-527EZ, Application for Pension, and October 2014 VA Form 21-527, Income, Net Worth, and Employment Statement; a June 2016 Corpus of Estate Determination found that, based on the Veteran's age of 90 years, his life expectancy was 4.4 years. It was also determined that his (and his wife's) annual income of $42,948 and annual expenses of $56,566 resulted in an annual deficit of $13,617. His assets, consisting of stocks, bank deposit and other personal property, were valued at $109,065. As such, it was determined that, while monthly expenses exceeded income, the Veteran's net worth was sufficient to last past his life expectancy; thus, his net worth was a bar to benefits. It was also noted that, as the Veteran did not complete and return a VA Form 21-8049, Request for Details of Expenses, additional adjustments to his income and expenses could not be calculated. Accordingly, a June 2016 statement of the case continued the denial of entitlement to non-service connected disability pension with special monthly pension due to evidence showing the Veteran's income exceeds the maximum allowable limit for a Veteran with one dependent, effective February 14, 2014. In computing the Veteran's countable income, the claim has been considered as that of a married veteran (a veteran with one dependent) who is in need of aid and attendance. Regarding income, the Veteran's countable income cannot be in excess of the Maximum Annual Pension Rate (MAPR) specified in 38 C.F.R. § 3.23. 38 U.S.C. § 1521(a), (b); 38 C.F.R. § 3.3(a)(3). 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 published in VA regulations. 38 C.F.R. § 3.21. From 2014 to the present time, the MAPR for a Veteran with one dependent at the Aid and Attendance rate ranged from $25,448 (in effect from December 1, 2014) to $26,036 (December 1, 2017). As noted above, the June 2016 Corpus of Estate Determination shows that, although the Veteran's monthly expenses exceeded his income, his net worth was substantial to last past his life of expectancy. It noted that, in his July 2016 VA Form 9, Appeal to Board of Veterans' Appeals, the Veteran stated that, "with limited life expectancy, I seek additional legitimate sources of income to help family members as gifts for how they have helped me financially over the years." In this regard, VA has specifically acknowledged situations where estate planning preserves assets for heirs while taking advantage of governmental assistance programs and has instructed that where those assets are available for the claimant's benefit they are to be considered as part of net worth. See VBA Manual M21-1, V.iii.1.J.4.f. VA's pension program is intended to give beneficiaries a minimum level of financial security; it is not intended to protect substantial assets or build up the beneficiary's estate for the benefit of heirs (or "family members"). See VBA Manual M21-1, V.i.3.A.1.e. Pension entitlement is based on need and that need does not exist if a claimant's estate is of such size that he/she could use it for living expenses. In the present case, based on the Veteran's income and net worth, the Board finds that it is reasonable that some part of the Veteran's estate be consumed for his and his spouse's maintenance. Therefore, the Board finds that entitlement to nonservice-connect pension benefits and special monthly pension should be denied. See 38 C.F.R. § 3.274(a). ORDER Entitlement to payment of VA nonservice-connected pension benefits and special monthly pension based on the need for regular aid and attendance is denied. ____________________________________________ M. C. GRAHAM Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs