Citation Nr: 1802458 Decision Date: 01/11/18 Archive Date: 01/23/18 DOCKET NO. 12-00 613 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Detroit, Michigan THE ISSUE Entitlement to payment of VA non-service connected (NSC) death pension benefits at a higher rate, to include whether benefits were correctly calculated based on countable income. ATTORNEY FOR THE BOARD M.H. Stubbs, Counsel INTRODUCTION The Veteran served on active duty in the U.S. Navy from March 1973 to May 1974. He died in September 2009. By administrative decision dated in September 2010, the appellant was determined to be the Veteran's common law wife (spouse) for VA purposes. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a December 2010 decision in which the Department of Veterans Affairs (VA) Pension Management Center in St. Paul, Minnesota awarded death pension benefits to the appellant. The appellant appealed the amount of death pension benefits she was awarded and requested a Decision Review Office (DRO) review the case. As such, the case was transferred to the Regional Office (RO)in Wichita, Kansas. However, during the appeal, the appellant has moved, and the correct RO is now the Detroit, Michigan RO. This claim was previously before the Board in 2012 and 2014. The claim was remanded for additional accounting in both instances, to include consideration of new evidence without waiver. The additional accounting has been completed and the claim has been properly returned to the Board. A majority of the pertinent calculations are contained in the Legacy Content section of VBMS. FINDING OF FACT A higher rate of payment for VA NSC death pension benefits is not warranted based on the appellant's countable income and reported medical expenses. CONCLUSION OF LAW The criteria for death pension benefits at a higher rate than have been paid, have not been met. 38 U.S.C. § 1542 (West 2012); 38 C.F.R. §§ 3.3, 3.24, 3.271, 3.272, 3.273 (2016) REASONS AND BASES FOR FINDING AND CONCLUSION Due Process for Death Pension Benefits Payment and Adjustments The Board finds that general due process concerns have been satisfied in connection with the current appeal. An initial claim for death pension benefits was granted in December 2010 with scheduled adjustments based on income information provided by the appellant and via SSA data inquiries. Additional adjustments to her benefits payments have been made on several occasions based on information received from SSA and changes to the maximum annual pension rate (MAPR). The appellant has submitted an appeal with regard to the rate of payment of death benefits based on countable income. As the case involves an initial award of benefits, and because the later adjustments of benefits have been based on factual and unambiguous information with regard to the appellant's income in the form of an SSA data inquiry, the Board finds that due process requirements have been met. The appellant has been notified of changes in her monthly payments, and in December 2013, she was informed of changes to prior payments based on new information from SSA regarding the state paying for her Medicare Part B. The overpayment that was found based on this new information was waived by VA in an August 2014 decision. Lastly, the 2012 Board remand included information on how death pension rates are calculated and paid. In this case, the appellant's appeal is being denied based solely on factual and unambiguous information as to income. Thus, the Board finds that additional notice and assistance is not required to address the appeal for death pension benefits. See also Sabonis v. Brown, 6 Vet. App. 426, 430 (1994). Accordingly, the Board finds it may proceed with adjudication on the merits. Death Pension and Countable Income Death pension is available to the "surviving spouse" of a Veteran because of a nonservice-connected death, as long as the Veteran served for the required period of time during wartime subject to certain income limitations. See 38 U.S.C. § 101, 1521(j), 1541; 38 C.F.R. §§ 3.3 (b)(4), 3.23(a)(5), (d)(5). Basic entitlement to such pension exists if, among other things, the claimant's income is not in excess of the maximum annual pension rate (MAPR) specified in 38 C.F.R. § 3.23. See 38 U.S.C. § 1521 (a), (b); 38 C.F.R. § 3.3 (a)(3). 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 surviving spouse. 38 U.S.C. § 1503, 1521; 38 C.F.R. §§ 3.3, 3.23(b). In determining annual income, 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. § 1503 (a); 38 C.F.R. § 3.271 (a). Social Security benefits are not specifically excluded under 38 C.F.R. § 3.272. Such income is therefore included as countable income. For purposes of calculating pension benefits, total income may be reduced by amounts equal to amounts paid by a claimant for unreimbursed medical expenses that were "in excess of 5 percent of the applicable maximum annual pension rate or rates... as in effect during the 12-month annualization period in which the medical expenses were paid." See 38 C.F.R. § 3.272 (g)(1)(iii); 38 U.S.C. § 1503 (a)(8). 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 surviving spouse received no reimbursement, such as through an insurance company. However, the medical insurance premiums themselves, as well as the Medicare deduction, may be applied to reduce countable income. For the purpose of determining initial entitlement, or resuming payments on an award that was previously discontinued, the monthly rate of pension shall be computed by reducing the applicable maximum pension rate by the countable income on the effective date of entitlement and dividing the remainder by twelve. 38 C.F.R. § 3.273 (a). In essence, VA subtracts the total amount of countable income in one year, less excluded income, from the MAPR for that year; then, if a positive amount remains, the rest is divided by twelve to determine the monthly death pension benefit. When a change in the MAPR occurs, VA repeats the calculation with the new MAPR as the starting amount. 38 C.F.R. § 3.273 (b)(1). When a change in income occurs, the MAPR will be reduced by the new annualized income effective on the date that the increased income began. 38 C.F.R. § 3.273 (b)(2). Factual Background and Analysis A December 2009 SSA Inquiry showed that the appellant was receiving $502 per month for the years beginning December 2008 and December 2009. She had Medicare Part B (SMIB) costs of $110.50 per month which had been paid by the state since October 2007. A July 2010 SSA inquiry showed that the appellant was receiving $502 per month for the years beginning December 2008 and December 2009. Her SMIB costs of $110.50 per month were noted to be paid by the state with a start date of June 1, 2010. A September 2010 SSA inquiry showed that the appellant was receiving $502 per month for the year beginning December 2008, and that she was receiving $501.50 per month beginning September 2010. She had SMIB costs of $110.50 per month that were paid by the state from June 2010 to September 2010. The inquiry indicated she had a retro payment of $391.00 which began September 2010. The appellant paid for the Veteran's funeral, at a cost of $671. She was provided burial benefits from VA at the amount $395. The difference that she was not reimbursed for his burial expenses was $276. In the initial December 2010 decision, the appellant's claim for NSC death pension benefits was approved subject to the income limitations and calculations mentioned. That decision granted monthly pension benefits at a rate of $182.00 per month beginning October 1, 2009, $185.00 beginning February 1, 2010, $162.00 beginning October 1, 2010, $163.00 beginning November 1, 2010, and $237.00 beginning February 1, 2011. During this period, the MAPR remained $7,933.00. For the purposes of medical expenses, five percent of the MAPR ($7,033.00) was $396.65. The RO used this MAPR in calculating the appellant's entitlement to death pension benefits, and therefore a higher maximum rate of death pension is not warranted unless the appellant established either that she is housebound or in need of aid and attendance, which she has not alleged. As a higher rate of death pension benefits is not warranted, the Board will next review the countable income, medical expenses, and calculations used to provide her payments throughout the appeal process. From the grant of pension benefits, effective September 11, 2009, through December 2010, the appellant's countable income changed in that her SSA payments fluctuated between $502.00 and $501.50 per month. Also during this period, the Veteran had medical expenses via a payment for MSIB of $110.50 per month ($1,326.00 annually). However, the MSIB payments were made by the state from June 2010 to September 2010 ($331.50). The initial December 2010 grant included that her medical expenses were considered, and that $276.00 was considered under the heading "L.E." for the periods beginning October 1, 2009 and February 1, 2010. This is listed as "Last Exp" on a subsequent page. The remarks section includes that the funeral expenses for the Veteran were considered, "MOD issued, a/c payment subtracted from bill." On the appellant's benefits notice, it was indicated that the $276 was the adjusted benefit from October 1, 2009 to October 1, 2010 for the Veteran's last expenses, minus the $395 repaid by VA for his funeral. Thus, the initial payments beginning September 11, 2009 are based on the appellant's annual income ($6,024.00) minus the remainder of the Veteran's funeral expenses ($276.00), or an adjusted countable income of $5,748.00. This results in death pension benefits of $2,185.00 per year or $182.00 per month after subtracting her adjusted countable income from the appropriate MAPR ($7,933.00-$5,748.00). Following the 2012 Board remand, a "User Calculations" form was added to the claims file which included the information that the MSIB was paid by the appellant beginning February 1, 2010, and by the state from June 1, 2010 to September 1, 2010. Therefore, in 2010, the appellant paid four months of $110.50, and therefore had $442.00 in medical expenses. Her 2010 medical expenses ($442.00) minus $397.00 (5% MAPR) is $46.00. The remainder of the funeral expenses ($276.00), plus the medical expenses of $46.00, is $322.00. Her annual income of $6,024.00 (based on $502 per month SSA) minus $322.00 is $5,702.00. MAPR of $7,933.00 minus adjusted annual income of $5,702.00 is $2,231.00 in NSC death pension per year, or $185.00 per month beginning February 1, 2010. From October 1, 2010, the appellant had SSA income of $6,024.00, and medical expenses of $442.00 (four months of SMIB paid in 2010). As above, this results in countable medical expenses of $46.00. Her income of $6,024.00 minus $46, is $5978.00. MAPR of $7,933 minus $5,978.00 is $1,955.00 per year in NSC death pension benefits, or $162.00 per month. The $276.00 in funeral expenses had been paid for one 12-month period, from September 2009 to September 2010, and was therefore removed from her medical expenses calculations starting October 1, 2010. Beginning November 1, 2010, the appellant had SSA income of $6,018.00, and medical expenses of $442.00 (four months of SMIB paid in 2010). As above, this results in countable medical expenses of $46.00. Her income of $6,018.00 minus $46.00, is $5,972.00. MAPR of $7,933 minus $5,972.00 is $1,961.00 per year in NSC death pension benefits, or $163.00 per month. Following the second Board remand, the VA recalculated the appellant's NSC death pension benefits based on new information. An May 2014 VETSNET compensation and pension award was issued addressing the benefits to be provided from February 1, 2011 to May 2014. VA calculated that in 2011, the appellant reported $1,046.00 in medical and dental expenses. She reported $827.76 in medical and dental expenses for 2012. Beginning February 1, 2011, the appellant's SSA income was $502.00 per month ($6,024.00). Her medical expenses of $1,046.00 were $649.00 over $397.00 (5% MAPR). Thus her adjusted annual income was $5,374.00. MAPR of $7,933.00 minus $5,374.00 is $2,559.00 per year, or $213.00 per month, for NSC death pension benefits. Beginning December 2011, the appellant's SSA income increased to $520.00 per month ($6,240.00) and the MAPR increased to $8,219.00 (5 percent is $410.00). Her medical expenses ($1,046.00) less the 5 percent MAPR ($410.00) were $635.00. Her adjusted income was $5,605.00. MAPR less her adjusted income was $2,614.00 or NSC death pension benefits of $217.00 per month. Beginning January 1, 2012, the appellant's SSA income and MAPR remained the same, but her medical expenses changed to $827.00. The allowable medical expenses ($827.00-$410.00) of $417.00, resulted in an adjusted income of $5,823.00. MAPR of $8,219.00 less her adjusted income was $2,396.00 per year, or $199.00 per month for NSC death pension benefits. Beginning December 1, 2012, the appellant's SSA income increased to $6,336.00 per year, and the MAPR increased to $8,359.00. Her medical expenses for 2012 remained $827.00. This resulted in an adjusted annual income of $5,926.00. Using the MAPR, this results in monthly NSC death pension payments of $202.00. At the time, the appellant did not provide any medical expenses information for 2013. As such, her NSC death pension payments beginning January 1, 2013 and December 1, 2013 were based solely on her SSA income and the MAPR. Notably, SSA Inquiries contained in the record continued to show that the appellant's MSIB was being paid for by the state beginning May 2011. The appellant provided medical expenses totalling $206.90, which were paid in 2013. MAPR in 2013 was $8,359.00, and 5 percent of that was $417.00. As the medical expenses did not exceed 5 percent of MAPR, no medical expenses could be deducted from her countable income for 2013. The VETSNET Compensation and Pension Award included the NSC death pension rate calculations for the periods beginning January 2013 and December 2013, which were based solely on her SSA income and MAPR, and were correct. There are no additional VETSNET Compensation and Pension Award calculations as the appellant has not provided any additional medical expense information since the 2013 medical expenses. Her award continues to be updated based on changes in SSA income and MAPR. Again, the Board notes that the appellant has asked for all of the pension benefits that the Veteran was receiving at the time of his death. Unfortunately, the Board finds that the law does not provide for entitlement to such payment to the appellant. The Veteran was receiving nonservice-connected pension with no dependents at the time of his death. The applicable MAPR in effect at that time for improved disability pension was $11,830.00. The appellant is not entitled to that MAPR because she is not entitled to the Veteran's improved disability pension. Rather she is only entitled to improved death pension. As previously stated, the applicable MAPR in effect at the time of the Veteran's death for improved death pension was $7,933.00. Her death pension benefits have changed to keep up with the MAPR and changes in her income and adjusted income. Consequently, as a matter of law, she is not entitled to a higher maximum rate of death pension. Again, she has not alleged that she is housebound or in need of aid and attendance. While the Board is sympathetic to the appellant's financial situation, a review of the evidence shows that a greater benefit is not payable to the appellant based on her countable income. For these reasons, the Board finds that a higher rate of payment for VA nonservice-connected death pension benefits is not warranted. Calculating annual income and countable medical expenses can be confusing. The Board hopes that this decision sheds some light on why the appellant was provided certain monthly payments throughout the appeal period from 2009 to 2017. Where the law and not the evidence are dispositive, the claim must be denied due to lack of entitlement under the law. See Sabonis v. Brown, 6 Vet. App. 426 (1994). ORDER Entitlement to higher rate of payment for VA nonservice-connected death pension benefits is denied. ____________________________________________ G. A. Wasik Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs