Citation Nr: 18140605 Decision Date: 10/04/18 Archive Date: 10/03/18 DOCKET NO. 17-28 146 DATE: October 4, 2018 ORDER Entitlement to nonservice-connected pension benefits with need for aid and attendance is denied. FINDING OF FACT Prior to his death, the Veteran’s net worth was such that under all the circumstances, it was reasonable that some part be consumed for the Veteran’s maintenance. CONCLUSION OF LAW The criteria for entitlement to nonservice-connected pension benefits have not been met. 38 U.S.C. §§ 1503, 5107; 38 C.F.R. §§ 3.3, 3.23, 3.102, 3.260, 3.261, 3.262, 3.271, 3.272, 3.274, 3.275. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty from March 1951 to March 1955. The Veteran died in October 2017. The appellant is the Veteran’s surviving spouse, who has successfully substituted as the appellant on the Veteran’s claim of entitlement to nonservice-connected pension benefits, which was pending at the time of his death. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from a February 2017 decision letter issued by a Department of Veterans’ Affairs (VA) Regional Office (RO). Jurisdiction over the appeal presently rests with the VA Pension Management Center (PMC) in Philadelphia, Pennsylvania. 1. Entitlement to nonservice-connected pension benefits with need for aid and attendance, based on net worth Prior to his death, the Veteran perfected an appeal to the Board of the denial of nonservice-connected pension benefits. As noted above, the appellant, his surviving spouse, has successfully substituted as appellant on the claim. Basic entitlement to an improved monthly pension exists if a veteran (1) served in the active military, naval or air service for 90 days or more during a period of war (38 U.S.C. 1521(j)); (2) meets the net worth requirements under 38 C.F.R. §3.274; (3) does not have an annual income in excess of the applicable maximum annual pension rate; (4) and is age 65 or older or is permanently and totally disabled from nonservice-connected disability not due to the veteran’s own willful misconduct. 38 C.F.R. § 3.3(a)(3). For a veteran seeking pension entitlement, pension shall be denied or discontinued when the corpus of the estate of the veteran, and 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 C.F.R. § 3.274(a). For VA pension purposes, net worth includes assets such as bank accounts, stocks, bonds, mutual funds, annuities, and any property other than residence and a reasonable lot area. See M21-1, Part V, Subpart iii, Chapter 1, Section J (September 20, 2018); see also 38 C.F.R. §§ 3.274 and 3.275. If a claimant’s assets are large enough that the claimant could use these assets to pay living expenses for a reasonable period of time, net worth is considered a bar to pension benefits. M21-1, V.iii.1.J.1.g (September 20, 2018). Pension benefits are paid at the maximum annual rate reduced by the amount of annual income received by the veteran. 38 C.F.R. § 3.23(b). Countable income includes income from most sources as well as from any eligible dependents, and generally includes earnings, disability and retirement payments, interest and dividend payments from annuities, and net income from farming or a business. Some expenses, such as unreimbursed medical expenses, may reduce countable income. See 38 U.S.C. § 1503(a); 38 C.F.R. §§ 3.260, 3.261, 3.262, 3.271(a), 3.272. The Veteran filed his claim for nonservice-connected pension benefits, with need for aid and attendance, on November 21, 2016. Effective December 1, 2016, yearly income for a veteran with a single dependent spouse and need for aid and attendance had to be less than the maximum annual pension rate (MAPR) of $25,525.00; and to be deducted, medical expenses had to exceed 5 percent of the MAPR, or $1276.25. Unreimbursed medical expenses will be excluded 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 five percent of the applicable maximum annual pension rate or rates for the veteran as in effect during the 12-month annualization period in which the medical expenses were paid. 38 C.F.R. § 3.272(g). The Board finds the claim should be denied because the Veteran did not meet the net worth requirements for a grant of pension benefits. At the outset, the Board recognizes that the Veteran served more than 90 days on active service during a period of war, and prior to his death required full-time nursing home care, and therefore was permanently and totally disabled from a nonservice-connected disability. Therefore, the first and fourth criteria were met. Regarding annual income, at the time of his application, the Veteran reported $1,396.90 in personal income and $824.90 in income for his spouse (the appellant) from the Social Security Administration. He also reported monthly pension income in the amount of $887.50 for himself and $61.98 for his spouse. He also reported a maximum IRA withdrawal for himself in the amount of $740.00 for the year and $65.00 for the year for his spouse. This comes to a grand total of $38,860.36 in household income for the year. The Veteran further reported medical expenses in the amount of $209.80 per month for Medicare withholding for himself and the appellant, and $6155.00 for himself for full-time assisted living costs. This equals $76,377.60 in qualifying medical expenses. In short, prior to his death, the Veteran reported monthly medical expenses which far exceeded his monthly household income. Therefore, affording the benefit-of-the-doubt, it is conceded that his “income” was below the MAPR for the period in question. However, presuming his income was below the MAPR, and he was permanently disabled, and he served the required amount of active service to be eligible for a grant of pension benefits, the Board must still consider net worth. In this respect, the Board finds that the Veteran did not meet the criteria. With his initial application for pension benefits, the Veteran submitted bank statements ending on August 31, 2016, showing savings and checking accounts in the amount of $33,129.98 and $114,322.97, for a total of $147,452.95. He later submitted statements dated in April 2017 showing combined savings and checking accounts in the amounts of $13,038.54 and $94,977.37, for a total of $108,015.91. VA has specifically acknowledged situations where estate planning preserves assets for heirs (in this case, the appellant) 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 M21-1, Part V.iii.1.J.4.f (September 20, 2018). However, 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 M21-1, Part V.iii.1.J. Pension entitlement is based on need and that need does not exist if a claimant’s estate is of such size that he or she could use it for living expenses. In this case, the Veteran, prior to his death, had a limited life expectancy (as demonstrated by the fact that he passed away less than a year after his initial application) and significant marital assets. The evidence certainly suggested that the Veteran’s expenses exceeded his income prior to death, and was therefore living above his monthly means. However, the fact that he had means (as of April 2017, a mere six months before his death, over $100,000), disqualified him from eligibility for pension benefits. As stated above, the purpose of VA pension benefits, as authorized by Congress, is to provide a minimum level of financial security to those who served their country and find themselves without any other means of basic support. It is not intended to protect substantial assets, subsidize discretionary spending, or build up a beneficiary’s estate. In light of this, the Board finds that the Veteran did not meet the net worth requirements under 38 C.F.R. § 3.274, prior to his death, and therefore the claim must be denied. In reaching this conclusion, the Board has considered the applicability of the benefit-of-the-doubt doctrine; however, because the preponderance of the evidence is against the claim, that doctrine does not apply. See 38 U.S.C. § 5107; Gilbert v. Derwinski, 1 Vet App. 49 (1990); 38 C.F.R. § 3.102. In making this determination, the Board does observe that the appellant only filed a claim to substitute as appellant on the Veteran’s claim pending at the time of his death, and has not, as of this time, filed a personal claim for dependency and indemnity compensation (DIC) benefits or survivor pension benefits as of this time. The Board notes that this denial in no way affects any future claim for DIC or survivor pension benefits, presuming the appellant files such a claim in the future and can show that she meets the criteria for such a grant. B.T. KNOPE Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD M. Pryce, Associate Counsel