Citation Nr: 18154950 Decision Date: 12/04/18 Archive Date: 12/03/18 DOCKET NO. 15-43 582 DATE: December 4, 2018 ORDER Entitlement to non-service-connected disability pension benefits is denied. FINDING OF FACT The Veteran had excessive income to qualify for nonservice-connected pension benefits. CONCLUSION OF LAW The criteria for entitlement to payment of non-service-connected pension benefits have not been met. 38 U.S.C. § 1521; 38 C.F.R. §§ 3.3, 3.23, 3.271, 3.272. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran had honorable active military service from March 1962 to December 1964. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from an April 2015 administrative decision of a Department of Veterans Affairs (VA) Regional Office (RO). The Veteran has represented himself throughout this appeal. In April 2017 VA received a VA Form 21-22, signed by the Veteran, in favor of the Pennsylvania Department of Military and Veterans Affairs (acknowledged by this VSO on the same day as the Veteran signed it). According to the Board's Rules of Practice, an appellant has 90 days from the certification of an appeal to the Board to change representation for any reason. 38 C.F.R. § 20.1304(a). A February 11, 2016 letter from the Board to the Veteran informed him that his case was formally placed on the Board's docket and that he had 90 days from the date of the letter to, among other things, request a change in representation. The Board notes that if a change in representation is requested more than 90 days after certification, the appellant must show good cause for the change. 38 C.F.R. § 20.1304(b). The April 2017 VA Form 21-22 was received approximately 14 months after certification and the notification letter from the Board. The Veteran provided no cause for his change in representation. Accordingly, the Board concludes that the Veteran is representing himself for the purpose of this decision. Id.; see also Perez v. Shinseki, 25 Vet. App. 190, 194-95 (2012) (concluding that when the Veteran submitted a request to change representation more than 90 days after his appeal was certified to the Board, he did not avail himself of the "good cause" provision contained in 38 C.F.R. § 20.1304(b); therefore, the Board acted correctly in declining to recognize a VSO as his representative for purposes of the Board's decision). Entitlement to non-service-connected disability pension benefits The Veteran contends that the RO used the wrong income numbers in calculating his family’s annual income and that his medical expenses should be annualized as his income was as they are ongoing and, if these adjustments were made, his income would be below the allowable income level such that he would be entitled to non-service-connected disability pension benefits. See November 2015 VA Form 9. Disability pension is paid to a veteran of a period of war who meets statutorily-defined service, net worth and annual income requirements, and who is age 65 years old or older or is permanently and totally disabled from nonservice-connected disability not the result of willful misconduct. 38 U.S.C. §§ 1502, 1503, 1521. The Veteran here served during the Vietnam era and is over 65 years old. Therefore, he meets the service and age/disability requirements for non-service-connected disability pension benefits. However, the question in the present appeal is whether he meets the annual income requirements. The purpose of VA pension benefits is to provide a subsistence income for veterans of a period of war who are totally disabled and who are otherwise unable to maintain a basic, minimal income level. Pension benefits are based upon total family income and the amount of pension benefits is adjusted based upon the number of dependents the veteran supports. 38 U.S.C. §§ 1521, 1522. The rate of pension payable to an entitled payee is based on the amount of countable income received. The maximum annual rate of pension (MAPR) is established by statute every year and is reduced by the veteran’s countable annual income. “Annual income” includes the veteran’s own annual income, and, where applicable, the annual income of a dependent spouse and, with certain exceptions, the annual incomes of each child of the veteran in his or her custody or to whose support he or she is reasonably contributing. 38 C.F.R. § 3.23 (d)(4). Under 38 C.F.R. § 3.272, the following shall be excluded from countable income for the purpose of determining entitlement to improved pension: welfare; maintenance; VA pension benefits; reimbursement for casualty loss; profit from sale of property; joint accounts (accounts in joint accounts in banks and similar institutions acquired by reason of death of the other joint owner); unreimbursed medical expenses in excess of five percent of the MAPR; expenses of last illness, burial and just debts; educational expenses; Veteran’s benefits from states and municipalities; distributions from the VA Special Therapeutic and Rehabilitation Activities Fund; hardship exclusion of a child’s available income; Survivor benefit annuity paid by the Department of Defense; cash surrender value of life insurance; life insurance lump sum payments; tax return payments; any payment made under Section 6 of the Radiation Exposure Compensation Act of 1990; and reimbursements for loss. For purposes of calculating the five percent deduction for medical expenses, the MAPR is calculated using the rate for a veteran and any dependents, without regard for aid and attendance or housebound status. 38 C.F.R. § 3.272 (g)(1)(iii). Fractions of dollars will be disregarded in computing annual income. 38 C.F.R. § 3.271(h). The Board notes that, effective October 18, 2018, VA amended some of its regulations regarding new worth, asset transfers and income exclusions for its needs-based benefits. See 83 Fed. Reg. 47246 (Sep. 18, 2018). The amendments most relevant to the present case are the newly added § 3.278 that now identifies in detail what medical expenses may be deductible from countable income for pension purposes. Generally, medical expenses for VA pension purposes are defines as payments for items or services that are medically necessary; that improve a disabled individual’s functioning; or that prevent, slow, or ease an individual’s functional decline. VA provided the following list of seven categories of medical expenses of which unreimbursed payments will be deducted from countable income: (1) care by a health care provider; (2) medications, medical supplies, medical equipment, and medical food, vitamins, and supplements; (3) adaptive equipment; (4) transportation expenses; (5) health insurance premiums; (6) smoking cessation products; and (7) institutional forms of care and in-home care. VA also specified what does not constitute a medical expense – payments for maintenance of general health, cosmetic procedures, meals and lodgings and assistance for instrumental activities of daily living. These lists are not all-inclusive. There is no prejudice in the Board's consideration of the amended regulation in this appeal as the amendments do not contain any substantive changes in the regulation that affect this particular case. See Bernard v. Brown, 4 Vet. App. 384, 393-94 (1993). The Veteran reported on his March 2015 VA 21-526 that he and his spouse had monthly income from the Social Security Administration (SSA) of $2,100.00 and $951.00 and of interest income of $0.00 and $2.00, respectively. However, an inquiry the RO made to the SSA to verify their benefits revealed that, as of December 2014, the Veteran was receiving a monthly benefit of $2,666.90 and his spouse was receiving a monthly benefit of $1,073.90. In the RO’s April 2015 notification letter advising the Veteran of its decision, the RO used the income amounts verified by the SSA in calculating the Veteran’s annual income. The Veteran argued in his VA Form 9 that the RO should have used the figures he provided in his March 2015 VA 21-526 but he did not explain why those amounts should be used over the amounts verified by the SSA. In the April 2015 notification letter, the RO advised him that it had to use the income amounts verified by SSA unless he provided evidence to either reduce or remove this type of income. Unfortunately, the Veteran has not provided any evidence to support the figures he provided to VA as his and his spouse’s SSA income. Consequently, the Board finds that the correct income figures were used in calculating the Veteran’s annual income. The Veteran and his spouse’s income is annualized or, in other words, multiplied by 12 to calculate his annual family income. Therefore, his annual family SSA income was $44,888.00 (Veteran’s income: $2,666.90 x 12 = $32,002.00; spouse’s income: $1,073.90 x 12 = $12,866.00). Plus, the Veteran reported his spouse earned $2.00 per month of interest income, or $24.00 per year. Thus, his total annual family income was $44,912.00. In addition, on his March 2015 VA 21-526, the Veteran also reported medical expenses. However, these medical expenses were from 2014 and, therefore, they cannot be applied to 2015 pension benefits. Medical expenses can only be applied in the year they were paid. However, the RO considered a medical expense deduction of $2,517.00 ($104.90 x 12 x 2) for Medicare Part B premiums to be paid by the Veteran and his spouse in 2015. This expense was allowed as a continuing medical expense because the SSA verified that both the Veteran and his spouse pay a $104.90 premium monthly for their Medicare Part B premiums. In the April 2015 notification letter, the Veteran was advised that he may still be entitled to pension benefits if his unreimbursed medical expenses reduced his income below the MAPR. He was told to submit a Medical Expense Report (MER) showing his unreimbursed medical expenses from March 6, 2015, the date of his claim, no later than December 31, 2017. Again, in a September 2015 duty to assist letter, the Veteran was asked to submit an MER reporting his unreimbursed medical expenses. Later that month, the Veteran submitted an MER reporting medical expenses from March 6, 2015 to September 22, 2015. In the October 2015 Statement of the Case, the RO allowed unreimbursed medical expenses in the amount of $10,350.00. The Veteran argued in his VA Form 9 that his reported medical expenses were only for six months and that they should be annualized like his income was. However, medical expenses are not treated the same as income. Normally, medical expenses are deducted from an award after the fact, based on the Veteran’s report of expenses actually paid. However, under 38 C.F.R. 3.272(g), medical expenses may be allowed prospectively if the Veteran is paying recurring expenses, such as Medicare Part B premiums, nursing home fees or other reasonably predictable medical expenses. Most medical expenses are allowed as a deduction after the Veteran pays them. All medical expenses other than those that are allowed prospectively are considered to be nonrecurring medical expenses. In the present case, it appears the only medical expense that was allowed prospectively as a recurring or continuing medical expense was the Medicare Part B premiums for the Veteran and his spouse. Although the Veteran reported paying private medical insurance, he only provided a lump sum amount for the six-month period reported rather than a monthly premium amount. Therefore, the Veteran did not provide enough information to determine whether this expense is a recurring medical expense like the Medicare Part B premiums. The remainder of the medical expenses appear to be for prescription medications, medical and dental care and eye glasses, all of which would be considered nonrecurring medical expenses. Therefore, the Board finds that it would not be proper to annualize the Veteran’s reported medical expenses, except for the Medicare Part B premiums as the RO has already done, because these medical expenses are not recurring or reasonably predictable expenses. Hence, the Board finds that the RO has appropriately counted the Veteran’s medical expenses. The Board notes that the Veteran had until December 31, 2017 to submit additional medical expenses for the first pension year to support his claim for non-service-connected disability pension benefits. Yet, he merely argued that his medical expenses were excessive and ongoing without providing support for such arguments. VA can only deduct expenses of which it has proof were paid in the given year for which they are claimed. Prospective estimates of medical expenses are only allowed in very narrow circumstances as described above. The Veteran never provided any evidence to support that his expenses were of such type nor did he submit additional medical expenses for the remaining six months of that first pension year to obtain an additional deduction for medical expenses he actually paid. In conclusion, the MAPR applicable as of April 1, 2015 was $16,851.00. The Veteran’s annual family income was $44,912.00 and deductible medical expenses was $9,508.00 ($10,350.00-842.00) for countable annual income of $35,404.00. As the Veteran’s countable annual income of $35,404.00 is clearly greater than the MAPR of $16,851.00, the Veteran is not entitled to non-service-connected disability pension benefits due to having excessive income. Therefore, the Board has no choice but to deny his claim for non-service-connected disability pension benefits. Although the Board is sympathetic to the Veteran and thankful for his service, it is bound by the laws and regulations applicable to the benefit sought. 38 C.F.R. § 19.5. Unfortunately, at this time, the evidence does not support granting the benefit sought. M. C. GRAHAM Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD S.M. Kreitlow