Citation Nr: 1808913 Decision Date: 02/12/18 Archive Date: 02/23/18 DOCKET NO. 16-17 033 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Philadelphia, Pennsylvania THE ISSUE Whether the Veteran's net worth is a bar to entitlement to special monthly compensation based on the need for aid and attendance prior to May 1, 2017. REPRESENTATION Appellant represented by: The American Legion ATTORNEY FOR THE BOARD J.A. Williams, Associate Counsel INTRODUCTION The Veteran served on active duty from March 1944 to May 1946. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a July 2015 rating decision the Department of Veterans Affairs (VA) Regional Office (RO) in Philadelphia, Pennsylvania. The July 2015 rating decision granted entitlement to special monthly pension based on the need for aid and attendance effective July 10, 2015. However, although the Veteran was approved for aid and attendance, his net worth was found to be excessive for VA purposes. The Veteran submitted an additional claim in May 2017 citing a change in his expenses. In a July 2017 notification letter, the RO granted and awarded disability pension benefits with aid and attendance effective May 1, 2017. Thus, the period on appeal consists of the period prior to May 1, 2017 when the Veteran was found eligible for compensation. 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) (West 2014). FINDINGS OF FACT 1. At the time of the decision on appeal, the Veteran was 89 years old with a life expectancy of 4.7 years; his net worth was approximately $69,000. 2. Prior to May 1, 2017, his monthly expenses exceeded income by $14,017.68 and would deplete his net worth in 4.97 years. CONCLUSION OF LAW Prior to May 1, 2017, the Veteran's net worth precludes the payment of nonservice-connected pension benefits. 38 U.S.C. §§ 101, 1501, 1521, 1522, 5107 (West 2014); 38 C.F.R. §§ 3.102, 3.263, 3.274, 3.275 (2017). REASONS AND BASES FOR FINDINGS AND CONCLUSION Pursuant to 38 U.S.C. § 1521(a), improved (nonservice-connected) pension is a benefit payable by VA to a Veteran of a period of war who is permanently and totally disabled from nonservice-connected disability not the result of the Veteran's willful misconduct. Basic entitlement exists if, among other things, the Veteran meets certain net worth and annual income requirements. 38 U.S.C. §§ 1513, 1521; 38 C.F.R. § 3.3. VA law and regulations governing pension provide that pension shall be denied or discontinued when the net worth of the Veteran is such that, under all the circumstances, including consideration of annual income, it is reasonable that some part of the corpus of the net worth be consumed for the Veteran's maintenance. 38 U.S.C. § 1522(a); 38 C.F.R. § 3.274(a). The term "net worth" means 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. §§ 3.263 (b), 3.275(b). In determining whether net worth should be used for the Veteran's maintenance, factors to be considered include: whether the property can be readily converted into cash at no substantial sacrifice; life expectancy; the number of dependents; and, the potential rate of depletion, including spending due to unusual medical expenses. 38 C.F.R. § 3.275(d). What constitutes excessive net worth is a question of fact for resolution after consideration of the facts and circumstances in each case. See Live Manual M21-1MR, Part V, subpart i, Chapter 3, Section A.1.d. Notably, the pension program is intended to afford beneficiaries a minimum level of security, and is not intended to protect substantial assets or build up the beneficiary's estate for heirs. Id. When the totality of the circumstances indicates that the corpus of the estate of a Veteran are large enough that it would be reasonable to consume a part of the corpus for the Veteran's maintenance, the law provides that pension benefits should not be paid. 38 U.S.C. § 1522; 38 C.F.R. § 3.274(a). Net worth is an eligibility factor which must be considered prior to the award, or prior to the continuance of an award, of a VA nonservice-connected pension. Persons who possess a certain level of financial resources may not be awarded such pensions. There are no precise guidelines, however, that establish what amount of net worth would preclude the payment of a VA pension. The standard is reasonableness. In the absence of contradictory information the claimant's statement as to ownership and estimate of value will be accepted. 38 C.F.R. § 3.263(a). In a July 2015 rating decision, the RO granted entitlement to special monthly pension benefits based on the need for aid and attendance, effective July 10, 2015. See generally 38 U.S.C. § 1521 (providing criteria for entitlement to pension based on need for aid and attendance). A net worth determination dated September 2015, indicated that the Veteran was 89 years old with a life expectancy of 4.7 years. See Live Manual M21-1MR V.iii.1.J.6.a. Total assets were declared at $71,869.26, which included $60,822.12 in his money market account and $11,035.39 in his checking account. Income included social security of $1,621.90 per month and pension of $1,802.94 per month. See July 2015 correspondence. The Veteran's total annual income was $41,119.92 The Veteran's expenses included $3,900 per month for his assistance living, $104.90 per month for Medicare, $25 per month for food, $35 per month for a telephone bill, $50 per month for clothing, and $125 per month for transportation. Notably, in the September 2015 Corpus of Estate Determination the total of the Veteran's cost of his assisted living ($3,900) and Medicare ($104.90) were jointly listed as his monthly medical expense of $4,004.90. The Veteran's monthly expenses totaled $4,239.90. The combined monthly annual income was calculated at $41,119.92 and expenses totaled $50,878.80, leaving an annual deficit of $9,758.88. The RO found that based on the Veteran's net worth of $71,869.26, it would take 7.36 years to deplete his net worth. In the November 2015 notice of disagreement, the Veteran's daughter indicated that some of the Veteran's expenses were omitted. Specifically, the additional expenses to be considered were (1) federal tax income expense of $2,078 for the year, (2) the Veteran's medical insurance cost $259 a month or $3,108 for the year (3) express scripts costing $59.90 per month, and (4) co-pays for prescriptions averaging $40 a month. The Veteran's total monthly expense with the additional medical expenses totaled $4,594.80. Subtracting the Veteran's federal tax expense of $2,078 from his previously reported net worth of $71,869.26, the Veteran's adjusted net worth was $69,791.26. With the Veteran's additional medical expenses, his annual expenses totaled $55,137.60. With the additional annual medical expense, the Veteran's annual deficit was adjusted to $14,017.68 (his annual expenses of $55,137.60 minus his annual income of $41,119.92). Based on the Veteran's adjusted net worth of $69,791.26, it would now take 4.97 years to deplete his net worth. As previously stated, the Veteran has a life expectancy of 4.7 years. The Veteran has not reported any additional expenses prior to May 1, 2017, that were not considered. Notably, in his May 2017 application, the Veteran reported that there was a change in his housing cost. However, the letter he submitted included the same $3,900 monthly assessment that had already been previously considered. See May 2017 Correspondence. Notably, the most significant difference in the Veteran's reported expenses for his May 2017 application for non service-connected pension is the value of his assets. Specifically, his money market account previously valued at $60,822.12 is no longer listed in his statement of net worth. Given this information the Board finds that prior to May 1, 2017, the Veteran's net worth precludes the payment of nonservice-connected pension benefits. The Board has considered the Veteran's daughter's statements that the life expectancy table is not accurate. See April 2016 VA Form 9. However, the Board is governed by VA regulations and is bound by the life expectancy table. Live Manual M21-1MR V.iii.1.J.6.a. The Board has also considered the assertion that funeral expenses average between $7,000 and $10,000 and were not considered. See April 2016 VA Form 9. However, funeral expenses are not part of the consideration for net worth nonservice connected pension purposes. Notably, burial benefits are a separate benefit available to specific family members upon death of a Veteran. See 38 C.F.R. §§ 3.1700-3.1703. The Board acknowledges that the Veteran is not expected to completely exhaust assets for the purpose of establishing entitlement to nonservice-connected pension benefits. The purpose of the pension program is to aid Veterans and their dependents who are unable to provide themselves the basic necessities. The law makes it clear that the award of a nonservice-connected pension, unlike many other VA benefits, is contingent upon the claimant meeting certain financial requirements. 38 U.S.C. § 1522. As noted above, the standard by which the Board is to determine whether the net worth can be consumed to provide for maintenance is one of reasonableness. While there may be some depletion of the appellant's financial resources, the Board emphasizes that the purpose of VA pension benefits is to give beneficiaries a minimum level of financial security. They are not intended to protect substantial assets, subsidize discretionary spending, or build up the beneficiary's estate. In light of the above, the Board finds that, for the appeal period prior to May 1, 2017, the Veteran did not meet the net worth eligibility requirement for pension benefits. The Board has considered the doctrine of reasonable doubt. However, the preponderance of the evidence is against the claim, and the benefit-of-the-doubt doctrine does not apply. 38 U.S.C. § 5107 (b); Gilbert v. Derwinski, 1 Vet. App. 49 (1990). Pension benefits for the period prior to May 1, 2017 are thereby precluded. 38 U.S.C. §§ 1503, 1541, 1542, 5103A; 38 C.F.R. §§ 3.2, 3.3, 3.23, 3.271, 3.272, 3.274, 3.275. ORDER Prior to May 1, 2017, the Veteran's net worth is a bar to the receipt of pension entitlement; the appeal, for this period, is denied. ____________________________________________ R. FEINBERG Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs