Citation Nr: 1813751 Decision Date: 03/08/18 Archive Date: 03/14/18 DOCKET NO. 16-03 896A ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Milwaukee, Wisconsin THE ISSUE Entitlement to payment of survivor's pension benefits, to include special monthly pension (SMP) based on the need for regular aid and attendance. ATTORNEY FOR THE BOARD K. M. Schaefer, Counsel INTRODUCTION The Veteran served on active duty from May 1943 to February 1946. He died in June 2004 at the age of 80. The appellant is the Veteran's widow. This case comes before the Board of Veterans' Appeals (Board) on appeal of an August 2013 decision by the Department of Veterans Affairs (VA) Pension Management Center in Milwaukee, Wisconsin. 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). FINDING OF FACT The record does not reflect the appellant has excessive net worth so as to preclude the payment of SMP based on the need for regular aid and attendance. CONCLUSION OF LAW The criteria for the payment of survivor's pension benefits, to include SMP based on the need for regular aid and attendance, have been met. 38 U.S.C. §§ 1502, 1521, 1541, 1543 (2012); 38 C.F.R. §§ 3.3, 3.23, 3.27, 3.271, 3.272, 3.274 (2017). REASONS AND BASES FOR FINDING AND CONCLUSION Death pension benefits are generally available for surviving spouses as a result of a veteran's nonservice-connected death. 38 U.S.C. § 1541(a). A higher rate of death pension is available for a surviving spouse who is in need of regular aid and attendance. 38 U.S.C. § 1541(d)(1); 38 C.F.R. § 3.23(d)(2). An appellant is entitled to such benefits if the veteran served for 90 days or more, part of which was during a period of war; or if the veteran served during a period of war and was discharged from service due to a service-connected disability or had a disability determined to be service-connected, which would have justified a discharge for disability; and if the claimant meets specific income and net worth requirements. 38 U.S.C. § 1541; 38 C.F.R. § 3.3(b)(4), 3.274. In this case, the Veteran had qualifying service of 90 days during a period of war. The evidence establishes that the appellant is the Veteran's surviving spouse and in need of aid and attendance. The last element to determine is whether the appellant's net worth and/or annual income amounts make her ineligible for the claimed benefits. In order to receive benefits, a claimant must meet the net worth requirements found in 38 C.F.R. § 3.274 and not have an annual income in excess of the maximum annual pension rate (MAPR) as specified in 38 C.F.R. § 3.23. See 38 U.S.C. §§ 1502, 1521(j); 38 C.F.R. §§ 3.3(a), 3.23, 3.274. In determining annual income, all payments of any kind or from any source are counted as income during the 12-month annualization period in which received unless specifically excluded. 38 C.F.R. § 3.271(a). Recurring income, received or anticipated in equal amounts and at regular intervals such as weekly, monthly, quarterly and which will continue throughout an entire 12-month annualization period, will be counted as income during the 12-month annualization period in which it is received or anticipated. 38 C.F.R. § 3.271(a)(1). Nonrecurring income, received or anticipated on a one-time basis during a 12-month annualization period, will be counted as income for a full 12-month annualization period following receipt of the income. 38 C.F.R. § 3.271(a)(1), (3). Social Security benefits are not specifically excluded under 38 C.F.R. § 3.272; such income is therefore included as countable income. In computing a claimant's annual income, a fraction of a dollar will be disregarded for the purpose of determining entitlement to monthly payments of pension and dependency and indemnity compensation. 38 C.F.R. § 3.260(g). The following are excluded from countable income for the purpose of determining entitlement to pension: welfare; maintenance; VA pension benefits; payments under Chapter 15, including accrued 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); medical expenses that are in excess of five percent of the MAPR; expenses of last illnesses, burials and just debts, and various other inapplicable items. 38 C.F.R. § 3.272. "Reasonable Maintenance" includes not only housing, food, clothing, and medical care sufficient to sustain life, but such items beyond the bare necessities as well as other requirements reasonably necessary to provide those conveniences and comforts of living suitable to and consistent with a reasonable mode of life. See 38 C.F.R. § 3.250(b)(1). Pension will be denied when the corpus of the estate is such that under all the circumstances, including consideration of annual income, it is reasonable that some part of the corpus of such estate be consumed for the surviving spouse's maintenance. See 38 U.S.C. § 1543(a)(1); 38 C.F.R. § 3.274 (c). The terms "corpus of estate" and "net worth" are interchangeable, and mean the market value, less mortgages or other encumbrances, of all real and personal property owned by the appellant, except the appellant's dwelling (single family unit), including a reasonable lot area, and personal effects suitable to and consistent with the appellant's reasonable mode of life. See 38 C.F.R. § 3 275(b). In determining whether some part of the estate should be used for the appellant's maintenance, factors to be considered along with the appellant's income 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. See 38 C.F.R. § 3.275(d). The MAPR is published in appendix B of the Veterans Benefits Administration Manual M21-1 and is to be given the same force and effect as published in VA regulations. 38 C.F.R. § 3.21. In the present case, the MAPR for an otherwise eligible claimant, without a dependent child, and with aid and attendance, for 2013, the year during which the appellant filed the present claim, is $13,563.00. VA Manual M21-1, Part I, Appendix B. At the time the appellant filed her claim in April 2013, she had a life expectancy of 7.5 years. See VA ADJUDICATION PROCEDURE MANUAL, M21-1MR, Part V, iii, Ch. 1, Section J (Life Expectancy Table for Net Worth Determinations). Initially, the Board finds that the appellant's net income does not exceed the MAPR for a claimant without dependents in need of aid and attendance. In 2013, the year she filed the claim, she reported pension benefits of $556 per month, and the Social Security Administration (SSA) stated that her full monthly payment beginning in December 2012 was $1,515. Thus, her monthly income was $2,071 for an annual income of $24,852. From this amount, the Board subtracts medical expenses in excess of five percent ($678.15) of the MAPR. The appellant's monthly medical expenses include $104.90 in medical insurance premiums, $850 in caregiver expenses, and $50 for incontinence. She also stated that from April 3, 2013, through April 30, 2014, she had other medical expenses (prescriptions, copays, etc.) totalling $1,523.00, which yields a monthly amount of $117.15 when divided by 13 months and a total of $1,405.85 for a 12-month period. The appellant's medical expenses, therefore, for 2013 were $13,464.65, which when subtracted from her income of $24,852, results in an income of $11,387.35, below the MAPR of $13,563.00. Thus, she meets the annual income requirement to be eligible for payment of survivor's pension with aid and attendance. Therefore, the Board's analysis turns to the question of net worth. In denying the claim, the RO appears to have not deducted the appellant's medical expenses from her income when assessing whether her expenses exceeded her net worth. In July 2013, she reported having assets of $28,244 in cash and interest-bearing bank accounts, and $71,989 in stocks, bonds, and mutual funds. Her total assets were $100,233. In June 2015, on a VA Form 21-8049, Request for Details of Expenses, the appellant indicated that her 2013 monthly expenses included $750 for food, $605 for utilities, $129 for property taxes, $150 for clothing, $80 for gas for the car, $60 for car insurance, $27 for life insurance, $126 in property insurance, $180 for property maintenance, $100 for household items and toiletries, and $595 in credit card payments. She also listed a student loan payment of $346, which appears to actually belong to her daughter, who is her caregiver and not a dependent; therefore, that expense is not eligible for consideration. A car loan payment of $220 was noted to have started in February 2014, and so is not considered an expense for 2013. Based on this information, the appellant's monthly medical expenses totaled $1,122.05 (Medicare premiums and co-pays, caregiver expenses, and incontinence products), and her other expenses totaled $2,802 (food, utilities, property taxes, clothing, gas, car insurance, life insurance, property insurance, property maintenance, household items and toiletries, and credit card payments). Her total monthly expenses for 2013 were $3,924.05. Thus, her monthly expenses for 2013 as reported exceed her monthly income ($2,071) by $1,852.05. As noted above, at the time the appellant filed her claim, her life expectancy was 7.5 years or 90 months. Over the course of 90 months, her expenses would exceed her income by a total of $166,774.50, which in turn exceeds her reported assets in $100,233. The appellant also provided expense reports for 2014 and 2015 which show an overall increase in non-medical expenses each year. Notably, the appellant's credit card payments increased to $980 in 2014 and $1135 in 2015, but her medical expenses as reported in June 2015. Her assets decreased from $100,233 in 2013 to $83,138 in 2015. Her total expenses in 2015 were $4,718, while her income remained largely unchanged. Her life expectancy at that time was approximately 6.6 years or 79.2 months, but at that rate of expenditure, her assets of $83,138 would have been consumed in approximately 17 months or by December 2016. Indeed in December 2017, the appellant submitted past due notices for medical care received in 2017. The Board questions some of the appellant's claimed expenses. For example, $750 per month for food for one person seems excessive, and the Board questions, without documentation, the nature and use of utilities that cost $600 or more per month. Given the appellant's reporting the student loan payment for her daughter as an expense, this suggests that her food and utility expenses include the needs of her daughter as well. Moreover, her credit card debt increased steadily over time while her assets also decreased. She has also identified certain expenses, such as the necessity of a complete bathroom remodel completed in 2014. The beneficiaries of this benefit are entitled to manage finances as they sees fit, but the purpose of the pension program is to aid veterans and their dependents who are unable to provide themselves with basic necessities and not to protect wealth. However, even if the Board assumes that half of the appellant's food and utility costs were incurred by her daughter, her monthly expenses exceeded her income throughout the period of the claim. Her monthly expenses would have been $3,249.05 or $1,178.05 more than her monthly income. Over the course of 7.5 years, her total expenses would be $106,024, greater than her $100,233 in assets. In light of the above analysis and affording all reasonable doubt to the appellant, the Board finds that her net worth is not a bar to survivor's benefits in this case. While some of the expenses seem excessive for a single person (food, utilities) and rising credit card debt is noted, the majority of her expenses are associated with her basic needs and medical expenses. Therefore, the appeal is granted. ORDER Payment of survivor's pension benefits, to include SMP based on the need for regular aid and attendance is granted. ____________________________________________ L. HOWELL Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs