Citation Nr: 19190813
Decision Date: 12/03/19	Archive Date: 12/03/19

DOCKET NO. 19-04 463
DATE: December 3, 2019

ORDER

The RO correctly calculated the Appellant’s countable income from November 1, 2017 to January 31, 2018 as $9,876; thus, the appeal as to whether VA properly calculated the Appellant’s countable income is denied.  

The Appellant’s countable income from February 1, 2018 to November 30, 2018 is $7410; to the extent the RO calculated a different amount, the appeal is granted.  

The RO correctly calculated the Appellant’s countable income from December 1, 2018 to January 31, 2019 as $8,207; thus, the appeal as to whether VA properly calculated the Appellant’s countable income is denied.  

The Appellant’s countable income from February 1, 2019 is $3,327; to the extent the RO calculated a different amount, the appeal is granted.  

FINDINGS OF FACT

1. From November 1, 2017 to January 31, 2018, the RO correctly calculated the Appellant’s countable income as $9,876.

2. From February 1, 2018 to November 30, 2018, the RO incorrectly calculated the Appellant’s yearly income as $28,332 and countable income as $7,949.  The correct amounts are $27,792 and $7,410, respectively.

3. From December 1, 2018 to January 31, 2019, the RO correctly calculated the Appellant’s countable income as $8,207.

4. From February 1, 2019, the RO incorrectly calculated the Appellant’s unreimbursed medical expenses as $25,038 and countable income as $3,993.  The correct amounts are $25,704 and $3,327, respectively.  

CONCLUSIONS OF LAW

1. The RO correctly calculated the Appellant’s countable income from November 1, 2017 to January 31, 2018.  38 U.S.C. §§ 1503, 1541 (2012); 38 C.F.R. §§ 3.3, 3.23, 3.271, 3.272 (2017).

2. The Appellant’s countable income from February 1, 2018 to November 30, 2018 is $7,410; the RO’s calculation of $7,949 was incorrect.  38 U.S.C. §§ 1503, 1541 (2012); 38 C.F.R. §§ 3.3, 3.23, 3.271, 3.272 (2017).

3. The RO correctly calculated the Appellant’s countable income from December 1, 2018 to February 1, 2019.  38 U.S.C. §§ 1503, 1541 (2012); 38 C.F.R. §§ 3.3, 3.23, 3.271, 3.272 (2017).

4. The Appellant’s countable income from February 1, 2019 to present is $3,327; the RO’s calculation of $3,993 was incorrect.  38 U.S.C. §§ 1503, 1541 (2012); 38 C.F.R. §§ 3.3, 3.23, 3.271, 3.272 (2017).

REASONS AND BASES FOR FINDINGS AND CONCLUSIONS

The Veteran served on active duty from May 1952 to May 1954.  He died in May 1985.  The Appellant is his surviving spouse. 

This matter comes to the Board of Veterans’ Appeals (Board) from a September 2018 rating decision which granted the Appellant a VA survivor’s pension with aid and attendance, effective October 26, 2017.  The Appellant timely appealed the RO’s calculation of her unreimbursed medical expenses and countable income.

In May 2019, the Board remanded the claim for additional development.   

Whether VA correctly calculated the Appellant’s unreimbursed medical expenses and countable income. 

The Appellant contends that the RO miscalculated her unreimbursed medical expenses and countable income for VA purposes. 

Basic entitlement to 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. 38 U.S.C. § 1541; 38 C.F.R. § 3.3(a)(3).  The MAPR is published in Appendix B of the VA Adjudication Procedures Manual M21-1 and is given the same force and effect as if published in VA regulations.  38 C.F.R. § 3.21.  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).

Countable income and excludable expenses are based on 12-month annualization periods for death pension.  38 C.F.R. §§ 3.271, 3.272.  Annualization periods have two types, the initial annualization period and calendar years. After the initial year, countable income is generally based on the calendar year. When the initial annualization period and the first calendar year beginning after the initial award overlap, the greater benefit is awarded.

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).  Income from the Social Security Administration (SSA) is 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.”  38 C.F.R. § 3.272 (g)(1)(iii);

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, the Board 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).

 

November 1, 2017 through January 31, 2018

The RO granted the Appellant entitlement to survivor’s pension from October 26, 2017, or the date of her claim, and is payable from the first month after entitlement is awarded.  As is pertinent for this case, for the initial annualization period, income will be counted from the date of the claim through the end of the month that is twelve months after that day, or October 31, 2018.  

For the period from November 1, 2017 to January 31, 2018, the RO calculated the Appellant’s yearly SSA income as $27,252, with annualized medical expenses of $17,808, resulting in a countable income of $9,876.  The Board notes that the RO did not recalculate the Appellant’s countable income and pension rate after a December 1, 2017, SSA cost of living increase, affording the Appellant a protected rate.  The Board will not disturb this finding.

The evidence of record reflects that as of October 26, 2017, the Appellant was in receipt of monthly SSA income of $2,271, or $27,252 yearly.  

From October 26, 2017 to December 31, 2017, the Appellant reported unreimbursed medical expenses of $218 in Medicare Part B premiums, $124 in private insurance, and $864 on home care, totaling $1,206.  From January 1, 2018, to October 31, 2018, the Appellant reported unreimbursed medical expenses of $1,340 in Medicare Part B premiums, $496 in private insurance, $90 in prescription insurance, $13,020 in assisted living expenses, and $1,656 in home care, totaling $16,602.  Thus, the Appellant’s initial annualized unreimbursed medical expenses from the date of her claim totaled $17,808.  

Unreimbursed medical expenses in excess of five percent of the applicable MAPR (excluding increased pension because of need for aid and attendance or being housebound) are used to reduce countable income.  The MAPR effective December 1, 2016 for a surviving spouse with aid and attendance and without dependents is $13,836.  MAPR without dependents or aid and attendance is $8,656, and five percent of that amount is $432.  See Veterans Benefits Administration, Survivor’s Pension Rate Tables – Effective December 1, 2016 (https://www.benefits.va.gov/PENSION/rates_survivor_pen16.asp).  Therefore, in calculating the Appellant’s countable income, only unreimbursed medical expenses in excess of $432 can be considered. 

In this case, the record reflects that the Appellant had unreimbursed medical expenses of $17,808 from October 26, 2017 to October 31, 2018.  Deducting $432 from $17,808 results in $17,376 in countable unreimbursed medical expenses.

Deducting the amount of countable unreimbursed medical expenses from the Appellant’s income of $27,252 results in countable income of $9,876.

The RO calculated the Appellant’s countable income as $9,876 from November 1, 2017 to January 30, 3018.  Upon review of the record, the Board calculated the Appellant’s countable income as $9,876.  Thus, the RO correctly calculated the Appellant’s countable income from November 1, 2017 to January 31, 2018, and the Appellant’s appeal is denied to this extent.  

February 1, 2018 through November 30, 2018

For the period from February 1, 2018 to November 30, 2018, the RO calculated the Appellant’s yearly SSA income as $28,332 with medical expenses of $20,824, resulting in a countable income of $7,949.    

The evidence of record reflects that from December 2017, the Appellant was in receipt of monthly SSA income of $2316, or $27,792 yearly.

For the 2018 calendar year, the Appellant’s unreimbursed medical expenses included $1608 in Medicare Part B premiums, $496 in private insurance, $180 in prescription insurance, $1800 in home care, and $16740 in assisted living expenses, totaling $20,824. 

The MAPR effective December 1, 2017 for a surviving spouse with aid and attendance and without dependents is $14,113.  MAPR without dependents or aid and attendance is $8,830, and five percent of that amount is $442.  See Veterans Benefits Administration, Survivor’s Pension Rate Tables – Effective December 1, 2017 (https://www.benefits.va.gov/PENSION/rates_survivor_pen17.asp).  Therefore, in calculating the Appellant’s countable income, only unreimbursed medical expenses in excess of $442 can be considered. 

In this case, the record reflects that, the widow had unreimbursed medical expenses of $20,824.  Deducting $442 from $20,824 results in $20,382 in countable unreimbursed medical expenses.

Deducting the amount of countable unreimbursed medical expenses from the Appellant’s income of $27,792 results in countable income of $7,410.  

As demonstrated, the Appellant’s annual income was $27,792 as opposed to the $28,332 amount determined by the RO.  It appears that the RO calculated the Appellant’s income based on a monthly SSA income of $2,361 rather than $2,316.  Thus, the RO incorrectly calculated the Appellant’s income, which resulted in an incorrect countable income of $7,949.  

The Board finds the Appellant’s countable income from February 1, 2018 through November 30, 2018 is $7,410.  This figure must be used in calculating her survivor’s pension benefit.  To this extent, the Appellant’s claim is granted.  

December 1, 2018 through February 1, 2019

For the period from December 1, 2018 to February 1, 2019, the RO calculated the Appellant’s yearly SSA income as $28,578 with medical expenses of $20,824, resulting in a countable income of $8,207.  

On December 1, 2018, the Appellant’s annual income increased due to a cost of living increase in SSA benefits.  Specifically, the Appellant’s monthly SSA income increased to $2381.50, or $28,578 yearly.

As discussed above, the Appellant’s unreimbursed medical expenses for 2018 totaled $20,824.

The MAPR effective December 1, 2018 for a surviving spouse with aid and attendance and without dependents is $14,509.  The MAPR without dependents or aid and attendance is $9,078, and five percent of that amount is $453.  See Veterans Benefits Administration, Survivor’s Pension Rate Tables – Effective December 1, 2018 (https://www.benefits.va.gov/PENSION/current_rates_survivor_pen.asp).  Therefore, in calculating the Appellant’s countable income, only unreimbursed medical expenses in excess of $453 can be considered.  In this case, the record reflects that, the widow had unreimbursed medical expenses of $20,824.  Deducting $453 from $20,824 results in $20,371 in countable unreimbursed medical expenses.

Deducting the amount of countable unreimbursed medical expenses from the Appellant’s income of $28,578 results in countable income of $8,207.  

The RO calculated the Appellant’s countable income as $8,207 from December 1, 2018 to January 31, 2019.  Upon review of the record, the Board calculated the Appellant’s countable income as $8,207.  Thus, the RO correctly calculated the Appellant’s countable income from December 1, 2018 to January 31, 2019, and the Appellant’s appeal is denied to this extent.

February 1, 2019 to present

For the period from February 1, 2019 to the present, the RO calculated the Appellant’s yearly SSA income as $28,578 with medical expenses of $25,038, resulting in a countable income of $3,993.  

As discussed above, the Appellant’s yearly income increased to $28,578 on December 1, 2018. 

For the 2019 calendar year, the Appellant’s unreimbursed and projected medical expenses included $1626 in Medicare Part B premiums, $228 in prescription insurance, $864 in home care, and $22,986 in assisted living expenses, totaling $25,704.

The MAPR effective December 1, 2018 for a surviving spouse with aid and attendance and without dependents is $14,509.  The MAPR without dependents or aid and attendance is $9,078, and five percent of that amount is $453.  Therefore, in calculating the Appellant’s countable income, only unreimbursed medical expenses in excess of $453 can be considered.  In this case, the record reflects that, the widow had unreimbursed medical expenses of $25,704.  Deducting $453 from $25,704 results in $25,251 in countable unreimbursed medical expenses.

Deducting the amount of countable unreimbursed medical expenses from the Appellant’s income of $28,578 results in countable income of $3,327.

As demonstrated, the Appellant’s unreimbursed medical expenses totaled $25,704 as opposed to the $25,038 amount determined by the RO.  It appears that the RO calculated the Appellant’s assisted living expenses as $1,860 per month for the entire year; however, the Appellant reported that April 1, 2019, her assisted living expenses increased to $1,934 per month.  This increase results in yearly assisted living expenses of $22,986.  Thus, the RO incorrectly calculated the Appellant’s unreimbursed medical expenses, which resulted in an incorrect countable income of $3,993.  

The Board finds the Appellant’s countable income from February 1, 2019 is $3,327.  This figure must be used in calculating her survivor’s pension benefit.  To this extent, the Appellant’s claim is granted.

 

 

K. Parakkal

Veterans Law Judge

Board of Veterans’ Appeals

Attorney for the Board	S. Owen, Associate Counsel

The Board’s decision in this case is binding only with respect to the instant matter decided. This decision is not precedential, and does not establish VA policies or interpretations of general applicability. 38 C.F.R. § 20.1303.