Citation Nr: 19141013 Decision Date: 05/28/19 Archive Date: 05/28/19 DOCKET NO. 17-10 135 DATE: May 28, 2019 ORDER Entitlement to nonservice-connected (NSC) pension with special monthly pension is denied. FINDING OF FACT For the entire appeal period, the Veteran’s countable income exceed applicable maximum annual pension rates (MAPR). CONCLUSION OF LAW The criteria for payment of nonservice-connected pension benefits with special monthly pension have not been met. 38 U.S.C. §§ 1502, 1503, 1521 (2012); 38 C.F.R. §§ 3.23, 3.271, 3.272, 3.273, 3.660 (2018). REASONS AND BASES FOR FINDING AND CONCLUSION Entitlement to nonservice-connected pension Basic entitlement to nonservice-connected disability pension benefits is warranted if all three of the following requirements are met: (1) the Veteran must have served in the active military, naval or air service for 90 days or more during a period of war; (2) the Veteran must be permanently and totally disabled from non-service-connected disability not due to his or her own willful misconduct; and (3) the Veteran must meet the income and net worth requirements found in 38 C.F.R. §§ 3.23 and 3.274. 38 U.S.C. §§ 1502, 1521(j) (2012). Basic entitlement to pension exists only if, among other things, the Veteran’s countable income is not in excess of the maximum annual pension rate specified by law. 38 U.S.C. § 1521 (a). In determining annual income, all payments of any kind or from any source, including salary, retirement or annuity payments, or similar income, shall be included during the twelve-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 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.” See 38 C.F.R. § 3.272 (g)(1)(iii); 38 U.S.C. § 1503 (a)(8). 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). There is no specific dollar limitation on net worth (as opposed to income) that bars an otherwise eligible claimant from receiving pension benefits. Entitlement to pension will be denied however, when the corpus of a veteran’s estate (and that of any spouse) is such that, under all circumstances, including consideration of the annual income of the veteran, his spouse, and any cohabitating children, it is reasonable that some part of the corpus of such estates be consumed for the claimant’s maintenance. 38 U.S.C. § 1522; 38 C.F.R. § 3.274 (a). The terms “corpus of estate” and “net worth” mean the market value, less mortgages or other encumbrances, of all real and personal property owned by the claimant except the claimant’s dwelling and personal effects. 38 C.F.R. § 3.275 (b). The Veteran’s appeal for pension was initially denied based on his countable income. The MAPR for a Veteran with one dependent at the aid and attendance rate in effect in June 2015, the date he filed his claim for pension was $25,448.00. The applicable MAPR rate was increased to $25,525.00 on December 1, 2016, to $26,036.00 on December 1, 2017, and to $26,766.00 on December 1, 2018. The Board finds that the Veteran’s countable income exceeded applicable maximum annual pension rates and is a bar to the receipt of pension benefits. June 2015 and August 2015, and Applications for Pension shows that the Veteran received a monthly income of $1,735.50 from Social Security for himself, $1,146.60 from Social Security for his wife, and his spouse earned $1,000.00 a month in gross wages. The Veteran’s net worth included $417,000.00 in an IRA. In a February 2017 substantive appeal, this was noted to have decreased to $291,000.00. In an August 2016 Improved Pension Eligibility Verification Report, the Veteran provided updated income information for the appeal period from June 2015 to June 2016. In addition to Social Security, he received $32,700.00 from his 401K distribution, and his spouse had earned a total of $17,235.00 in wages for the year. The Board finds the Veteran had an annualized income of $84,520.00 from Social Security benefits, wages earned by his spouse, and 401K distributions. In an August 2016 Medical Expense Report, he identified annual medical expenses totalling $15,910.00 for the appeal period from June 2015. This included $853.24 for miles traveled for hospital, doctor, or medical care (reimbursable at a rate of 41.5 cents per mile); Medicare Part B, Medicare Part D, supplemental and dental insurance for he and his spouse; co-pays for dental visits, vision care, and physical therapy; and amounts paid for prescription and over-the-counter medications. The MAPR was $25,448.00 in June 2015, and was $25,525.00 from December 2016. Therefore, medical expenses in excess of $1,272.00 can be deducted from the annualized income of $84,520.00. From June 2015, the Veteran had a countable income of $69,882.00, well in excess of the applicable MAPR of $25,448.00. The August 2016 Improved Pension Eligibility Verification Report shows that Social Security benefits had increased to $2,314.00 a month for the Veteran and to $1,325.83 a month for his spouse. He received a monthly 401K distribution of $2,725.00 and, at the time, his spouse earned $1,370.00 a month in gross wages. From August 2016, the Veteran had an annualized income of $92,818.00. Updated itemized medical expenses were not provided, but assuming that the Veteram continued to have similar medical expenses as reported for the prior year, the Board finds that countable income continued to exceed applicable the MAPR. (Continued on the next page)   For the entire rating period, the Veteran’s countable income exceeded the applicable maximum annual pension rates. While the Veteran submitted an August 2016 expense report, detailing significant living expenses for housing, food, utilities, and other needs, such expenses are not counted for the purpose of calculating countable income for pension purposes. Therefore, entitlement to nonservice-connected pension with special monthly pension at the aid and attendance rate is denied based on the Veteran’s countable income. Because the Board has denied the claim based on countable income, it is not necessary to additionally address whether his net worth was a bar to the receipt of pension benefits. K. PARAKKAL Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD Christine C. Kung 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.