Citation Nr: 19133369 Decision Date: 04/30/19 Archive Date: 04/29/19 DOCKET NO. 18-08 843 DATE: April 30, 2019 ORDER Entitlement to nonservice-connected death pension benefits is granted. FINDINGS OF FACT 1. The Veteran died in June 2016 and the appellant, his surviving spouse, filed a claim for nonservice-connected death pension benefits in August 2016. 2. The appellant’s monthly expenses for her assisted living facility qualify as medical expenses for purposes of nonservice-connected pension benefits. 3. During at least the initial annualization period from June 2016 through June 2017, the appellant’s countable annual income (i.e. total income minus allowable exclusions) was less than the applicable maximum annual pension rates (MAPRs) for death pension benefits during that period. CONCLUSION OF LAW The criteria for nonservice-connected death pension benefits are met. 38 U.S.C. §§ 1503, 1541; 38 C.F.R. §§ 3.3 (b)(4), 3.21, 3.23, 3.263(b), 3.271, 3.272, 3.274(c), 3.275. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty from January 1951 to January 1955. He died and the appellant is his surviving spouse. This matter comes before the Board of Veterans’ Appeals (Board) from a June 2017 decision. As a final preliminary matter, the Board notes that in April 2019 the appellant submitted a motion to advance this case on the docket due to serious illness and advanced age (the appellant is 84 years old). This motion is granted and the Board has advanced the case on the docket. 38 C.F.R. § 20.900 (c). Entitlement to nonservice-connected death pension benefits The Board finds, for the following reasons, that entitlement to nonservice-connected death pension benefits is warranted. 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). An appellant is entitled to such benefits if a veteran served for 90 days or more, part of which was during a period of war; or, if a 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). A surviving spouse who meets these requirements will be paid the maximum rate of death pension, reduced by the amount of countable income. 38 U.S.C. § 1541; 38 C.F.R. § 3.23. In determining income for this purpose, payments of any kind from any source are counted as income during the 12-month annualization period in which received unless specifically excluded. 38 U.S.C. § 1503; 38 C.F.R. § 3.271. 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 except for listed exclusions. 38 U.S.C. § 1503 (a); 38 C.F.R. § 3.271 (a). Exclusions from income include the expenses of the Veteran’s last illness and burial, to the extent that such burial expenses are not reimbursed under chapter 23 of title 38 U.S.C., if paid by the appellant. 38 C.F.R. § 3.272 (h). Such expenses may be deducted only for the 12-month annualization period in which they were paid. Id.. Medical expenses in excess of five percent of the maximum income rate allowable may also be excluded from an individual’s income for the same 12-month annualization period, to the extent they were paid. 38 C.F.R. § 3.272 (g)(1)(iii). However, exclusions from income do not include Social Security benefits. 38 C.F.R. § 3.272. That income is therefore included as countable income. The rates of death pension benefits (MAPR) are published in tabular form in appendix B of Veterans Benefits Administration Manual M21-1 (M21-1) and are given the same force and effect as if published in the Code of Federal Regulations. 38 C.F.R. § 3.21. Although the Adjudication Manual is generally not binding on the Board, DAV v. Sec’y of Veterans Affairs, 859 F.3d 1072, 1077 (Fed. Cir. 2017) (“The M21-1 Manual is binding on neither the agency nor tribunals”), here, where VA regulations specifically provide that the Manual provisions are the equivalent of regulations, the Board will apply them. Pension payable to a surviving spouse shall be denied or discontinued when the corpus of the estate of the surviving spouse 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. 38 C.F.R. § 3.274 (c). 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 (single family unit), including a reasonable lot area, and personal effects suitable to and consistent with the claimant’s reasonable mode of life. See 38 C.F.R. §§ 3.263 (b), 3.275(b). In determining whether the estate should be used for the claimant’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. See 38 C.F.R. § 3.275 (d). The considerations concerning net worth as an eligibility factor for pension, as set forth above, are necessary since it is inconsistent with the pension program to allow a claimant to collect a pension while simultaneously enjoying the benefit of a sizable estate. There are no precise guidelines, however, which establish what size estate would preclude the payment of pension. In this case, the Veteran died in June 2016 and the appellant filed a claim for death benefits in August 2016. The Veteran served on active duty from January 1951 to January 1966 during the Korean Conflict era. Therefore, he served for more than 90 days during a period of war and entitlement to nonservice-connected death pension benefits in this case depends upon the appellant’s specific income and net worth. 38 U.S.C. § 1541; 38 C.F.R. § 3.3 (b)(4). As pertinent to this case, for a nonservice-connected death after separation from service, where a claim is received on or after December 10, 2004, the effective date for an award of pension will be the first day of the month in which the Veteran’s death occurred if the claim is received within one year after the date of death; otherwise, the effective date is the date the claim was received. 38 U.S.C. § 5110 (a); 38 C.F.R. § 3.400 (c)(3). In this case, the appellant’s claim was received in August 2016, within one year of the Veteran’s death in June 2016. Therefore, the initial annualization period in which income and expenses will be counted extends from the date of alleged entitlement (i.e., the date of the Veteran’s death in June 2016) through the end of the month that is 12 months after that date (i.e., June 30, 2017). After the initial year, income counting periods for irregular income and medical expenses coincide with the calendar year. Income is reported on a calendar-year basis. As for the MAPRs that were in effect during the initial annualization period in this case, the MAPR for a surviving spouse with no dependents was $8,630 from December 1, 2014 through November 30, 2016. Five percent of this MAPR is $432. The MAPR for a surviving spouse with no dependents, effective from December 1, 2016, was $8,656. Five percent of this MAPR is $433. See 38 C.F.R. § 3.23 (a)(5); M21-1, Part I, Appendix B, Section A. The Board points out that there is not a complete picture of the appellant’s financial situation for the periods following the initial annualization period. Regardless, the Board will consider her financial information during the initial annualization period to determine whether entitlement to nonservice-connected pension benefits is warranted at the time of her August 2016 claim. In her August 2016 claim (VA Form 21-534EZ), the appellant reported a total monthly work-related pension income of $814. She also reported monthly Social Security Administration (SSA) income. Information received from the SSA confirms that during the initial annualization period, her monthly SSA income was $1,511, from June 1, 2016 through November 30, 2016, and $1,515, from December 1, 2016. She did not report any other income. Her pertinent expenses during the initial annualization period included a monthly supplemental medical insurance premium of $109 (as verified by SSA), a monthly secondary health insurance premium of $126 for insurance through the Sheet Metal Workers International Health Fund, and a monthly fee for an assisted living facility ($2,057 during the period from June 2016 through December 2016 and $2,119 during the period from January 2017 through May 2017). Furthermore, the appellant’s estimated net worth was between approximately $16,500 and $21,300 and consisted solely of money in a bank account. (Note: the figures noted above, and in the paragraphs that follow, have been rounded). The appellant also submitted a statement of expenses related to the Veteran’s burial from a funeral home which shows a balance of $7,730. In its June 2017 decision, the AOJ explained that the appellant had already been awarded burial benefits in the amount of $300 and that the remaining balance was billed to M.J. and not the appellant. It is otherwise unclear how much, if any, of the remaining funeral expenses were paid by the appellant. Nevertheless, even if it is assumed that the appellant did not pay the remaining burial expenses, she still meets the income requirements for nonservice-connected pension benefits, as explained below. The appellant’s main contention is that she meets the income requirements for nonservice-connected pension benefits because the monthly expenses related to the assisted living facility in which she resides are medical expenses. Payments for assistance with activities of daily living (ADLs) and instrumental activities of daily living (IADLs) are medical expenses, regardless of whether the provider is a health care provider, if the disabled individual is receiving health care or custodial care in a facility and either (1) the disabled individual is determined by rating to require aid and attendance or housebound; or (2) a physician, physician assistant, certified nurse practitioner, or clinical nurse specialist states in writing that, due to a physical, mental, developmental, or cognitive disorder, the individual needs to be in a protected environment. Payments for meals and lodging (and other facility expenses not directly related to health care or custodial care) are medical expenses if (1) the facility provides or contracts for health care or custodial care for the disabled individual or (2) a physician, physician assistant, certified nurse practitioner, or clinical nurse specialist states in writing that the individual must reside at the facility (or a similar facility) to separately contract with a third-party provider to receive health care or custodial care or to receive (paid or unpaid) health care or custodial care from family or friends. VA’s Adjudication Procedure Manual (M21-1, Part V, Subpart iii, Chapter 1, Section G, Paragraph 3(k) (March 22, 2019). Custodial care means regular supervision because a person with a physical, mental, developmental, or cognitive disorder requires care or assistance on a regular basis to be protected from hazards or dangers incident to his or her daily environment or assistance with two or more ADLs. M21-1, Part V, Subpart iii, Chapter 1, Section G, Paragraph 3(f) (March 22, 2019). ADLs are basic self-care activities, consisting of bathing or showering, dressing, eating, getting in or out of bed or a chair (transferring), toileting, and ambulating within the home or living area. IADLs are activities other than basic self-care that are needed for independent living. Examples of IADLs include shopping, food preparation, housekeeping, laundering, handling medication, managing finances, using the telephone, and transportation for non-medical purposes. M21-1, Part V, Subpart iii, Chapter 1, Section G, Paragraph 3(g) (March 22, 2019). The Board acknowledges that the VA Adjudication Manual is not binding on the Board, DAV v. Sec’y of Veterans Affairs, 859 F.3d 1072, 1077 (Fed. Cir. 2017) (“The M21-1 Manual is binding on neither the agency nor tribunals”), but it provides useful guidance in this case. In support of her claim, the appellant submitted an August 2016 “Examination for Housebound Status or Permanent Need for Regular Aid and Attendance” form (VA Form 21-2680) completed by a physician which reveals that she resided at an assisted living facility and that her activities and functions were limited by anxiety and gait instability. She was not able to prepare her own meals due to an unsteady gait and poor balance, she required hands-on assistance with bathing and tending to other hygiene needs due to unsteadiness, she required reminders to take her medication properly, and she was unable to manage her own financial affairs because she was anxious and became easily overwhelmed. Overall, she was housebound and was only able to leave her home once a week with a walker and the assistance of another person. She was diagnosed as having hypertension, anxiety, an abnormal gait, abdominal pain, and constipation. In a May 2017 attendant affidavit, M.J. reported that the appellant required assistance with bathing, standing/sitting, walking, and taking medications. She was unable to live alone and required assistance in almost all daily living skills. A letter from the appellant’s assisted living facility received by VA in July 2017 indicates that the facility’s dietary department delivered the appellant’s evening meal on a daily basis because it was difficult for her to get to the dining room. She had special dietary needs which were communicated to the facility by her physician, and facility staff cleaned her apartment twice per month. In a July 2017 statement attached to the appellant’s notice of disagreement, the appellant’s daughter reported that the appellant had a part-time caregiver who provided grocery shopping services on a weekly basis and accompanied the appellant to medical appointments. The appellant lived in an assisted living facility and the facility delivered her dinner on a daily basis, cleaned her apartment twice per month, and monitored her life alert button and responded to her apartment if needed to assess whether emergency services were required. Also, the appellant received care from a podiatrist and her physician who had office hours in her building, and she received other medical services (blood work, portable x-rays) in her apartment. In a May 2018 letter, physician M. Kohli, MD FACP reported that the appellant was not able to live on her own in a regular apartment in the community with or without assistance. She was living in a senior living community and was housebound unless she received the services of a caretaker. Her building was secure and had locked doors which met ADA requirements. Also, the halls had railings for supported walking and meals were prepared for and delivered to the appellant. In light of the above evidence which reflects that the appellant requires assistance with ADLs and IADLs due to disability, that she must reside in a protected environment due to disability, and that she receives custodial care at her assisted living facility, the Board finds that the monthly expenses payable to the appellant’s assisted living facility qualify as medical expenses for the purposes of nonservice-connected pension benefits. Overall, the appellant’s income during the initial annualization period was approximately $27,924 (which consisted of 12 work-related pension payments of $814, 6 SSA payments of $1,511, and 6 SSA payments of $1,515). Her medical expenses during this period totaled approximately $27,814 (which consisted of 12 supplemental medical insurance premiums of $109, 12 secondary insurance premiums through the Sheet Metal Workers International Health Fund of $126, 7 payments of $2,057 for her assisted living facility, and 5 payments of $2,119 for her assisted living facility). As noted above, the appellant may deduct medical expenses that exceed 5 percent of the MAPRs during the initial annualization period, which are $432 during the period from December 1, 2014 through November 30, 2016 and $433 during the period from December 1, 2016. Therefore, the allowable medical expenses during the initial annualization period were at the very least $27,381 (i.e., $27,814 minus $433). Thus, the appellant’s total yearly income minus the exclusions during the initial annualization period for medical expenses was $542. (Continued on the next page)   As the appellant only reported a net worth of between approximately $16,500 and $21,300 which consisted of money in a back account, her net worth does not constitute a bar to VA death pension benefits because it is not of such size that some portion of it could reasonably be consumed to defray the costs of her maintenance. Thus, since the appellant’s countable income was less than the MAPRs during the initial annualization period beginning in June 2016, the Board concludes that she is entitled to nonservice-connected death pension benefits. Accordingly, the appeal is granted. Jonathan Hager Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD B. Elwood, 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.