Citation Nr: 20006695 Decision Date: 01/28/20 Archive Date: 01/27/20 DOCKET NO. 18-55 437 DATE: January 28, 2020 ORDER The appellant’s countable income was correctly calculated to reflect Social Security Administration (SSA) survivor benefits income and unreimbursed medical expenses from July 1, 2017 to January 1, 2019, and thereafter. FINDING OF FACT The appellant’s countable income exceeded applicable maximum annual pension rates beginning on January 1, 2019. CONCLUSIONS OF LAW 1. SSA survivor benefits income the appellant received in 2019 constituted countable income for pension purposes, and the appellant’s death pension payments were appropriately reduced as a result of receipt of these payments. 38 U.S.C. § 1541; 38 C.F.R. §§ 3.3, 3.23, 3.271, 3.272, 3.273. 2. Termination of the appellant’s death pension benefits, effective January 1, 2019, based on excessive income, was proper. 38 U.S.C. § 1541; 38 C.F.R. §§ 3.3, 3.23, 3.31, 3.271, 3.272, 3.273. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty from September 1944 to February 1946. He was awarded the Asiatic-Pacific Theatre Ribbon with one Bronze Campaign Star, Combat Infantryman Badge, Purple Heart, World War II Victory Ribbon, and American Theater Ribbon. He died in June 2017 at the age of 91. The appellant is the Veteran’s surviving spouse. This case comes before the Board of Veterans’ Appeals (Board) on appeal of an August 2017 decision by the Department of Veterans Affairs (VA) Pension Management Center (PMC). On August 21, 2018, the Board received from the appellant a motion for advancement on the docket based on her age. As the appellant was born in May 1928, she meets the criteria for AOD based on advanced age. See 38 C.F.R. § 20.900(c)(1). 38 U.S.C. § 7107(a)(2). Therefore, the motion to advance the appeal on the Board’s docket is granted. Whether VA correctly paid Survivor’s Pension benefits based on income and medical expenses used. 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. § 1521; 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 claimant. 38 U.S.C. §§ 1503, 1521; 38 C.F.R. §§ 3.3, 3.23(b). 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). SSA disability and survivor benefits are not excludable from countable income, but welfare benefits, such as SSI, are excludable from countable income. See 38 C.F.R. § 3.272; see also VA ADJUDICATION PROCEDURE MANUAL (M21-1), Part V.iii.1.B.1.k. 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). 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, VA 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). By way of background, in August 2017, the PMC approved the appellant’s claim for death pension with payments to begin on July 1, 2017. The PMC indicated that based on the appellant’s countable income of $12,723, which exceeded the $8,656 maximum income limit for a surviving spouse with no dependents for 2017, benefits would be terminated effective July 1, 2018. The PMC notified the appellant that they must receive evidence of changes in income and/or paid unreimbursed medical expenses that show you are under the income limit of $8,656.00 from July 1, 2018, before January 1, 2020 to protect your entitlement to reinstatement of benefits from July 1, 2018. They also notified the appellant that they must receive evidence of changes in income and/or paid unreimbursed medical expenses for the period of June 6, 2017 through June 30, 2018, before January 1, 2020, to protect entitlement to potential increased benefits effective from the earliest possible date. In February 2018, the PMC notified the appellant that information received from the Social Security Administration (SSA) indicated that her income effective December 1, 2017 increased by 2 percent and that her VA death pension benefits were terminated because her 2018 income countable for VA purposes of $12,741.00 exceeded the 2018 maximum annual pension rate of $8,830.00 for a surviving spouse with no dependents. In an August 2018 Medical Expense Report, the appellant provided an itemization of expenses related to transportation for medical purposes. She listed the medical facilities to which she traveled to, including the roundtrip mileage, and amount she paid for prescription co-pays and other medical expenses from January to July 2018. Based on this information, as noted in an October 2018 notification letter and Statement of the Case, the PMC adjusted the appellant’s death pension benefits and granted a $171 monthly entitlement from July 1, 2018 to January 1, 2019. The PMC noted that the appellant’s’ total countable income included her annual Social Security income of $7,452 from July 1, 2017; her annual Social Security income of $13,584 from August 1, 2017 to December 1, 2017; her annual Social Security income of $13,860 from December 1, 2017; and the $255 SSA lump sum burial benefit from July 1, 2017 to July 1, 2018. The PMC determined that based on medical expenses of $5,193, her countable income was reduced to $0 for 2017. Based on medical expenses of $7,256, the appellant’s countable income was reduced to $0 from February 2018 to July 2018. The PMC determined that based on medical expenses of $7,526, her countable income was reduced to $6,775 from July 1, 2018 to January 1, 2019. However, the PMC also determined that the appellant’s medical expenses in 2019 amounted to $5,460 and included what she pays for premiums and supplemental insurance. The PMC concluded that the appellant’s countable income was reduced to $8,841 as of January 1, 2019 and that this amount exceeded the MAPR for 2019. In December 2018, the appellant submitted documentation and statements of unreimbursed medical expenses in December 2018, March 2019, and April 2019 and her 2017 Social Security benefit statement. However, these medical expenses were for the period from July 1, 2017 through January 1, 2019. In an April 2019 Income and Asset Statement, the appellant reported that she receives $1,052 per month in Social Security benefits and $4,155 per month from an annuity. In an April 2019 Improved Pension Eligibility Verification Report, the appellant reported that she received $14,238 in Social Security benefits as a surviving spouse. In a March 2019 notification letter, the PMC informed the appellant that the Social Security Administration informed them of a cost-of living increase of 2.8 percent effective January 1, 2019, resulting in a monthly payment of $1,186.50. Based on her medical expenses, the appellant’s countable income was $9,165, and exceeded the MAPR of $9,078 for a surviving spouse with no dependents for 2019. The Board finds that the wages earned were correctly used to calculate the appellant’s countable income from 2017 to 2019, and that her survivor’s pension benefits were correctly reduced. Regarding the period beginning January 1, 2019, the Board finds that the appellant’s countable income exceeded applicable MAPR rates and is a bar to receipt of death pension benefits. As previously discussed, the applicable MAPR for a surviving spouse with no dependents when the appellant’s VA survivor’s pension benefits were terminated (January 1, 2019) was $9,078. The Board finds that the SSA benefits the appellant received, which are considered countable income, exceeded the applicable MAPR since January 1, 2019. The Board notes that countable income may be reduced by unreimbursed medical expenses in excess of five percent of the applicable MAPR. However, the appellant has not provided evidence of any such unreimbursed medical expenses for 2019. Accordingly, the Board finds that the appellant’s income is a bar to receipt of death pension benefits beginning January 1, 2019.   In summary, the Board finds that the appellant’s countable income was correctly calculated to reflect her SSA survivor benefits income received in 2019. L. M. BARNARD Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board M. Bilstein, 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.