Citation Nr: 20041982 Decision Date: 06/19/20 Archive Date: 06/19/20 DOCKET NO. 16-16 144 DATE: June 19, 2020 ORDER The reduction of Veteran’s nonservice-connected pension benefits from $1,072 to $349, effective February 1, 2015, was improper; pension benefits of $1,072 per month are restored, effective February 1, 2015. FINDINGS OF FACT 1. On March 3, 2015, the Veteran informed the Department of Veterans Affairs (VA) on a Supplemental Income Questionnaire that he began receiving income from the Social Security Administration (SSA) in January 2015. 2. On March 23, 2015, the VA Regional Office (RO) in Manila, the Republic of the Philippines, issued the Veteran a letter proposing a reduction of his pension benefits from $1,072 to $349 per month. The letter indicated that the Veteran had 60 days to submit evidence to demonstrate that this proposed action should not be taken. 3. On April 9, 2015, VA reduced the Veteran’s pension benefits to $349 per month, prior to the expiration of the 60-day period. CONCLUSION OF LAW The reduction of the Veteran’s nonservice-connected pension benefits from $1,072 to $349, effective February 1, 2015, was improper; pension benefits of $1,072 per month are restored. 38 U.S.C. § 1521, 5112; 38 C.F.R. §§ 3.3, 3.23, 3.29, 3.32, 3.105, 3.271, 3.272, 3.273. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty from October 1972 to October 1977 in the United States Navy. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from an April 2015 decision of the Department of Veterans Affairs (VA) Regional Office (RO) in Manila, the Republic of the Philippines that reduced the Veteran’s pension payment from $1,072 to $349 per month, effective February 1, 2015. Jurisdiction of the Veteran’s claims file currently resides with the Philadelphia, Pennsylvania Pension Center. Thereafter, in January 2019, the Board remanded the case for further development. The case has returned to the Board for appellate review. Reduction in Pension Basic entitlement to nonservice-connected pension benefits exists if, among other requirements, a veteran’s income is not more than the applicable maximum annual pension rate (MAPR) specified in 38 C.F.R. § 3.23, as changed periodically and reported in the Federal Register. See 38 U.S.C. § 1521; 38 C.F.R. §§ 3.3(a)(3), 3.23(a), (b), (d)(4). The MAPR is published in Appendix B of VA Manual M21-1 (M21-1) and is to be given the same force and effect as if published in VA regulations. See 38 C.F.R. § 3.21. The MAPR is adjusted from year to year. If the applying veteran’s income is less than the MAPR, VA will pay benefits to bring his or her income up to that level. If the veteran’s income exceeds the MAPR, pension benefits are not warranted. Payments from any kind from any source shall be counted as income during the 12-month annualization period in which received, unless specifically excluded under 38 C.F.R. § 3.272. See 38 C.F.R. § 3.271. SSA payments are not excluded under 38 C.F.R. § 3.272. Therefore, they are considered countable income for pension purposes. Comparatively, 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). Whenever there is a change in a veteran’s income, the MAPR will be reduced by the new annualized income effective on the date of the change in income, dividing the remainder by 12. 38 C.F.R. § 3.273(b)(2). The due process requirements for a reduction in pension benefits as a result of a change in income are outlined in 38 C.F.R. § 3.105(h). The AOJ must first issue an administrative action proposing the reduction and setting forth all material facts and reasons for the reduction. The veteran must then be given a period of 60 days within which he or she may submit additional evidence or request a predetermination hearing. If additional evidence is not received in that period, a final administrative action may be taken to effectuate the reduction. 38 C.F.R. § 3.105(h). Where a reduction of a running pension award is warranted due to an increase in income, the reduction shall be made effective the end of the month in which the increase occurred. See 38 U.S.C. § 5112(b)(4)(A); 38 C.F.R. § 3.660(a)(2). In the instant case, VA was made aware of the Veteran’s receipt of SSA benefits on March 3, 2015. Later, on March 23, 2015, a VA RO issued an administrative action to the Veteran via letter proposing the reduction of his pension benefits. As recounted above in the Findings of Fact section, the Veteran was informed that he had 60 days from the date of notification to submit evidence demonstrating that this reduction should not occur. Although the Veteran spoke with a VA employee on April 1, 2015 expressing his understanding that a reduction was to occur due to his receipt of SSA income, the decision reducing his pension benefits from $1,072 to $349 was effectuated on April 9, 2015, prior to the expiration of the 60-day period required by 38 C.F.R. § 3.105(h). Accordingly, the April 9, 2015 reduction was contrary to the Veteran’s due process rights and was improper. Thus, the Board restores his monthly pension benefits of $1,072, effective February 1, 2015. S.C. KREMBS Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board N.S. Pettine, 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.