Citation Nr: 21061293 Decision Date: 10/01/21 Archive Date: 10/01/21 DOCKET NO. 17-22 036 DATE: October 1, 2021 ORDER Inclusion of $17,358.83 of unreimbursed medical expenses for calendar year 2015 death pension income calculation purposes is denied. FINDING OF FACT Unreimbursed medical expenses of $17,358.83 were paid in December 2014. CONCLUSION OF LAW The criteria for inclusion of $17,358.83 of unreimbursed medical expenses for calendar year 2015 death pension income calculation purposes are not met. 38 U.S.C. §§ 1503, 1541; 38 C.F.R. §§ 3.3, 3.23, 3.271, 3.272, 3.273. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty from March 1946 to August 1947 and from October 1949 to January 1953. He died in November 2013 and the appellant is his surviving spouse. The case is on appeal from a May 2016 decision. In June 2021, the Veteran testified at a Board hearing. The appellant requested the record remain open for 60 days. Thereafter, additional evidence was submitted in July 2021. Waiver of RO consideration of the additional evidence is presumed given the date of the substantive appeal. The Board has limited the discussion below to the relevant evidence required to support its finding of fact and conclusion of law, as well as to the specific contentions regarding the case as raised directly by the Veteran and those reasonably raised by the record. See Scott v. McDonald, 789 F.3d 1375, 1381 (Fed. Cir. 2015); Robinson v. Peake, 21 Vet. App. 545, 552 (2008). Inclusion of $17,358.83 of unreimbursed medical expenses for calendar year 2015 death pension income calculation purposes. Legal Criteria Basic entitlement to pension exists if, among other things, the claimant's income is not in excess of the 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 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, 1541; 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). Income from the Social Security Administration (SSA) is not specifically excluded under 38 C.F.R. § 3.272 and 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). Analysis The appellant contends that $17,358.83 in unreimbursed medical expenses were improperly excluded when calculating income for determining calendar year 2015 death pension benefits. In addition, in an April 2017 VA Form 9, the appellant stated that such medical expenses should have offset an IRA disbursement. The Veteran died in November 2013 and, in a March 2014 decision, the appellant was granted initial pension benefits effective December 2013. Thereafter, the appellant paid $17,358.83 in unreimbursed medical in December 2014. In order to pay for these expenses, the appellant made a one-time withdrawal from an IRA account of $17,360 in December 2014. Subsequently, in an October 2015 decision, the RO included the unreimbursed medical expenses for purposes of calculating the appellant's calendar year 2014 benefits, but included the irregular IRA withdrawal as income for purposes of calculating her calendar year 2015 benefits. The Board finds that the $17,358.83 of unreimbursed medical expenses paid in December 2014 was properly used in calculating the appellant's pension rate for calendar year 2014 rather than the calendar year 2015 pension rate. In this regard, pension income is based on 12-month annualization periods. After the initial 12 month period, income-counting periods for unreimbursed medical expenses and irregular income coincide with the calendar year in which they are occur. In this case, because the appellant's pension began in December 2013 the initial pension year ended in November 2014. As the claimed unreimbursed medical expenses were paid in December 2014, they were properly applied to calendar year 2014 for death pension income calculations. The Board notes that the one-time IRA withdrawal received in December 2014 may have been improperly included in the calendar year 2015 death pension income calculations. However, as the June 2016 notice of disagreement (NOD) did not raise this issue, the March 2017 statement of the case (SOC) did not address it. Therefore, the propriety of inclusion of the one-time IRA withdrawal in the calendar year 2015 death pension income calculations is not before the Board. See 38 C.F.R. §§ 19.21, 19.22. The preponderance of the evidence shows that unreimbursed medical expenses of $17,358.83 were paid in December 2014. Therefore, inclusion of the claimed medical expenses in calendar year 2015 for death pension income calculation purposes is not warranted. RYAN T. KESSEL Veterans Law Judge Board of Veterans' Appeals Attorney for the Board Jimerfield, David 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.