Citation Nr: 21063720 Decision Date: 10/15/21 Archive Date: 10/15/21 DOCKET NO. 18-39 104 DATE: October 15, 2021 ORDER Entitlement to nonservice-connected death pension benefits as of June 1, 2017 is denied. FINDING OF FACT The Appellant's countable income as of June 1, 2017 exceeded the maximum annual pension rate (MAPR) limit for a surviving spouse without dependents. CONCLUSION OF LAW The criteria for entitlement to payment of nonservice-connected death pension benefits based on the Appellant's countable income as of June 1, 2017 are not met. 38 U.S.C. § 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 in the United States Army from February 1953 to March 1955. The Veteran died on April [REDACTED], 2017. 1. Entitlement to survivor's pension benefits as of June 1, 2017 The appellant contends that the Regional Office (RO) did not properly calculate her income for survivor's pension benefits. Death pension benefits are available for a surviving spouse pursuant to 38 U.S.C. § 1541 (a) and its implementing regulation 38 C.F.R. § 3.3 (b)(4). A surviving spouse is entitled to such benefits if two criteria are met. First, the veteran had qualifying wartime service as defined in 38 C.F.R. § 3.3 (a)(3)(i), (ii), and (iii). Second, the surviving spouse meets the net worth requirements of 38 C.F.R. § 3.274 and has an annual income not in excess of the applicable MAPR specified in 38 C.F.R. §§ 3.23 and 3.24. For the purpose of determining initial entitlement, the monthly rate of pension shall be computed by reducing the applicable MAPR by the countable income on the effective date of entitlement and dividing the remainder by 12. 38 C.F.R. § 3.273 (a). Income from Social Security Administration (SSA) benefits is not specifically excluded under 38 C.F.R. § 3.272, and therefore is included as countable income. Certain unreimbursed medical expenses may be excluded from countable income for the same 12-month annualization period to the extent they were paid. To be considered, the total expense must be in excess of five percent of the MAPR (including increased pension for family members but excluding increased pension because of need for aid and attendance or being housebound). 38 C.F.R. § 3.272 (g)(2)(iii). The MAPR is increased periodically. 38 U.S.C. §§ 1541; 5312; 38 C.F.R. § 3.21; see also Survivors Pension Rate Tables, www.benefits.va.gov /PENSION/rates_survivor_pen17.asp). As relevant here, beginning December 1, 2016, the MAPR for a surviving spouse without dependents was $8,656. The associated five percent of MAPR deduction was $432. See 38 C.F.R. § 3.272 (g)(2)(iii). The Appellant filed a claim for death pension received May 8, 2017. The Appellant's claim is an original claim for pension; thus, her income is calculated based on the initial annualization period starting on the date of entitlement, in other words, for 12 months beginning April [REDACTED], 2017 (the date of the Veteran's death). The initial annualization period extends from the date of pension entitlement through the end of the month that is 12 months from the month during which entitlement arose. Thereafter, the income-counting periods coincide with the calendar year. Income is annualized for purposes of determining entitlement to pension benefits, i.e., all income must generally be counted for at least 12 months. Income is categorized into four types: nonrecurring, recurring, short-term recurring, and irregular. Nonrecurring income is essentially a one-time receipt of income or "one-time income." Recurring income is income that comes to the recipient on a regular basis, such as weekly or monthly and is received in regular amounts, e.g., Social Security payments and wages or salary. Short-term recurring income is recurring income that has not been counted on the VA award for at least 12 months because it knowingly was not received for all 12 months, e.g., regular wages counted on the award for 6 months when the beneficiary is laid off and the income stops. Finally, irregular income is an intermediate category of income that has characteristics of both recurring and nonrecurring income, i.e., it is received several times during an income reporting period but at irregular intervals or in irregular amounts. A September 2017 notification letter granted entitlement to survivor's pension effective April [REDACTED], 2017 payable from May 1, 2017 but terminated pension benefits effective June 1, 2017 due to excessive income. The Appellant filed a notice of disagreement and a June 2018 notification increased the May 2017 payment to $494 and again found the Appellant's income excessive as of June 1, 2017. In order to determine the Appellant's countable income for VA pension the RO calculated the income based on monthly Social Security benefits of $355.60 ($4,267.20 annually) and a lump sum of $255 for death benefits as of May 1, 2017, resulting in a total annual income of $4,522. Medical expenses consisted of $1,987 for Medicare Part B ($159.60 per month from April to December 2017 and $177.60 for January to April 2018) and last expenses of $240 (funeral expenses of $1,919.00 minus the $1,679.00 VA burial allowance). The appellant's total income of $4,522 was reduced by $1,555, which is the amount of medical expenses in excess of five percent of the MAPR (1,987 432) and $240 for last expenses for a countable income of $2,727. The MAPR for a surviving spouse without dependents in 2017 was $8,656; thus, the Appellant's pension entitlement effective May 1, 2017 was $5,929 per year (8,656 2,727) or $494 per month (5,929 divided by 12 months). See Appeal Notification Letter June 2018. The Appellant's pension benefits were terminated effective June 1, 2017 due to excessive income as her Social Security benefits increased to $937.60 per month beginning May 2017. See SSA/SSI Letter March 2018. The Board notes that the Appellant contends that her Social Security benefits were $778 not $937.60. See Correspondence October 2017. The Social Security benefits payment history reflects that the monthly payment paid to the Appellant was indeed $778 per month beginning May 2017; however, this is the adjusted payment. The full monthly Social Security benefit is $937.60, which is adjusted by the monthly premium for Medicare Part B of $159.60 resulting in the payment of $778 (937.60-159.60) to the Appellant. For purposes of calculating income for VA pension benefits, the full Social Security benefit amount is counted as annual income. The monthly premiums for Medicare are considered unreimbursed medical expenses, which are then used to reduce the annual income in order to determine the countable income. Therefore, based on the increased monthly Social Security benefit to $937.60 ($11,251.20 annually) and one time death benefit of $255 the Appellant's annual income effective June 1, 2017 was $11,506. Medical expenses of $1,987 were deducted for the amount paid for Medicare Part B ($159.60 per month from April to December 2017 and $177.60 for January to April 2018) and $240 for last expenses. The Appellant's total income of $11,506 was reduced by $1,555, which is the amount of medical expenses in excess of five percent of the MAPR (1,987 432) and $240 for last expenses resulting in a countable income of $9,711. The MAPR for a surviving spouse without dependents in 2017 was $8,656; thus, the Appellant's countable income exceeded the MAPR by $1,055. In February 2018 the Appellant provided a VA 21P-8416 medical expense report, with mileage to the VA hospital for the Veteran paid in 2016; however, these payments cannot be considered medical expenses for countable income purposes as they were paid prior to the annualization period. A handwritten attachment includes a report of a $25 payment for mileage that occurred April 11, 2017, this payment also occurred prior to the annualization period, which began on April [REDACTED], 2017. The Appellant did not provide any medical expenses for the period at issue. When making a decision, the Board must consider all the evidence of record, to include lay evidence. 38 U.S.C. § § 5107(b), 7104(a); 38 C.F.R. § 3.303(a). At the hearing, A.S. testified that the Appellant's total income for 2017 was $8,923.20 but the VA based their decision on the 2018 benefits of $11,467. She stated that the gross Social Security benefit after the Medicare deduction was only $584 a month and the Appellant did not have any unreported unreimbursed medical expenses to offset her income. The Board notes that A.S. testified that the Appellant's total income from Social Security benefits for 2017 was $8,923.20 but the VA used the 2018 benefits. While the Social Security benefit statement reflects that the total amount of benefits payments received from January 2017 to December 2017 is $8,923.20, the annualization period for pension benefits is from April [REDACTED], 2017 through April 30, 2018. See SSA/SSI Letter February 2020. Social Security payments are recurring income. New recurring income is counted from the first day of the month after it is first received. In this case, the increased Social Security benefits were first received in May 2017 and were therefore counted beginning June 1, 2017. As such, the RO properly counted annualized earnings as of June 1, 2017 of $11,251 based on the increased benefits (937.60 multiplied by 12 months) as reflected by the calculations above. Based on the foregoing, the Board finds that VA has properly counted the Appellant's income and she is entitled to pension benefits for May 1, 2017. However, as of June 1, 2017 and thereafter, the Board finds that the Appellant's countable income exceeded the allowable MAPR. As such, entitlement to pension benefits as of June 1, 2017 is not established. Accordingly, the claim is denied. K. Parakkal Veterans Law Judge Board of Veterans' Appeals Attorney for the Board S. A. Prinsen 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.