Citation Nr: A21016408 Decision Date: 10/06/21 Archive Date: 10/06/21 DOCKET NO. 200611-90964 DATE: October 6, 2021 ORDER The calculation for the Veteran's amended nonservice-connected disability for calendar year 2019 was proper, and the appeal is denied. FINDING OF FACT All the Veteran's reported unreimbursed medical expense for calendar year 2019 were used to calculate his pension entitlement. CONCLUSION OF LAW The criteria for calculating the Veteran's nonservice-connected disability pension benefits for calendar year 2019 are met. 38U.S.C. §1521; 38C.F.R. §§3.3, 3.23, 3.271, 3.272. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty in the United States Army from August 1964 to June 1971. In June 2020, the Veteran filed a decision review request and elected direct review. 38 C.F.R. § 19.2(d). Based on the Veteran's choice to pursue a direct review of his appeal, the Board will decide the appeal "based on the evidence of record at the time of the prior decision." The rating decision on appeal was issued in May 2020. The Veteran raised the issue of his appeal regarding his calendar year 2015 pension benefits. This issue was appealed separately and addressed in an August 2021 Board decision and therefore will not be discussed. The Board also notes that the Veteran's privacy act request dated January 13, 2020 was completed. See Correspondence October 2020. The calculation for the Veteran's amended nonservice-connected disability for calendar year 2019 The Veteran initially received entitlement to nonservice-connected disability pension benefits effective April 28, 2011. See September 2012Notification Letter. In January 2020, the Veteran submitted unreimbursed medical expenses for calendar year 2019. In the May 2020 decision on appeal, the Veteran's pension was revised based on the January 2020 medical expense report. In June 2020 the Veteran filed a notice of disagreement stating that the award amount is inconsistent with the January 2020 VA Form 21P-8416. 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 38C.F.R. §3.23. 38U.S.C. §1521; 38C.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. 38C.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. 38U.S.C. §§1503, 1521; 38C.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, one-time lump sum payments or similar income, even if waived) shall be included during the 12-month annualization period in which received, except for income specifically excluded. 38U.S.C. §1503(a); 38C.F.R. §§3.271(a), 3.272. Gross income received is counted rather than the amount of the payment a beneficiary receives, except where certain expenses are allowed to be deducted (e.g., necessary operating expenses are deductible from business, farm, or professional income and medical, legal or other expenses incident to an injury or death or expenses incident to the collection or recovery of the amount of an award or settlement for an injury or death are deductible from compensation received for an injury or death). The amount of recurring and irregular income anticipated or received by a beneficiary shall be added to determine the beneficiary's annual rate of income for a 12-month annualization period commencing at the beginning of the 12-month annualization. 38C.F.R. §3.273(d). The amount of nonrecurring income (e.g., an inheritance) received by a beneficiary shall be added to the beneficiary's annual rate of income for a 12-month annualization period commencing on the effective date on which the nonrecurring income is countable. 38C.F.R. §3.273(c). For purposes of calculating countable income, total income may be reduced by amounts paid by a claimant for unreimbursed medical expenses that are "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." 38C.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 claimant received no reimbursement, such as from an insurance company. However, medical insurance premiums themselves, including Medicare Plan B premiums deducted from Social Security benefits, may be applied to reduce countable income. For the purpose of determining initial entitlement, or for 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 beneficiary's countable income on the effective date of entitlement and dividing the remainder by twelve. 38C.F.R. §3.273(a). In essence, VA subtracts the total amount of countable income in one year from the MAPR for that year; then, if a positive amount remains, the rest is divided by 12 to determine the monthly pension benefit. When a change in the MAPR occurs, VA repeats the calculation with the new MAPR as the starting amount on the effective date of the change, typically December 1st. 38C.F.R. §3.273(b)(1). Whenever there is a change in a beneficiary's countable income, VA will repeat the calculation using the beneficiary's new countable income effective the date of the change in the amount of income. 38C.F.R. §3.273(b)(2). In the notice of disagreement, the Veteran states that the May 2020 decision failed to explain the calculations used to determine the one-time payment of $846 or the increase in monthly payments. Thus, he does not know whether the retroactive payment is accurate as the information regarding the reimbursement calculation was not provided. See VA 21-4138 Statement in Support of Claim. As such, the Board will go through the calculations step by step. The May 2020 decision states that the Veteran's disability pension benefits increased because the medical expenses provided in the VA Form 21-8416 received January 6, 2020 were applied. However, in the notice of disagreement, the Veteran stated that the RO's findings are inconsistent with the provided medical expenses. Below is the comparison of the breakdown of the amounts used by both the RO and Veteran for the calendar year 2019 medical expenses: Medical Expense Amount Paid Per Veteran Medical Expense Amount Paid Per Regional Office Medicare $1,626 Medicare $1,626 OTC Medical Items $70.34 OTC Medical Items $70.34 Mileage $260.62 Mileage $364.24 Total Expense: $1,956.96 Total Expenses: $2,060.64 Accordingly, the difference between the amount calculated by the Veteran for medical expenses ($1,956.96) and the amount calculated by the RO ($2,060) is due to the differences in the amount counted for mileage. The cost of transportation for medical purposes by privately owned vehicle (POV), including mileage, parking, and tolls, is a medical expense. For transportation in a POV, VA limits the deductible mileage rate to the current POV mileage reimbursement rate specified by the United States General Services Administration (GSA). 38 C.F.R. § 3.278(c)(4). GSA's POV mileage reimbursement rate was $0.58 per mile, effective January 1, 2019. See https://www.gsa.gov/travel/plan-book/transportation-airfare-pov-etc/privately-owned-vehicle-pov-mileage-reimbursement-rates (last accessed September 22, 2021). The Veteran calculated his mileage at the rate of 41.5 cents, which equals $260.62. However, calculated at the correct rate of $0.58 (58 cents) the total is $364.24, as reflected by the RO's calculations. The difference between the RO's calculations of $364.24 for mileage and the Veteran's calculation of $260.62 is $103.62 (364.24 260.62 = 103.62). The RO's total medical expenses of $2,060 subtracted from the Veteran's total medical expense calculation of $1,957 is $103 (2,060 1,957 =103), which accounts for the difference between the Veteran's and RO calculations for mileage. The Board notes that cents are dropped off per regulation. As such, the RO calculated all the Veteran's medical expenses reported in the VA Form 21-8416 dated January 6, 2020 resulting in total allowable medical expenses of $2,060. However, only the amount in excess of five percent of the MAPR, or $676 can be deducted from his income, which equals $1,384 (2,060 676 = 1,384). For 2019, the Veteran's income was based solely on Social Security benefits. The RO calculated the Veteran's annual income at $11,754 ($979.50 per month). See SSA Profile and Benefit Data May 2020. The Veteran's total income of $11,754 was reduced by $1,384, which is the amount of medical expenses in excess of five percent of the MAPR (2,060 676 = 1,384) for a countable income of $10,370 (11,754 1,384 = 10,370). The MAPR for 2019 for a veteran with no dependents was $13,535. Thus, the Veteran's pension entitlement for 2019 was $3,165 per year (13,535 10,370 = 3,165) or $263 per month (3,165 divided by 12 months). Likewise, the increase from $200 to $237 effective January 1, 2020 considers the Veteran's income for 2020 based solely on Social Security benefits. The RO calculated the Veteran's annual income at $11,947.20 ($995.60 per month). See SSA Profile and Benefit Data May 2020. Medical expenses of $1,735 ($144.60 per month) for Medicare was considered. The amount of medical expenses in excess of five percent of the MAPR is $1,048 (1,735 687 = 1,048) resulting in a countable income of $10,899 (11,947 1,048 = 10,899). The MAPR for 2020 for a veteran with no dependents was $13,752. Thus, the Veteran's pension entitlement for 2020 was $3,165 per year (13,752 10,899 = 2,853) or $237 per month (2,853 divided by 12 months). Based on these findings, the Board finds that the calculation of the Veteran's pension entitlement for calendar year 2019 based upon his January 2020 report of unreimbursed medical expenses was proper. In the notice of disagreement, the Veteran also expressed that he was unclear as to whether the retroactive payment of $846 was accurate. According to the award print, the Veteran received $196 per month effective December 1, 2018, which was amended and increased to $263 per month effective February 1, 2019 and to $264 effective December 1, 2019. Thus, there was an increase from $196 to $263, which is a difference of $67 per month in February 2019 and an increase to $264 a $68 difference, for the month of December 2019. Therefore, the pension award was increased by $805 ($67 multiplied by 11 months= $737, added to $68 for the month of December equals $805) for calendar year 2019. See Award Print May 2020. The May 2020 notification letter also included the income adjustment amount effective January 1, 2020 of $237, which was increased from $196, a difference of $41 (237-196 = 41); thereby increasing the total retroactive payment to $846 (805 + 41 = 846). Accordingly, the $846 accurately reflects the increased payments for calendar year 2019 to include the month of January 2020. The Board notes that the basis of the notice of disagreement was that the Veteran was unclear as to how the VA determined the increased monthly payments resulting in a retroactive payment of $846 and requested the mathematics be explained and made clear. The Board has provided additional detail, to include the mathematical equations used to determine the Veteran's pension benefits in order to clarify the process used to determine his pension benefits for 2019. Based on the findings discussed herein, the Board finds that the calculation of the Veteran's pension entitlement for calendar year 2019 based upon his January 2020 report of unreimbursed medical expenses was proper and his appeal is denied. G. A. WASIK 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.