Citation Nr: A21019879 Decision Date: 12/14/21 Archive Date: 12/14/21 DOCKET NO. 200123-56319 DATE: December 14, 2021 ORDER The motion for reconsideration of the January 13, 2021 Board of Veterans' Appeals (Board) decision as to the dismissal of the Appellant's claim of entitlement to survivors' pension benefits is granted; the January 13, 2021 Board decision is vacated. Entitlement to survivors' pension benefits is granted. FINDINGS OF FACT 1. In its January 13, 2021 decision, the Board dismissed the Appellant's claim of entitlement to survivors' pension benefits. 2. The Veteran had the minimum active duty requirements in order to qualify for pension. 3. The Veteran had wartime service. 4. The Veteran's character of service meets the requirements to qualify for pension. 5. The Appellant's countable income does not exceed the maximum annual pension rate. CONCLUSIONS OF LAW 1. The criteria for vacatur of the January 13, 2021 Board decision which dismissed the Appellant's claim of entitlement to survivors' pension benefits are met. 38 U.S.C. § 7104 (2012); 38 C.R.F. § 20.904 (2020). 2. The criteria for entitlement to payment of survivors' pension benefits based on the Appellant's countable income have been met, subject to the laws and regulations governing the payment of VA compensation. 38 U.S.C. § 1541; 38 C.F.R. §§ 3.3, 3.23, 3.271, 3.272, 3.273. REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Veteran served on active duty in the United States Army from November 1981 to November 2001. During his period of service, he earned the Defense Meritorious Service Medal, Joint Service Commendation Medal, Army Commendation Medal, Army Achievement Medal (5th Award), Joint Meritorious Unit Award, Good Conduct Medal, (6th Award), National Defense Service Medal, Noncommissioned Officer's Professional Development Ribbon with Numeral Three, Army Service Ribbon, Overseas Service Ribbon (2nd Award), Expert Marksmanship Qualification Badge with Rifle Bar, Driver and Mechanic Badge with Driver-W Bar, and U.S. Army Retired Lapel Button. The Veteran died in April 2018. The Appellant is his surviving spouse. In the January 2020 VA Form 10182, Decision Review Request: Board Appeal, the Veteran elected the Direct Review docket. Therefore, the Board may only consider the evidence of record at the time of the August 2019 Agency of Original Jurisdiction (AOJ) decision on appeal. 38 C.F.R. § 20.301. 1. Reconsideration The Board may vacate an appellate decision at any time upon request of the appellant or his or her representative, or on the Board's own motion, when an appellant has been denied due process of law or when benefits were allowed based on false or fraudulent evidence. 38 U.S.C. § 7104(a); 38 C.F.R. § 20.904. In its January 2021 decision, the Board dismissed the Appellant's claim of entitlement to survivors' pension benefits. In April 2021, the Appellant submitted a VA Form 21-4138 (Statement in Support of Claim) that has been construed as a motion for reconsideration of the January 2021 Board decision. Here, the record confirms that the Appellant's claim of entitlement to survivors' pension benefits was denied by the Agency of Original Jurisdiction (AOJ). See April 2021 Notification Letter. Accordingly, the January 2021 Board decision contains an obvious error of fact or law under 38 C.F.R. § 20.1000, which, if corrected, would change the outcome of the appeal. Thus, in dismissing the claim, the Appellant was denied due process of law. As such, the Appellant's motion for reconsideration is granted, and on the Board's own motion, the January 13, 2021 Board decision dismissing the Appellant's claim of entitlement to survivors' pension benefits is therefore vacated. 38 U.S.C. § 7104 (a); 38 C.F.R. § 20.904. 2. Entitlement to survivors' pension benefits Survivors' pension benefits are generally available for surviving spouses as a result of the Veteran's nonservice-connected death. 38 U.S.C. § 1541(a). Basic entitlement exists if (i) the Veteran served for 90 days or more during a period of war; or (ii) was, at the time of death, receiving or entitled to receive compensation or retirement pay for a service-connected disability, and (iii) 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 maximum annual pension rate (MAPR) specified in 38 C.F.R. § 3.23. See 38 C.F.R. § 3.3(b)(4). Here, the Veteran served in the United States Army from United States Army from November 1981 to November 2001. Accordingly, the Veteran served for longer than 90 days during the Gulf War era, thus meeting the service requirement for improved death pension. Therefore, the first two requirements for improved death pension are satisfied. The remaining question is whether the Appellant's income exceeds the MAPR. 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. 38 C.F.R. § 3.21. The MAPR is revised every December 1st and is applicable for the following 12-month period. 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. Such income 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). The Board notes that, effective October 18, 2018, VA amended some of its regulations regarding net worth, asset transfers, and income exclusion as they pertain to nonservice-connected pensions. See 83 Fed. Reg. 47246 (Sep. 18, 2018). However, the final rule for those amendments to the VA regulations makes clear that, for claims that were pending as of October 18, 2018, such as the present claim, an administrative determination will still be required under previous provisions when a claimant's net worth exceeds the net worth limit now set forth in 38 C.F.R. § 3.274(a). See 83 Fed. Reg. 47264-65. Under the regulations in effect prior to October 18, 2018, there is no specific dollar limitation on net worth (as opposed to income) that bars an otherwise eligible claimant from receiving pension benefits. Pension payable to a surviving spouse shall be denied or discontinued when the corpus of the estate of the surviving spouse is such that under all the circumstances, including consideration of the surviving spouse's income and the income of any child for whom the surviving spouse is receiving pension, it is reasonable that some part of the corpus of the estate be consumed for the surviving spouse's maintenance. 38 U.S.C. § 1543; 38 C.F.R. § 3.274(c). The terms "corpus of estate" and "net worth" mean the market value, less mortgages or other encumbrances, of all real and personal property owned by the claimant, except the claimant's dwelling (single family unit), including a reasonable lot area, and personal effects suitable to and consistent with the claimant's reasonable mode of life. 38 C.F.R. § 3.275(b). In determining whether the estate should be used for the appellant's maintenance, factors to be considered include whether the property can be readily converted into cash at no substantial sacrifice, life expectancy, number of dependents, and potential rate of depletion, including unusual medical expenses. 38 C.F.R. § 3.275(d). For purposes of this analysis, effective December 1, 2017, the MAPR for a surviving spouse without dependents was $8,830.00. In her August 2018 VA Form 21P-534 (Application for Dependency and Indemnity Compensation, Death Pension and Accrued Benefits by a Surviving Spouse or Child), the Appellant reported having $1,100.00 in cash, bank accounts, and certificates of deposits (CDs). She denied any sources of income. In a July 2019 VA Form 21-4138 (Statement in Support of Claim), the Appellant indicated that she had no property nor transfer of assets. The only item which she maintained was a vehicle for which she made recurring monthly payments. Thus, when resolving the benefit of the doubt in favor of the Appellant, the Board finds that the Appellant's net worth and income are not a bar to survivor's pension benefits. As such, the appeal is granted. A. S. CARACCIOLO Veterans Law Judge Board of Veterans' Appeals Attorney for the Board Tracy O. Joseph, 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.