Citation Nr: A21020023 Decision Date: 12/15/21 Archive Date: 12/15/21 DOCKET NO. 210928-190046 DATE: December 15, 2021 ORDER A higher rate for survivor special monthly pension (SMP) is denied. FINDINGS OF FACT 1. The appellant's monthly payment to a pooled income trust is not considered a medical expense for exclusion from income, as the appellant retains the right to use the income for the appellant's benefit for other than medical expenses. 2. The appellant's survivor SMP rate is properly calculated. CONCLUSION OF LAW The criteria for a higher survivor SMP rate have not been met. 38 U.S.C. §§ 1503, 1541, 5107; 38 C.F.R. §§ 3.21, 3.23, 3.102, 3.271, 3.272, 3.273. REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran served on active duty from June 1946 to March 1948. He died in July 2008, and the appellant is his surviving spouse. The case comes before the Board of Veterans' Appeals (Board) on appeal from a July 2021 decision. In the September 2021 VA Form 10182, Decision Review Request: Board Appeal (NOD), the appellant elected the Direct Review docket. Therefore, the Board may only consider the evidence of record at the time of the agency of original jurisdiction (AOJ) decision on appeal. 38 C.F.R. § 20.301. The Board has limited the discussion below to the relevant evidence required to support its findings of fact and conclusion of law, as well as to the specific contentions regarding the case as raised directly by the appellant 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). A higher rate for survivor SMP. Legal Criteria 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 38 C.F.R. § 3.23. 38 U.S.C. § 1521; 38 C.F.R. § 3.4. 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, 1521; 38 C.F.R. §§ 3.4, 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)(2)(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, dividing the remainder by twelve, and then rounding down to the nearest dollar. 38 C.F.R. §§ 3.29, 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 is seeking a higher rate for survivor SMP benefits. SSA benefit statements for the appellant indicate that from December 2020 to November 2021 she received $1,538.50 per month in SSA income and paid $148.50 per month in Medicare premiums. The appellant did not report any additional income or assets. However, she provided documentation that she also pays $241.27 per month for additional medical insurance through a private company. In the appellant's May 2021 application for pension, she includes the medical expense of $486 per month as payment for Medicaid "spend down," in order to maintain a certain net income level to receive Medicaid coverage. The submitted June 2021 bank statement reflects the $486 electronic payment to "KTS POOLED TRUST." In her September 2021 NOD, the appellant contends that the $486 monthly payment to the trust should be included for reduction purposes from her countable income as a medical expense. The Board finds that the appellant's SMP rate has been calculated correctly throughout the appeal period. For the initial award and appeal period starting May 2021, the appellant received $18,462 in annualized SSA income and paid $4,677 in annualized medical expenses ($148.50 per month in Medicare premiums, and $241.27 per month in private insurance premiums). The SMP MAPR was $14,934, for a survivor with aid and attendance without dependents. After reducing the medical expenses by $467 (5 percent of the applicable MAPR), her income minus medical expenses was $14,252. The applicable MAPR of $14,934 minus income of $14,252 leaves a total annual SMP benefit amount of $682. Therefore, the payable survivor pension rate was $56 per month, which is the amount that was paid to the appellant. See 38 C.F.R. §§ 3.29, 3.273(a). The Board also finds that excluding the $486 per month payment to a pooled trust as an unreimbursed medical expense was proper. Although the trust is used to spend down her total net income in order to maintain Medicaid coverage, the evidence of record does not indicate, nor does the appellant assert, that she is unable to access the income for her benefit for expenses other than medical, such as clothing, food, rent, utilities, etc. Consequently, the pooled trust money remains countable income. 38 C.F.R. § 3.272. Therefore, the appellant's survivor SMP rate is properly calculated throughout the appeal period. Therefore, a higher rate for survivor pension benefits is not warranted. B. J. KOMINS Acting Veterans Law Judge Board of Veterans' Appeals Attorney for the Board S. Morford, 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.