Citation Nr: A21020510 Decision Date: 12/27/21 Archive Date: 12/27/21 DOCKET NO. 211113-197353 DATE: December 27, 2021 ORDER Entitlement to continued payment of nonservice-connected death pension benefits for a surviving spouse from September 1, 2019 is denied. FINDING OF FACT The Appellant has not furnished evidence to substantiate that her unreimbursed medical expenses reduced her income to levels below the maximum annual pension limit for the period beginning September 1, 2019. CONCLUSION OF LAW Payment of death pension benefits for a surviving spouse from September 1, 2019 is not warranted. 38 U.S.C. § 1521; 38 C.F.R. §§ 3.3, 3.23, 3.271, 3.272. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty from December 1943 to February 1946. The Veteran died in July 2006 and the Appellant is his surviving spouse. This matter is on appeal to the Board of Veterans' Appeals (Board) from a March 2021 decision and notification letter issued by a Department of Veterans Affairs (VA) Regional Office (RO) as to the issue listed on the title page of this action. In a November 2021 VA Form 10182, Decision Review Request: Board Appeal (Notice of Disagreement), the Veteran timely appealed the portion of the decision pertaining to the issue above and requested direct review of the evidence considered by the RO. 38 C.F.R. § 20.202. Basic entitlement to VA nonservice-connected death pension benefits exists if: (i) the veteran had qualifying service (during wartime); or (ii) the veteran was, at time of death, receiving, or entitled to receive, compensation or retired pay for a service-connected disability based on service during a period of war; 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 applicable maximum annual pension rate specified in 38 C.F.R. § 3.23. 38 U.S.C. § 1541; 38 C.F.R. § 3.3(b)(4). The purpose of VA pension benefits is to provide a subsistence income for the surviving spouses of veterans of a period of war who were totally disabled. Pension benefits are based on total family. Recipients of pension income are required to report any changes in income and net worth, and number or status of their dependents in a timely fashion. 38 U.S.C. §§ 1541, 1542. The maximum annual rate of Improved (nonservice-connected) death pension payable to a surviving spouse varies according to the number of dependents. 38 U.S.C. §§ 1503, 1541; 38 C.F.R. §§ 3.3(b)(4), 3.23, 3.273. The rate of pension payable to an entitled payee is based on the amount of countable income received. Pension is payable at a specified annual maximum rate, which is reduced on a dollar-for-dollar basis by income on a 12-month annualized basis. 38 U.S.C. §§ 1503, 1541; 38 C.F.R. §§ 3.3, 3.23. The maximum annual rate of pension is established by statute every year and is reduced by the surviving spouse's countable annual income. "Annual income" includes the surviving spouse's own annual income, and, with certain exceptions, the annual income of each child of the veteran in the custody of the surviving spouse. 38 C.F.R. § 3.23(d)(5). For purposes of calculating pension benefits, total income may be reduced by amounts equal to amounts paid by a surviving spouse for unreimbursed medical expenses, to the extent that such amounts exceed five percent of the applicable maximum annual pension rate for the surviving spouse as in effect during the 12-month annualization period in which medical expenses were paid. 38 U.S.C. § 1503(a)(8); 38 C.F.R. § 3.272(g). The Board notes as an initial matter that the critical question in this case is whether the Appellant, who had received death pension payments beginning August 8, 2019 until their termination in the aforementioned March 2021 decision, has met the annual income requirements for continued receipt of death pension benefits beginning. There is no dispute that the Appellant is the surviving spouse of the Veteran, that she did not remarry since the Veteran's death in July 2006, that she has received Social Security Administration (SSA) benefits before and after August 2019, and that those benefits constitute income that annually exceeds the regulatory maximum limit for payment of VA death benefits. This case turns on whether the Appellant has unreimbursed medical expenses to the extent that they reduce her household income to a level below the maximum annual pension limit. By way of background, the Appellant was granted death pension benefits in a January 2020 rating decision, with an additional allowance for aid and attendance, effective August 8, 2019, the date VA received her claim. While her SSA income exceeded the maximum annual pension limit, her medical expenses for at-home aid and attendance were of an amount that made her eligible. See Appellant's Original August 8, 2019 VA 21-534EZ Application for Dependency and Indemnity Compensation, Survivor's Pension, and/or Accrued Benefits; February 3, 2020 Notification Letter. Shortly thereafter, however, in March 2020, the Appellant notified VA that her circumstances had changed, causing her to move into a nursing facility, and requested that VA reduce her pension to the Medicaid rate of $90. VA regulations provide that, effective November 5, 1990, and terminating on the date provided in 38 U.S.C. § 5503(d)(7), if a surviving spouse without a child is receiving Medicaid-covered nursing home care, no death pension in excess of $90 per month shall be paid to or for the surviving spouse for any period after the month in which the Medicaid payments begin. A surviving spouse is not liable for any pension paid in excess of the $90 per month by reason of VA's inability or failure to reduce payments, unless that inability or failure is the result of willful concealment by the surviving spouse of information necessary to make the reduction. 38 U.S.C. § 5503;38 C.F.R. § 3.551(i). In October 2020, a notification letter informed the Appellant that her request to reduce her benefits to the $90 Medicaid rate was granted, and that the reduction was effective October 1, 2020. However, following that notification letter, an additional development letter was sent to the Appellant on October 15, 2021, requesting that she complete an enclosed VA Form 21P-8416 (Medical Expense Report). As the Appellant was now in a nursing home, the RO required clarification regarding her medical expenses because, as noted above, her pension award is based on her total income minus certain medical expenses for home care that she no longer required. While the Appellant submitted the necessary expense report in October 2020, no itemized medical expenses were provided. An additional request for medical expenses in November 2020, specifically asking that the Appellant list any out-of-pocket expenses not covered by Medicaid from August 8, 2019 (the initial effective date of her pension award) to December 31, 2020. The Appellant was notified that, if she did not timely respond, her survivor's pension benefits would be terminated effective September 1, 2019. The Appellant did not respond, and her pension benefits were discontinued in a March 2021 correspondence, with VA finding that her countable income now exceeded the maximum income limit. Essentially, the Appellant's home care and its necessary out-of-pocket expenses made her initially eligible for survivor's pension benefits effective August 2019. Once she entered nursing home care, however, updated expenses were necessary. As she did not provide any out-of-pocket expenses for the period in which her nursing home admission began as requested by the RO, no expenses were able to be deducted from her income, and it was discontinued based on $0.00 deductible medical expenses. SSA benefits constitute income and are not listed as excludable when determining countable income for pension purposes. 38 C.F.R. § 3.272. The law is clear that nonservice-connected death pension is not payable to a claimant whose annual income exceeds the limitations as set forth in 38 C.F.R. § 3.23. As the Appellant has not provided evidence that her income exceeds the applicable maximum annual pension limit for purposes of payment of death pension benefits for the period beginning September 1, 2019, the Board finds that the discontinuation of her benefits was proper and her claim for reinstatement of death pension benefits from that date must be denied. As a final matter, the Board notes that the decision on appeal also indicates that, because of the discontinuation of her benefits effective September 1, 2019, the Appellant incurring a debt of $16,357.00. While there is no further communication from VA regarding this debt after the decision on appeal, the Appellants November 2021 substantive appeal suggests that she paid this debt in full. If the Appellant receives notification from the RO that a debt remains, she may request a waiver of any indebtedness with the Committee on Waivers and Compromises. P.M. DILORENZO Veterans Law Judge Board of Veterans' Appeals Attorney for the Board R. Scarduzio, 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.