Citation Nr: A21020583 Decision Date: 12/28/21 Archive Date: 12/28/21 DOCKET NO. 200918-197121 DATE: December 28, 2021 ORDER Entitlement to a higher rate of payment for VA survivors' pension is denied. FINDINGS OF FACT 1. From October 1, 2019, the Appellant had a countable income of $196.00. 2. From November 1, 2019, she had a countable income of $5,812.00. 3. From December 1, 2019, she had a countable income of $6,108.00. 4. From January 1, 2020, she had a countable income of $9,228.00. CONCLUSION OF LAW The criteria for a higher rate of payment for VA survivors' pension have not been met. 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 CONCLUSION The rating decision on appeal was issued in March 2020 and constitutes an initial decision; therefore, the modernized review system, also known as the Appeals Modernization Act (AMA), applies. In the September 2020 VA Form 10182, Decision Review Request: Board Appeal, 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. Entitlement to a higher rate of payment for VA survivors' pension The Appellant contends that her rate of pension was not correctly calculated. Specifically, she contends that her medical expenses and the expense of burial for the Veteran should be counted for the full 12-month period beginning October 1, 2019. 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. § 1541; 38 C.F.R. § 3.3(a)(3). 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. §§ 3.3, 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. 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. The expense of the veteran's last illness, and amounts paid for the just debts and expenses of last illness and burial, paid by the veteran's spouse, will be deducted from the income of the surviving spouse for any 12-month annualization period in which they were paid, or from annual income for any 12-month annualization period which begins during the calendar year of death, whichever is to the claimant's advantage. 38 C.F.R. § 3.272 (h). 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). Survivors' pension benefits were awarded with payments effective October 1, 2019, the first day of the month after the Veteran's death. The MAPR for a surviving spouse with no dependents at that time was $9,078.00. The MAPR was increased to $9,224.00 effective December 1, 2019. The Appellant reported that she received income from SSA and Retail Wholesale Union Pension. While she reported in her December 2019 Application for Pension that she received $880.00 a month from her SSA benefits with an anticipated increase, an SSA inquiry shows that before deduction of her supplemental medical insurance (SMI) premium in the amount of $135.50, she received $1,015.50 a month. Because medical expenses are separately deducted, the Board will use the amount reported by SSA. The SSA inquiry indicated that the Appellant's benefit had increased effective October 1, 2019; however, a November 2019 Wells Fargo bank statement shows that she was had been paid $880.00 in October 2019, the $1,015.50 rate minus the SMI premium. Therefore, the Regional Office (RO) correctly counted the lower rate of SSA income from October 1, 2019, with an increase in SSA benefits to $1,483.50 a month effective November 1, 2019, and to $1,507.60 a month from December 19, 2019. In her claim, the Appellant reported receiving $110.00 a month from her Retail Wholesale Union Pension, and a December 2019 letter shows that this amount increased to $370.00 in December 2019. The increase in her pension benefit is countable from January 1, 2019. The Appellant is also presumed to have received a $255.00 lump sum death benefit from SSA, which is countable for the 12-month period beginning October 1, 2019. She, therefore, had an annualized income as follows: SSA Income Pension SSA death benefit Annualized income Oct. 1, 2019 $12,186 $1,320 $255 $13,761 Nov. 1, 2019 $17,802 $1,320 $255 $19,377 Dec. 1, 2019 $18,091 $1,320 $255 $19,666 Jan. 1, 2020 Sept. 1, 2020 $18,091 $4,440 $255 $22,786 The Appellant contends in her Decision Review Request that medical expenses and burial expenses should be subtracted from income for the full 12-month period beginning on October 1, 2019. Unreimbursed medical expenses that in excess of five percent of the applicable MAPR (in excess of $454.00 from October 1, 2019, and $461.00 from December 1, 2019) may be used to reduce countable income. Here, in a December 2019 Medical Expense Report and March 2020 statement, the Appellant identified $1,735.00 paid annually for her Medicare Part B premium, at a rate of $144.60 a month. She also identified $3,324.00 paid for an AARP supplement. A September 2019 SSA inquiry, however, shows from October 2019 to December 2019, her Medicare premium amount was $135.50, and that it increased to $144.60 for January 2020. Thus, the Appellant had total medical expenses in the amount of $5,031.00. Additionally, she identified $10,068.00 paid for burial expenses. However, the Board will deduct the $1,080.00 awarded for a VA burial allowance as the Appellant has already been reimbursed for that amount. Thus, deductible burial expenses totaled $8,988.00. After deducting unreimbursed medical expenses in excess of five percent of the MAPR and burial expenses, the Appellant's countable income is as follows: Medical expenses in excess of 5% Burial expenses Annualized income Countable Income Oct. 1, 2019 $4,577 $8,988 $13,761 $196 Nov. 1, 2019 $4,577 $8,988 $19,377 $5,812 Dec. 1, 2019 $4,570 $8,988 $19,666 $6,108 Jan. 1, 2020 Sept. 1, 2020 $4,570 $8,988 $22,786 $9,228 The monthly rate of pension is computed by reducing the MAPR by the countable income and dividing the remainder by twelve. 38 C.F.R. § 3.273(a). As noted above, the MAPR effective October 1, 2019 was $9,078.00, and the MAPR effective December 1, 2019 was $9,224.00. Thus, pension was payable as follows: Countable Income Monthly entitlement March 2020 award on appeal Oct. 1, 2019 $196 $740 $739 Nov. 1, 2019 $5,812 $272 $271 Dec. 1, 2019 $6,108 $260 $271 Jan. 1, 2020 Sept. 1, 2020 $9,228 $0 $1 (Continued on the next page) The evidence shows that the Appellant's unreimbursed medical expenses and burial expenses were considered for the full 12-month period beginning on October 1, 2019 in calculating income. The reduction of her benefit in November 2019 was due to an increase in her SSA benefit and not due to a failure to deduct medical and burial expenses. While an additional $2.00 was due from October 2019 to November 2019, based on the calculations above, the Appellant was paid amounts in excess of what was due in her initial award from December 1, 2019. The Board, therefore, will not disturb the Appellant's current award. Accordingly, the Board finds that payment of a higher rate of pension is not warranted based on countable income. K. Parakkal Veterans Law Judge Board of Veterans' Appeals Attorney for the Board Christine C. Kung 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.