Citation Nr: 21008718 Decision Date: 02/17/21 Archive Date: 02/17/21 DOCKET NO. 15-20 511 DATE: February 17, 2021 ORDER Entitlement to accrued benefits upon the death of the Veteran’s surviving spouse is granted. FINDING OF FACT 1. The Veteran’s surviving spouse’s medical expenses reduced her income to a point where she was eligible for payment of an award for aid and attendance. 2. As no benefits for an award of aid and attendance have ever been paid these benefits became accrued at the time of her passing and the appellant is an eligible individual to receive such payments as she bore the expenses of the surviving spouse’s last illness. CONCLUSION OF LAW Entitlement to accrued benefits in the amount of any unreimbursed expenses related to the last illness of the Veteran’s surviving spouse are granted to the extent that accrued benefits are available to cover those costs. 38 U.S.C. § 5121; 38 C.F.R. § 3.1000. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served in the U.S. Army on active duty from February 1951 to January 1953. The veteran passed away in July 2002 and an original death claim was received by his surviving spouse on March 13, 2012. Entitlement to aid and attendance was established as of this date by a November 2013 rating decision. The Veteran’s surviving spouse passed away in January 2014 and the appellant is the surviving adult child of the Veteran and his surviving spouse. This matter comes to the Board of Veteran’s Appeals (Board) from a November 2013 rating decision that found that while the Veteran’s surviving spouse qualified for aid and attendance that her income was too high. The appellant requested accrued benefits in November 2014 indicating that this decision was incorrect as it failed to consider medical expenses the surviving spouse. The appellant testified at a March 2019 Videoconference hearing before the undersigned Veteran’s Law Judge and the claim for accrued benefits was denied in a July 2019 Board decision. The appellant appealed this decision to the United States Court of Appeals for Veterans Claims (Court). An August 2020 Order of the Court adopted the parties Joint Motion for Remand (JMR) and the July 2019 Board decision was vacated and remanded for action consistent with the JMR. The Board finds that the July 2015 Supplemental Statement of the Case (SSOC) treated the appellant as a substitute and while a formal determination has not been made regarding substitution that this decision implicitly granted the appellant the rights of a substituted individual and that she is eligible to be substituted pursuant to 38 C.F.R. § 3.1000(a)(5); 38 C.F.R. § 3.1010. 1. Entitlement to accrued benefits upon the death of the Veteran’s surviving spouse The Board initially notes that the appellant has argued that the date stamp applied to her November 2014 request for accrued benefits was incorrectly dated November 26, 2014. See July 30, 2015 Correspondence. The appellant has provided a USPS tracking sheet showing delivery of mail to VA’s Philadelphia Regional Office on November 21, 2014. See June 2015 Third Party Correspondence. The date of the appellant’s claim for accrued benefits bears a date of November 19, 2014 and was forwarded to Senator King’s office. The Board accordingly finds that the appellant has overcome the presumption of regularity in VA’s mail procedures by clear evidence of receipt prior to the date stamped copy. The Board notes that VA received correspondence dated November 26,2014 and an email message the same date from Senator King’s office regarding this claim. The Board also notes that the November 19, 2014 claim for accrued benefits included correspondence which noted that the determination of the Veteran’s surviving spouse was incorrect at the time of the November 2013 determination. The Board notes that this letter was submitted with application for accrued benefits by the appellant and indicates a disagreement and desire to appeal the prior determination. As such the Board finds that the November 19, 2014 correspondence constitutes a valid Notice of Disagreement. Basic entitlement to death pension benefits exists if (i) a veteran served for ninety days or more during a period or periods of war; or (ii) was, at the time of death, receiving or entitled to receive compensation or retirement pay for a service-connected disability based on wartime service; 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 specified in 38 C.F.R. §§ 3.23 and 3.24. See 38 U.S.C. §§ 101 (8), 1521(j), 1541(a) (2014); 38 C.F.R. § 3.3 (2017). The term “period of war” is defined by statute to include the Korean conflict from June 27, 1950 to January 31, 1955. See 38 U.S.C. § 101; 38 C.F.R. § 3.2. A certificate of service shows that the Veteran served in an active duty capacity (with an honorable discharge) from February 1951 to January 1953, and thus, the first element of the criteria is met. The Veteran’s surviving spouse reported assets of approximately $32,000 on her initial March 2012 VA Form 21-534. While there is no specific dollar limitation on net worth (as opposed to income) that bars an otherwise eligible claimant from receiving pension benefits under 38 C.F.R. § 3.274, given the relatively amount of assets, the Board finds that this criterion is also met. Therefore, the Board must consider whether the appellant’s income is in excess of the maximum annual pension rate. Basic entitlement to death pension benefits exists if, among other things, the surviving spouse’s income is not in excess of the applicable maximum annual pension rate (MAPR) specified in 38 C.F.R. § 3.23 as changed periodically and reported in the Federal Register. See 38 U.S.C. § 1521; 38 C.F.R. §§ 3.3 (b)(4), 3.23(a), (b), (d)(5). 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. See 38 C.F.R. §§ 3.21, 3.23. 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. See 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. See 38 U.S.C. § 1503 (a); 38 C.F.R. § 3.271 (a). Unreimbursed medical expenses in excess of 5 percent of the maximum annual pension rate (MAPR), which have been paid, may be excluded from an individual’s countable income for the same 12-month annualization period to the extent they 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 appellant received no reimbursement, such as through an insurance company. However, medical insurance premiums themselves, as well as the Medicare deduction, may be applied to reduce countable income. Regarding deductible medical expenses, independent living facility expenses may be deducted in certain circumstances. Specifically, the claimant must be rated for special monthly pension and the custodial care requirement (CCR) must be met. The CCR may be satisfied in one of two ways; either the claimant receives regular assistance with two or more activities of daily living (ADLs) or the claimant receives regular supervision because she has a physical, mental, developmental, or cognitive disorder requiring care and assistance on a regular basis to be protected from hazards or dangers of her daily environment. VA’s M21-1 Adjudication Procedures Manual M21-1, V.iii.1.G.3.e. Under M21-1, V.iii.1.G.3.f., ADLs are basic self-care activities, consisting of: bathing or showering; dressing; eating; getting in or out of bed or a chair, etc. The Veteran’s surviving spouse filed a claim for death pension benefits in March 2012. In a November 2013 rating decision, VA established that the Veteran’s surviving spouse was in need of aid and attendance. Pertinent to the period on appeal, the MAPR for a surviving spouse with aid and attendance was $13,138.00 for 2012, $13,362.00 (effective December 1, 2012), $13,563 (effective December 1, 2013. The Veteran’s surviving spouse received $790.90 per month in Social Security income as of December 2011, $803.90 as of December 2012. She also reported $1,591.31 per month in state pension benefits. Her income for 2012 totaled $28,586.52. Based upon Social Security cost of living adjustments, her monthly Social Security income increased to approximately $817.60 in 2013 (1.7 percent increase), $829.80 in 2014 (1.5 percent increase). See https://www.ssa.gov/news/cola/. Accordingly, the appellant’s income has been in excess of the MAPR for the entire appeal period. The Board will next consider whether the appellant had any unreimbursed medical expenses. In December 2014 correspondence, the appellant reported charges of approximately $4,620 per month from March 2012 to June 2013 for Dirigo Pines assisted living facility charges, $3,420 in charges per month for Ross Manor assisted living facility charges from June 2013 to September 2013, and $3,735.00 in charges per month for Winterberry Heights assisted living facility. These are approximate amounts for the care of Veteran’s surviving spouse and the appellant further reported medical expenses, insurance premiums and other expenses relate to her last illness. As noted above, the RO found that the Veteran’s surviving spouse required aid and attendance in the November 2013 rating decision due her need for assistance with. ADLs such as bathing or showering, dressing, eating, or getting in or out of bed. Accordingly, these expenses may be deducted. As noted above, based upon the Veteran’s surviving spouse reported income of Social Security benefits and a pension account, her income beginning in 2012 was $28,586.52. The monthly out-of-pocket expense for the nursing home was reported as no less than $3,420 or $41,040.00 per year. The MAPR for a surviving spouse with no dependents is $8,830.00, and therefore, medical expenses in excess of $441.60 may be excluded. Given the deduction of nursing home expenses, the Veteran’s surviving spouse countable income is far lower than $13,836 MAPR for a surviving spouse with aid and attendance and no dependents. Accordingly, entitlement to death pension with aid and attendance is granted from March 12, 2012, until the date of her death, and the Board specifically finds that her income did not exceed the MAPR during this period. The law provides for payment of certain accrued benefits upon death of a beneficiary. 38 U.S.C. § 5121. Periodic monetary benefits under laws administered by the Secretary to which an individual was entitled at death under existing ratings or decisions or those based on evidence in the file at date of death and due and unpaid, shall, upon the death of a beneficiary, be paid to the living person first listed below: (A) the beneficiary’s spouse; (B) the beneficiary’s children (in equal shares); (C) the beneficiary’s dependent parents (in equal shares). 38 U.S.C. § 5121 (a), 5121(a)(2); 38 C.F.R. § 3.1000 (a). In all other cases, only so much of the accrued benefits may be paid as may be necessary to reimburse the person who bore the expense of last sickness and burial. 38 U.S.C. § 5121 (a)(6). The appellant, as the adult daughter of the surviving spouse is not a spouse, child or dependent parent and therefore is only eligible to receive accrued benefits in the amount necessary to reimburse her for the cost of the surviving spouse’s final sickness and burial. As noted above, the Board has found that an earlier death pension with aid and attendance should be granted from March 12, 2012 until the date of death, and that her income did not exceed the MAPR during this. Therefore, any monetary benefits owed to the surviving spouse by virtue of that grant are now accrued. The appellant has submitted a claim for accrued benefits and has provided documentation showing that she transferred stock to the surviving spouse in order to assist her with her medical bills. See April 2019 Third Party Correspondence. Therefore, to the extent that the appellant has incurred any qualifying unreimbursed medical expenses related to the surviving spouse’s last illness, and to the extent that the above grant has resulted in funds becoming accrued, the Board finds that accrued benefits should be granted to the appellant in the amount of those unreimbursed expenses only. MARJORIE A. AUER Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board John M. Middleton 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.