Citation Nr: 21013538 Decision Date: 03/09/21 Archive Date: 03/09/21 DOCKET NO. 17-17 142A DATE: March 9, 2021 ORDER The reduction of pension benefits from October 1, 2015 based on countable income was proper; entitlement to a higher rate of pension is denied. FINDING OF FACT From October 1, 2015, the Veteran was in receipt of previously unreported Social Security Administration benefits which are countable toward income. CONCLUSION OF LAW The criteria for a higher rate of pension benefits from October 1, 2015 have not been met. 38 U.S.C. § 1521; 38 C.F.R. §§ 3.3, 3.23, 3.271, 3.272, 3.273. REASONS AND BASES FOR FINDING AND CONCLUSION The matter comes on appeal from an August 2016 Department of Veterans Affairs (VA) decision which reduced pension benefits effective October 1, 2015 due to an increase in countable income. Whether the reduction of pension benefits from October 1, 2015 based on countable income was proper The Veteran contends in a December 2016 Regional Office (RO) Informal Conference Hearing presentation that he does not disagree with the Social Security Administration income that was counted, but reported that he had an overpayment debt that went back to an earlier adjustment. The RO noted a prior 2008 reduction and overpayment, but explained that a decision on the waiver had not yet been processed, and that there was a one-year time limit for filing a notice of disagreement. The Board notes that the record shows that in October 2016, the Debt Management Center granted a waiver of an overpayment debt in the amount of $21,373.00 for the period from December 2008 through August 2016. That overpayment issue is not before the Board. The Veteran submitted a notice of disagreement to the August 2016 decision which effectuated a reduction of benefits effective October 1, 2015 based an increase in income when the Veteran was awarded SSA benefits. The Veteran perfected an appeal to that decision. The Board will, therefore, address the reduction of benefits from October 1, 2015. 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. § 3.3(a)(3). The MAPR is published in Appendix B of the VA Adjudication Procedures Manual M21-1 and 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 claimant. 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). 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). 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). A May 2016 SSA Inquiry shows that the Veteran began receiving SSA benefits in August 2015, which included $4,477.00 paid in April 2016. The Board finds that SSA benefits are countable in calculating the Veteran’s countable income. A May 2016 letter, in pertinent part, proposed to reduce pension benefits effective October 1, 2015 based on the unreported SSA income. The Board finds that the July 2015 proposal adequately set forth all of the material facts and reasons for the reduction of benefits based on the Veteran’s receipt of SSA income. See 38 C.F.R. §§ 3.103(b)(3)(i), 3.105. The Veteran was given 60 days to respond, and did not submit evidence showing that the SSA benefits were incorrectly reported. See 38 C.F.R. §§ 3.103(b)(3)(i), 3.105(h). For these reasons, the Board finds that the procedural and appellate due process rights outlined in 38 C.F.R. §§ 3.103 and 3.105(h), including his right to notice in the reduction have been met. The Board will next address whether entitlement to a higher rate of pension from October 1, 2015 is warranted based on the Veteran’s countable income. The MAPR for a Veteran with no dependents in October 2015 was $12,868.00. There was no change to the MAPR in December 2016. From the October 1, 2015 date of the reduction, the Veteran was in receipt of SSA benefits in the amount of $551.00 a month, or $6,612.00 annually. The Veteran had no other identified income sources and no unreimbursed medical expenses during the appeal period. His monthly pension rate is calculated by reducing the MAPR of $12,868.00 by countable income, and diving the remainder by twelve, resulting in a rate of $521.00. This is the same rate shown in the August 2016 adjustment. Thus, a higher rate of pension is not payable. From January 1, 2016, his SSA benefit increased to $574.00. The regional office reduced benefits effective March 1, 2016 based on the change in income. He had an annualized income of $6,888.00. The monthly pension rate is calculated by reducing the MAPR of $12,868.00 by countable income, and diving the remainder by twelve, resulting in a rate of $498.00. From March 1, 2016, a higher rate of pension is not payable. The SSA retroactive benefit award in the amount of $3,903.00 ($4,477.00 paid in April 2016 minus his monthly benefit of $574.00) is countable for the one-year period beginning on May 1, 2016. Thus, from May 1, 2016, he had a countable income of $10,791.00 ($6,888.00 annualized income plus the $3,903.00 retroactive payment). The monthly pension rate is calculated by reducing the MAPR of $12,868.00 by countable income, and diving the remainder by twelve, resulting in a rate of $173.00. This is the same rate shown in the August 2016 adjustment. Thus, from May 1, 2016, a higher rate of pension is not payable. For the above reasons, the Board finds that the reduction of pension benefits based on countable income from October 1, 2015 was proper, and entitlement to a higher rate of pension is not warranted. 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.