Citation Nr: 21026899 Decision Date: 05/24/21 Archive Date: 05/24/21 DOCKET NO. 18-14 459 DATE: May 24, 2021 ORDER Entitlement to Parents' Dependency and Indemnity Compensation (PDIC) based on eligibility as a surviving parent of the Veteran for VA purposes is denied. FINDING OF FACT The Appellant's annual income in 2015 exceeded the maximum annual income allowable for PDIC. CONCLUSION OF LAW The criteria for payment of PDIC to the Appellant have not been met. 38 U.S.C. §§ 1310, 1315, 5312; 38 C.F.R. §§ 3.25, 3.251, 3.260, 3.262. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty from October 1995 to February 2015. He died in February 2015. The Appellant is his surviving mother. This matter comes before the Board of Veterans' Appeals (Board) on appeal from an October 2016 decision. The Appellant testified before the undersigned Veterans Law Judge (VLJ) at a hearing in November 2020. A transcript of that hearing is of record. 1. Entitlement to PDIC Based on Eligibility as a Surviving Parent of the Veteran for VA purposes The Appellant contends that she should receive PDIC benefits as the surviving parent of the Veteran. Dependency and Indemnity Compensation (DIC) may be awarded to a surviving spouse, child, or parent of a veteran who dies from a service-connected or compensable disability. 38 U.S.C. § 1310; 38 C.F.R. § 3.5 (a). Basic entitlement exists for a parent of the Veteran if, among other things, the parent's annual income is not in excess of the applicable maximum benefit rate. 38 U.S.C. § 1315. Thus, DIC benefits payable to parents are subject to limitations on annual income. VA has provided a website listing both current and historical income limitations for DIC benefits. Parents Dependency and Indemnity Compensation, Effective 12/1/14, Veteran's Benefits Administration, https://benefits.va.gov/PENSION/rates_parents_DIC_pen14.asp (last accessed on April 28, 2021). For PDIC, the calculation of annual income is governed by 38 C.F.R. §§ 3.250 to 3.270. See 38 C.F.R. § 3.270 (a)(4). The amount of annual income is calculated by subtracting the value of unusual medical expenses from a value that the Board will refer to as reported annual income. See 38 C.F.R. § 3.262 (l)(1) (discussing "reported annual income" as part of the calculation of unusual medical expenses). Reported annual income is equal to the sum of all sources of yearly income after each yearly income value is corrected, if necessary, as required by statute. The basic rule is that "[p]ayments of any kind or from any source will be counted as income unless specifically excluded." 38 C.F.R. § 3.252 (c). See also 38 C.F.R. § 3.262 (a). Some individual forms of income are reduced by 10 percent, including retirement benefits, age-based and survivors SSA benefits, and SSA disability income. See 38 C.F.R. §§ 3.262 (e)(2), (f), (i)(2). For these types of income, the remaining 90 percent is considered income received. Rates are to be rounded down to the nearest dollar. See 38 C.F.R. § 3.29 (b). Reported annual income is equal to the sum of all yearly values of income received, after each individual value is corrected as required by statute. The Appellant has submitted several documents asserting her annual income in 2015. She contends that her salary is her only income in 2015, but has provided several different numbers and documents regarding what her salary actually was in 2015. The documents that show the lowest annual income, and are thus most beneficial to the Appellant for the purposes of this claim, are earning statements from 2015. One statement is for the period from March 9, 2015 to March 22, 2015, and the other is for the period from December 14, 2015 to December 27, 2015. Her net pay in each statement was $619.62 and $619.63 respectively. As there are 26 two-week pay periods in a year, if she continued to receive this income throughout the year, she would have an annual net income of approximately $16,110 in 2015. This income exceeds the PDIC income limit for 2014 for one parent not living with a spouse, which is $14,636. See https://benefits.va.gov/PENSION/rates_parents_DIC_pen14.asp (last visited April 28, 2021). The Board will use the income limit from 2014 because a new income limit was not set until 2016, which indicates that the 2014 limit applies for 2015. The Appellant contends that she has significant medical expenses that should be taken into consideration and used to reduce VA's calculation of her income. Unusual medical expenses are excluded as part of the calculation of the claimant's annual income. 38 C.F.R. § 3.262 (l). "The term unusual means excessive" and "[u]nreimbursed expenditures which exceed 5 percent of the claimant's reported annual income will be considered unusual." Id (emphasis in original). The term unusual medical expenses "does not describe the nature of a medical condition but rather the amount expended for medical treatment in relationship to the claimant's resources available for sustaining a reasonable mode of life." Id. This includes expenses related to "[h]ealth, accident, sickness, and hospitalization insurance premiums." Id. "A claimant's statement as to amounts expended for medical expenses ordinarily will be accepted unless the circumstances create doubt as to its credibility." Id. Mathematically, the value of unusual medical expenses is determined by first calculating the value of 5 percent of the appellant's reported annual income and then subtracting that value from the amount of reported medical expenses. Annual income is then calculated by subtracting the value of unusual medical expenses from the value of reported annual income. The Board recognizes that the Appellant has incurred significant medical expenses as a result of hospitalizations prior to 2015. However, the Board may only consider medical expenses that the Appellant paid in 2015. Based upon the documentation provided by the Appellant, including December 2020 correspondence, the Appellant paid $530 towards her medical debt in 2015. In order to be considered an unusual medical expense and counted against the Appellant's income for VA purposes, the Appellant's medical expenses in 2015 must be more than 5 percent of her annual income. 5 percent of the Appellant's 2015 annual income of $16,110 would be approximately $805. The $530 that the Appellant paid towards her medical debt in 2015 is less than $805, and thus cannot be used to reduce her income for VA purposes. The Board is sympathetic to the Appellant's arguments and her financial situation, and has tremendous respect for her significant accomplishment in achieving and maintaining her sobriety in the face of hardship. However, the Board is bound to follow the law and regulations applicable to the benefits sought. The Appellant's income in 2015 was higher than the annual income allowed for the payment of PDIC, and for this reason, the Appellant's claim must be denied. M.E. Larkin Veterans Law Judge Board of Veterans' Appeals Attorney for the Board A. Budd, 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.