Citation Nr: 21041196 Decision Date: 07/08/21 Archive Date: 07/08/21 DOCKET NO. 16-63 545 DATE: July 8, 2021 ORDER Entitlement to death (survivor's) pension is denied. FINDINGS OF FACT 1. The appellant had a net worth of $452,233.00 when she submitted her claim. It is reasonable that some part of the corpus of the estate be consumed for the appellant's maintenance. 2. The appellant did not submit updated net worth information to show that net worth had been reduced to below the $127,061.00 net worth limit effective in from December 1, 2018, or the $129,094.00 net worth limit effective from December 1, 2019. 3. The appellant's countable income exceeded applicable maximum annual pension rates (MAPR). CONCLUSION OF LAW The criteria for entitlement to survivor's 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 FINDING AND CONCLUSION The matter comes on appeal from a May 2015 decision. The Board remanded the appeal in July 2019 to request that the appellant provide updated income information. The requested development has been completed. The record shows that in May 2018, the appellant requested that the appeal be advanced on the docket due to her age. Appeals must be considered in docket number order but may be advanced if sufficient cause is shown. See 38U.S.C. §7107(a)(2); 38C.F.R. §20.900(c). Sufficient cause includes advanced age (defined as 75 years or more), serious illness, severe financial hardship, or administrative error resulting in a significant delay. An appeal may also be advanced if the case involves interpretation of a question of law of widespread application affecting other claims, although this is extremely rare. Any motion for advancement should be supported by pertinent documentation. SSA data shows that the appellant is 82 years old. The Board finds that this is good or sufficient cause to advance the case on the docket. Thus, the Motion to Advance on the Docket (AOD) is granted and the appeal is advanced on the Board's docket. Entitlement to death pension 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). 38 C.F.R. § 3.21. 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). 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 claimant 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. Under the regulations in effect prior to October 18, 2018, there is no specific dollar limitation on net worth (as opposed to income) that bars an otherwise eligible claimant from receiving pension benefits. Entitlement to pension will be denied however, when the corpus of a veteran's estate (and that of any spouse) is such that, under all circumstances, including consideration of the annual income of the veteran, his spouse, and any cohabitating children, it is reasonable that some part of the corpus of such estate be consumed for the claimant's maintenance. 38 U.S.C. § 1522; 38 C.F.R. § 3.274 (a). The terms "corpus of estate" and "net worth" mean the market value, less mortgages or other encumbrances, of all real and personal property owned by the claimant except the claimant's dwelling and personal effects. 38 C.F.R. § 3.275 (b). In determining whether some part of the claimant's estate should be consumed for maintenance, consideration will be given to the amount of the claimant's income together with the following: Whether the property can be readily converted into cash at no substantial sacrifice; life expectancy; number of dependents who meet the definition of a member of the family; and potential rate of depletion, including unusual medical expenses for the claimant and the claimant's dependents. 38 C.F.R. § 3.275 (d). A gift of property to someone other than a relative residing in the grantor's household will not be recognized as reducing the corpus of the grantor's estate unless it is clear that the grantor has relinquished all rights of ownership, including the right of control of the property. 38 C.F.R. § 3.276 (b). Effective October 18, 2018, VA amended some of its regulations regarding net worth, asset transfers, and income exclusion as they pertain to nonservice-connected pensions. See 83 Fed. Reg. 47246 (Sep. 18, 2018). Relevant to the present case are revisions to 38 C.F.R. § 3.274 (a), which dictates that, for purposes of entitlement to nonservice-connected pension benefits, the net worth limit effective October 18, 2018, is $123,600. 38 C.F.R. § 3.274 (a). This limit will be increased by the same percentage as the Social Security increase whenever there is a cost of living increase in benefit amounts payable under section 215(i) of title II of the Social Security Act (42 U.S.C. 415 (i)). Furthermore, VA will deny or discontinue pension if a claimant's or beneficiary's net worth exceeds the net worth limit. The net worth limit increased to $127,061.00 from December 1, 2018, and to $129,094.00 from December 1, 2019. Net worth means the sum of a claimant's or beneficiary's assets and annual income. Under 38 C.F.R. § 3.275 (a)(1), assets mean the fair market value of all property an individual owns, including all real and personal property, unless excluded. The claimant's primary residence is not included as part of the value of the assets. See 38 C.F.R. § 3.275 (b)(1). The appellant had a net worth of $452,233.00 when she submitted her January 2015 claim. The Board finds that is reasonable that some part of the corpus of the estate be consumed for the appellant's maintenance. Therefore, her net worth is a bar to the receipt of pension benefits. A January 2015 Application for Pension DIC, Death Pension, and/or Accrued Benefits identified $158,360.00 in cash/non-interest bearing bank accounts, $3,863.00 in interest bearing bank accounts, $57,000.00 in IRAs, and $233,000.00 in real property (not including her home, vehicle, furniture, or clothing). The appellant had a net worth of $452,233.00 when she submitted her claim. She reported a monthly income of $1,432.80 from SSA benefits; however, an SSA inquiry shows that she was receiving $1,627.70 a month. The Board will use the amount provided by SSA in calculating income. The appellant's medical expenses, to include Medicare premiums are separately deducted. She reported receiving $17.92 a month form IBEW. Thus, she had an annual income of $19,747.00. In an April 2016 Request for Details of Expenses the appellant identified a monthly cost of living of $2,238.00 and estimated $2,168.00 in annual medical expenses, for total annual expenses of $29,024.00. The Request for Details of Expenses identified higher estimated annual medical expenses than an April 2016 Medical Expense Report. Thus, the Board has used the higher amount to calculate total annual expenses. The appellant's expenses exceeded her income by $9,277.00 a year. The appellant was 75 years of age at the time she submitted her claim, and her life expectancy for VA pension was 10.4 years. Thus, the Board finds that with consideration of the appellant's net worth of $452,233.00, her life expectancy, and the $9,277.00 a year rate of depletion, her net worth is enough to sustain her for several years, and it is reasonable for the appellant to consume part the corpus of her estate for her maintenance during her lifetime. Thus, the Board finds that her net worth is a bar to the receipt of pension benefits. VA's pension program is intended to give beneficiaries a minimum level of financial security; it is not intended to protect substantial assets or build up the beneficiary's estate for the benefit of heirs. Pension entitlement is based on need and that need does not exist if a claimant's estate is of such size that he or she could use it for living expenses. In February 2015, the appellant reported having a higher amount in her IRA, $68,400.00. She indicated that she sold all of her personal securities to purchase a home. Submitted tax information shows that her real estate property had an assessed value of $175,224.00. The AOJ requested complete updated net worth information in July 2015 and December 2019 notice letters, to include valuation of home, amount of sale, and any proceeds of sale. While the appellant has submitted statements indicating that she sold her home and is living in an apartment during the construction of her new home, she has not submitted complete net worth information necessary to determine if there was a reduction to her overall net worth since she submitted her claim. The Board finds that the appellant did not submit updated net worth information to show that her net worth had been reduced to below the $127,061.00 net worth limit effective in from December 1, 2018, or the $129,094.00 net worth limit effective from December 1, 2019. Therefore, entitlement to death pension is denied based on net worth. Moreover, the Board finds that updated income information provided by the appellant post-remand shows that her income exceeded applicable MAPRs and is a bar to the receipt of pension benefits. A February 2020 Improved Pension Eligibility Report shows that the appellant received annual SSA income in the amount of $20,550.00 in 2019. The Board will also assume that she continues to receive $17.92 a month form IBEW. While the appellant returned a signed Medical Expense Report in February 2020, no expenses were identified. Therefore, she had a countable income of $20,765.00 for 2019. The Board notes that the RO did not adjudicate the question of whether the appellant was entitled to special monthly pension based on the need for aid and attendance, and instead denied pension based on countable income and net worth. The record, however, shows that the appellant's countable income for 2019 in the amount of $20,765 exceeded both the MAPR of $9,078.00 for a surviving spouse, and the MAPR of $14,509.00 for a surviving spouse at the aid and attendance rate. An SSA inquiry shows that SSA income increased to $1,739.60 a month in December 1, 2019. Counting the $17.92 a month received from IBEW, the Board finds that from December 1, 2019, the appellant had a countable income of $21,090.00 which exceeded the MAPR of $9,224 for a surviving spouse, and the MAPR of $14,742.00 for a surviving spouse at the aid and attendance rate. For these reasons, the Board finds that even if the appellant's net worth had been reduced below the net worth limit since she submitted her claim, entitlement to pension would still not be warranted based on countable income. For the reasons discussed above, entitlement to survivor's pension is denied. 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.