Citation Nr: 21042038 Decision Date: 07/11/21 Archive Date: 07/11/21 DOCKET NO. 16-19 092A DATE: July 11, 2021 ORDER Entitlement to nonservice-connected pension benefits for accrued benefits purposes is granted. FINDINGS OF FACT 1. The Veteran had a claim of entitlement to nonservice-connected disability pension benefits pending at the time of his death. 2. The Appellant filed her claim of entitlement to accrued benefits within one year of the Veteran's death. 3. From the date of claim to the Veteran's death in September 2008, the Veteran's reported total income, less unreimbursed medical expenses, did not exceed the applicable maximum annual pension rate (MAPR) for a Veteran in need of aid and attendance with one dependent. CONCLUSION OF LAW The criteria for entitlement to nonservice-connected pension based on the need for aid and attendance are met for accrued benefits purposes. 38 U.S.C. §§ 1502, 1503, 1513, 1521, 5121; 38 C.F.R. §§ 3.3, 3.23, 3.271, 3.272, 3.273, 3.274, 3.275, 3.1000. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty in the United States Navy from February 1950 to December 1953 and from March 1954 to April 1965; and in the United States Air Force from October 1965 to October 1970. During his periods of service, he earned the Korean President Unit Citation, National Defense Service Medal with one (1) Bronze Service Star, Korean Service Medal, United Nations Service Medal, Good Conduct Medal (Second Award), Air Force Good Conduct Medal, Small Arms Expert Marksmanship Ribbon, and Air Force Longevity Service Award with three (3) Bronze Oak Leaf Clusters. The Veteran died in September 2008. The Appellant is his surviving spouse. In her May 2016 substantive appeal, the Appellant requested a live videoconference hearing before the Board. In a May 2021 correspondence, the Appellant requested her hearing request be withdrawn. As such, her hearing request is deemed withdrawn. See 38 C.F.R. § 20.704(e) (2020). Entitlement to nonservice-connected pension benefits for accrued benefits purposes Accrued benefits are periodic monetary benefits authorized under law administered by VA, to which a payee was entitled at his death, under existing ratings or decisions, or based on evidence in the file at the date of death, and due and unpaid. 38 U.S.C. § 5121; 38 C.F.R. § 3.1000; see also Zevalkink v. Brown, 102 F.3d 1236 (Fed. Cir. 1996). For a claimant to prevail on an accrued benefits claim, the record must show that (i) the individual has standing to file a claim for accrued benefits; (ii) the VA payee had a claim pending at the time of death; (iii) the VA payee would have prevailed on the claim if he had not died; and (iv) the claim for accrued benefits was filed within one year of the VA payee's death. 38 U.S.C. §§ 5101(a), 5121; 38 C.F.R. § 3.1000, Jones v. West, 136 F.3d 1299 (Fed. Cir. 1998). A "pending claim" is a "claim which has not been finally adjudicated." 38 C.F.R. § 3.160(c). Pursuant to 38 C.F.R. § 3.160(d)(1), a legacy claim that is adjudicated by VA as either allowed or disallowed is considered finally adjudicated by whichever of the following occurs first: (1) expiration of the period in which to file a notice of disagreement, or (2) disposition on appellate review. A claim pending on the date of death is defined as "a claim filed with VA that had not been finally adjudicated by VA on or before the date of death." 38 C.F.R. § 3.1000(d); see also Taylor v. Nicholson, 21 Vet. App. 126, 129 (2007) (definitions of "pending claim" and "finally adjudicated claim" in 38 C.F.R. § 3.160 indicate that a pending claim is one that has not become final by the expiration of the one-year period of notice of an award or disallowance or by denial on appellate review). In this case, the Veteran filed a claim of entitlement to nonservice-connected pension benefits in May 2007. A July 2007 determination denied nonservice-connected pension with SMP. The Veteran requested submitted additional documentation in support of his claim in August 2007. A January 2008 determination again denied entitlement to nonservice-connected pension with SMP. However, the record reflects that the Veteran's pension claim was not finally adjudicated, as the period within which to file a notice of disagreement had not yet expired at the time of his death, and there was no disposition of the claim on appellate review. 38 C.F.R. §§ 3.160(d)(1), 3.1000(d). Accordingly, the Board finds that the Veteran's claim is considered to have remained pending as of his death in September 2008. The Appellant filed an application for accrued benefits within one year of the Veteran's death and has been properly substituted for the Veteran for purposes of processing the claim to completion. See 38 U.S.C. §§ 5121(c), 5121A; 38 C.F.R. §§ 3.1000(c), 3.1010(b). VA nonservice-connected pension benefits are payable to a veteran of a period of war who meets statutorily defined service, net worth, and annual income requirements; and who is permanently and totally disabled from nonservice-connected disability not the result of willful misconduct. 38 U.S.C. §§ 1502, 1503, 1521. Pension is also payable to each veteran of a period of war who is 65 years of age or older and who meets the service requirements of 38 U.S.C. § 1521 and under the conditions (other than the permanent and total disability requirement) applicable to pension paid under that section. 38 U.S.C. § 1513. Section 1521 further provides for an increased rate of pension, in the form of a SMP, when an otherwise eligible veteran is in need of regular aid and attendance or has a disability rated as permanent and total and (1) has an additional disability or disabilities ratable at 60 percent, or (2) is permanently housebound. 38 U.S.C. §§ 1521(d), (e); see also 38 C.F.R. § 3.351. In this case, the Veteran was born in August 1931. He served on active duty from February 1950 to December 1953, from March 1954 to April 1965, and from October 1965 to October 1970, with service during the Korean Conflict and Vietnam Eras. Thus, he meets the initial threshold criteria, as he is over 65 years of age and served during a period of war. See 38 C.F.R. § 3.2. Having reached this determination, the Board must consider the next criterion; namely whether the Veteran met the income requirements for eligibility for nonservice-connected pension benefits with SMP based on the need for regular aid and attendance. As an initial matter, the Board notes that in making its determination, it may only consider evidence contained in the claims file at the time of the Veteran's death. See 38 C.F.R. § 3.1000(a). This includes service department and VA treatment records, which are considered to be constructively in the claims, file at the date of death, even though they may not physically be in the file until after that date. 38 C.F.R. § 3.1000(d)(4). Accordingly, after the Veteran's death, VA cannot develop additional evidence that might better substantiate the claim of entitlement to accrued benefits. In light of these principles, the Board may only consider evidence contained in the claims file as of September 2008, the Veteran's date of death. 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. 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. 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). The applicable MAPR for a Veteran with one dependent at the aid and attendance rate was $21,615.00 in May 2007, the time the Veteran filed his initial claim. In his May 2007 VA Form 21-526, Veteran's Application for Compensation and/or Pension, the Veteran reported receiving income from Social Security Administration (SSA) benefits in the amount of $986.50 per month ($11,838.00 per year) for himself and $499.50 per month ($5,994.00 per year) for his spouse. The Veteran also reported receiving $1,246.00 per month ($14,952.00 per year) in military retired pay. Therefore, the Veteran had an annualized family income of $32,784.00. As to assets, the Veteran reported $2,000.00 in cash or non-interest bearing bank accounts; $7,500.00 in interest bearing bank accounts or certificates of deposit (CDs); and $1,550.00 in IRAs. He also reported that his spouse had $2,000.00 in cash or non-interest bearing bank accounts; $7,500.00 in interest bearing bank accounts or certificates of deposit (CDs); and $1,550.00 in IRAs. Unreimbursed medical expenses included monthly SMI or Medicare insurance premiums, which totaled $2,244.00 annually. The Veteran also identified paying $350.00 to Rite-Aid Pharmacy for medication. Additionally, a January 2008 VA Form 119, Report of Contact, shows that the Veteran was admitted to the nursing home in May 2007. Medicare paid the total facility costs from the date of admission to September 7, 2007. Tricare paid the total facility costs from September 8, 2007 to October 31, 2007. The Veteran applied for Medicaid in January 2008 and it was presumed that Medicaid would cover the total facility costs from the date application. Accordingly, the Veteran was liable for the facility costs totalling $9,536.22 covering the period from November 1, 2007 to January 7, 2008. The Veteran also identified paying $503.00 to Express Script for medication, $395.00 to AARP for insurance, and $1,302.00 for medical supplies. Unfortunately, the form does not identify the time period during which these expenses were incurred. As such, the Board is unable to consider these expenses in calculating the unreimbursed medical expenses. When reduced by five percent of the MAPR (or $715.00), the allowable medical expenses are $11,415.22. Accordingly, the Veteran's countable income was $21,368.78. (CONTINUED ON NEXT PAGE) Based on the information provided, the Veteran's countable income was less than the applicable MAPR for the period on appeal from the date of claim until his death in September 2008. Accordingly, in resolving reasonable doubt in the Appellant's favor, the Board finds that the Appellant's claim of entitlement to nonservice-connected pension benefits for accrued benefits purposes is warranted. A. S. CARACCIOLO Veterans Law Judge Board of Veterans' Appeals Attorney for the Board Tracy O. Joseph, 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.