Citation Nr: A25035355 Decision Date: 04/16/25 Archive Date: 04/16/25 DOCKET NO. 240103-405787 DATE: April 16, 2025 ORDER As the termination then reduction of Veteran's pension benefits, effective October 1, 2012, was proper, the claim of entitlement to pension benefits is denied. FINDING OF FACT VA satisfied is duty to notify the Veteran of the proposed termination of his VA pension benefit prior to the actual termination; and having been notified of the evidence required to substantiate the claim, the Veteran did not provide sufficient evidence of marital status and medical expenses to determine eligibility for continued entitlement to nonservice-connected pension benefits. CONCLUSION OF LAW The termination of the Veteran's nonservice-connected pension benefits, effective October 1, 2012, was proper. 38 U.S.C. §§ 1503, 1521; 38 C.F.R. §§ 3.3, 3.23, 3.262, 3.271, 3.272, 3.274, 3.275. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty in the United States Army from July 1974 to April 1975. It is noted that VA determined that he is incompetent and appointed his sister as his fiduciary in October 2021. See VA 21-555 Certificate of Legal Capacity (October 2021). However, a claimant who has been found incompetent by VA to handle funds and has been assigned a fiduciary by VA may file a claim, submit statements, and appeal a decision without permission of the fiduciary. 38 C.F.R. § 13.30. The rating decision on appeal was issued in May 2023 and constitutes an initial decision; therefore, the modernized review system, also known as the Appeals Modernization Act (AMA), applies. In the January 2024 VA Form 10182, Decision Review Request: Board Appeal (Notice of Disagreement), the Veteran elected the Direct Review docket. Therefore, the Board may only consider the evidence of record at the time of the May 2023 agency of original jurisdiction (AOJ) decision on appeal. 38 C.F.R. § 20.301. Any evidence submitted after the AOJ decision on appeal cannot be considered by the Board. 38 C.F.R. §§ 20.300, 20.301, 20.801. If the Veteran would like VA to consider any evidence that was submitted that the Board could not consider, the Veteran may file a Supplemental Claim (VA Form 20-0995) and submit or identify this evidence. 38 C.F.R. § 3.2501. If the evidence is new and relevant, VA will issue another decision on the claim, considering the new evidence in addition to the evidence previously considered. Id. Specific instructions for filing a Supplemental Claim are included with this decision. The Board notes that the Veteran identified October 2023, as the AOJ's decision on appeal; however, his pension claim was most recently denied in a May 2023 decision. See Notification Letter (May 2023); VA Form 10182 (January 2024). Since the Veteran's January 2024 VA Form 10182 was received with a year of that May 2023 rating decision, the Board will apply a liberal reading, and it constitutes a timely appeal of the pension claim and is appropriately before the Board at this time. See 38 U.S.C. § 7105; 38 C.F.R. §§ 20.201, 20.202, 20.203. Pension The purpose of VA pension benefits is to provide a subsistence income for the surviving spouses of veterans of a period of war who were totally disabled. Pension benefits are based on total family income. Recipients of pension income are required to report any changes in income and net worth, and number or status of their dependents in a timely fashion. 38 U.S.C. § 1521. The maximum annual rate of Improved (nonservice-connected) pension payable to a beneficiary varies according to the number of dependents. 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 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). 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). Every claimant has the right to written notice of the decision made on his or her claim, the right to a hearing, and the right of representation. 38 C.F.R. § 3.103(a). Except as otherwise provided in 38 C.F.R. § 3.103(b)(3), no award of compensation, pension, or dependency and indemnity compensation shall be terminated, reduced, or otherwise adversely affected unless the beneficiary has been notified of such adverse action and has been provided a period of 60 days in which to submit evidence for the purpose of showing that adverse action should not be taken. 38 C.F.R. § 3.103(b)(2). 38 C.F.R. § 3.103(b)(3) states that in lieu of advance notice and opportunity for a hearing, VA will send a written notice to the beneficiary or his or her fiduciary at the same time it takes an adverse action if an adverse action is based solely on factual and unambiguous information or statements as to income, net worth, or dependency or marital status, failure to return a required eligibility verification report, evidence reasonably indicates that a beneficiary is deceased, the beneficiary renounces VA benefits, the beneficiary returns to active service, or due to garnishment. See 38 C.F.R. § 3.103(b)(3)(i)-(vi). Title 38 of the Code of Federal Regulations, section 3.105(h) states, that except as otherwise specified at 38 C.F.R. § 3.103(b)(3), where a reduction or discontinuance of benefits is warranted by reason of information received concerning income, net worth, dependency, or marital or other status, a proposal for the reduction or discontinuance of benefits will be prepared setting forth all material facts and reasons. The beneficiary will be notified at his or her latest address of record of the contemplated action and furnished detailed reasons for the contemplated action and will be given 60 days for the presentation of additional evidence to show that the benefits should be continued at their present level. Unless otherwise provided by 38 C.F.R. § 3.105(i), if additional evidence is not received within that period, final adverse action will be taken, and the award will be reduced or discontinued effective as specified under the provisions of 38 C.F.R. §§ 3.500-3.503. Title 38 of the Code of Federal Regulations, section 3.105(i)(1) states, that in the advance written notice concerning the proposed action under 38 C.F.R. § 3.105(h), the beneficiary will be informed that he or she will have an opportunity for a predetermination hearing, provided that such a request for such a hearing is received by VA within 30 days from the date of the notice. If a timely request is received, VA will notify the beneficiary in writing of the time and place of the hearing at least 10 days in advance of the scheduled hearing date. If a predetermination hearing is timely requested, benefit payments shall be continued at the previously established level pending a final determination concerning the proposed action. Only once the predetermination procedures specified in 38 C.F.R. § 3.105(h) have been completed will VA take final action. 38 C.F.R. § 3.105(i)(2). Propriety of termination of nonservice-connected pension benefits. A March 2023 VA letter notified the Veteran that VA proposed to terminate his pension benefits effective October 1, 2012 and then continue pension benefits at a reduced rate beginning November 1, 2013. See MAP-D Development Letter (March 2023). A May 2023 VA letter notified the Veteran that the proposed action was effectuated, explaining why and how to obtain review of this decision. This appeal arises from the Veteran's disagreement with the May 2023 decision that terminated his pension benefits. See VA Form 10182 (January 2024). The Board concludes that the termination of nonservice-connected pension benefits, effective October 1, 2012, and then reduced beginning November 1, 2013, was proper. 38 U.S.C. § 1521; 38 C.F.R. §§ 3.3, 3.23, 3.155, 3.271, 3.272. A September 2009 VA decision granted the Veteran pension benefits, with two dependents, effective March 1, 2008. See Notification Letter (September 2009). In his notification letter, the Veteran was informed that he was responsible to keep VA informed right away if his income changed, or if he gained or lost a dependent. Of relevance, in September 2021, the Veteran was deemed not competent to handle his VA affairs. See Rating Decision (September 2021); Notification Letter (October 2021). The Veteran's sister was appointed his fiduciary. See VA 21-555 Certificate of Legal Capacity (October 2021). During a field examination with the fiduciary, the Veteran reported that he was no longer married. VA 27-0820 Report of General Information (October 2021). He was advised to submit a copy of his divorce decree. In October 2021, VA notified the Veteran that because he reported he was no longer married, the Veteran needed to submit information regarding the date and place of divorce. See MAP-D Development Letter (October 2021). The letter also notified the Veteran that he needed to submit an updated medical expense report, because his spouse's medical expenses were used to calculate his annual income. Letters sent to the Veteran and his fiduciary in May 2022, August 2022, and October 2022 again requested information regarding the Veteran's divorce and his medical expenses. See Notification Letter (May 2022; August 2022); MAP-D Development Letter (October 2022). A March 2023 VA letter notified the Veteran that the AOJ proposed to terminate his pension benefits retroactively, effective October 1, 2012. The letter explained that the proposal to terminate pension benefits was based on the Veteran's report that he was divorced and had not provided the requested information. See Notification Letter (March 2023). The Veteran did not reply. A May 2023 decision reveals that VA effectuated the termination and then reduction of benefits from October 1, 2012. See Notification Letter (May 2023). A review of the record reflects that applicable notice procedures were followed prior to the termination to the Veteran's pension award based on evidence showing a change in his marital status and resulting change in countable household income, as explained below. First, the Board finds that the notice requirements of 38 C.F.R. § 3.103 and § 3.105 were met. VA notified the Veteran of the proposed pension benefit adjustment in a March 2023 letter, which set forth all material facts and reasons. The record does not suggest that either the Veteran did not receive the March 2023 proposed pension adjustment/termination letter or that such was returned as undeliverable. VA afforded the Veteran 60 days to provide additional information on his marital status and medical expenses. VA did not receive the necessary requested forms prior to the expiration of the 60-day period. Here, the March 2023 notification letter proposed to terminate and adjust pension benefits effective October 1, 2012, on the basis that VA had received evidence from the Veteran that he was no longer married. VA informed the Veteran that he had 60 days to submit evidence, and also explained how to receive a personal hearing. VA informed the Veteran that if a hearing request was received within 30 days from the date of the notification letter, VA would continue payments at the present rate until the hearing was held and testimony reviewed, but that this could also result in the creation of an overpayment which must be repaid. VA further notified the Veteran that he could request a hearing after 30 days, but that VA may continue with the proposed action. Further, both the Veteran and his fiduciary were sent letters in May 2022, August 2022, and October 2022, which explained that the Veteran's pension benefits were being recalculated to account for his change in marital status and that information regarding the Veteran's divorce and his medical expenses was required. No such information was provided during the period on appeal. Given such, the Board finds that the notice requirements have been satisfied. Second, regarding the question of continued entitlement to pension benefits, the Board finds the Veteran did not provide adequate verification of marital status and unreimbursed medical expenses to substantiate continued entitlement to pension benefits. Though requested several times by VA, neither the Veteran nor his fiduciary supplied the requested information during the period on appeal. Accordingly, the Board is unable to determine both the Veteran's countable household income and any unreimbursed medical expenses for the period from October 1, 2012. While VA has a statutory duty to assist in developing evidence pertinent to a claim, the Veteran also has a duty to assist and cooperate with VA in developing evidence; the duty to assist is not a one-way street. See Wood v. Derwinski, 1 Vet. App. 190 (1991). VA's duty must be understood as a duty to assist an appellant in developing his or her claim, rather than a duty on the part of VA to develop the entire claim with the appellant performing a passive role. Turk v. Peake, 21 Vet. App. 565, 568 (2008). Based on the foregoing, the Board finds that the AOJ properly terminated then reduced the Veteran's pension benefits effective October 1, 2012. The Veteran did not provide the requisite information and evidence to support his continued entitlement to pension. Accordingly, the claim is denied. However, the Veteran is reminded that he may file a Supplemental Claim using the instructions provided with this decision. C.A. SKOW Veterans Law Judge Board of Veterans' Appeals Attorney for the Board T.F., 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.