08-24 909

Opinion

Citation Nr: 1008498 Decision Date: 03/08/10 Archive Date: 03/17/10

DOCKET NO. 08-24 909 ) DATE ) )

On appeal from the Department of Veterans Affairs Regional Office in Columbia, South Carolina

THE ISSUE

Whether the appellant's income is excessive for the receipt of nonservice-connected death pension benefits.

ATTORNEY FOR THE BOARD

Nancy S. Kettelle, Counsel

INTRODUCTION

The Veteran had active service from May 1948 to February 1952 and from March 1954 to January 1955. He died in October 2002, and the appellant is his surviving spouse.

This matter comes to the Board of Veterans' Appeals (Board) on appeal from an August 2007 decision of the Department of Veterans Affairs (VA) Regional Office (RO) in Columbia, South Carolina.

FINDING OF FACT

The appellant's countable annual family income for a surviving spouse with no dependents, minus unreimbursed medical expenses, exceeds the maximum annual pension rate (MAPR) for death pension benefits for the August 2007 to September 2008 period.

CONCLUSION OF LAW

The criteria for entitlement to nonservice-connected death pension benefits during the August 2007 to September 2008 annualization period are not met. 38 U.S.C.A. §§ 1503, 1521, 1541 (West 2002 & Supp. 2009); 38 C.F.R. §§ 3.3(b)(4), 3.21, 3.23, 3.271, 3.272, 3.273 (2009).

REASONS AND BASES FOR FINDING AND CONCLUSION

VA duty to notify and assist

The provisions of the Veterans Claims Assistance Act of 2000 (VCAA), codified at 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a), and as interpreted by the Courts have been fulfilled by information provided to the appellant by correspondence dated in September 2007. That letter notified the appellant of VA's responsibilities in obtaining information to assist in completing her claim and identified her duties in obtaining information and evidence to substantiate her claim. (See 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a)); Quartuccio v. Principi, 16 Vet. App. 183 (2002); Pelegrini v. Principi, 18 Vet. App. 112 (2004). See also Mayfield v. Nicholson, 19 Vet. App. 103, 110 (2005), reversed on other grounds, 444 F.3d 1328 (Fed. Cir. 2006), Dingess/Hartman v. Nicholson, 19 Vet. App. 473 (2006); Mayfield v. Nicholson (Mayfield II), 20 Vet. App. 537 (2006). The Board also notes that 38 C.F.R. § 3.159 was revised, effective May 30, 2008, removing the sentence in subsection (b)(1) stating that VA will request the claimant provide any evidence in the claimant's possession that pertains to the claim. 73 Fed. Reg. 23,353-23,356 (Apr. 30, 2008).

Although the September 2007 notice followed the initial RO decision in this matter, the Board finds that this error was not prejudicial to the appellant because the actions taken by VA after providing the notice have essentially cured the error in the timing of notice. Not only has the appellant been afforded a meaningful opportunity to participate effectively in the processing of her claim and been given ample time to respond, the claim has been readjudicated by way of the statement of the case issued in July 2008. For these reasons, it is not prejudicial to the appellant for the Board to proceed to finally decide this appeal as the timing error did not affect the essential fairness of the adjudication. See Prickett v. Nicholson, 20 Vet. App. 370, 376 (2006) (the issuance of a fully compliant notice followed by readjudication of the claim, such as a statement of the case or supplemental statement of the case is sufficient to cure a timing defect).

The Board acknowledges that VA did not inform the appellant of how disability evaluations and effective dates are assigned. The record, however, shows that any prejudice that failure caused was harmless, as the Board concludes that the preponderance of the evidence is against the appellant's claim for death pension benefits.

The RO also provided assistance to the appellant as required under 38 U.S.C.A. § 5103A and 38 C.F.R. § 3.159(c), as indicated under the facts and circumstances in this case. Although requested to do so, the appellant did not submit a completed medical expense report, and she has not made the RO or the Board aware of any change in circumstances or additional evidence that needs to be obtained in order to fairly decide this appeal. She has not requested a hearing, and she has not argued that any error or deficiency in the accomplishment of the duty to assist has prejudiced her in the adjudication of her appeal. See Shinseki v. Sanders, 129 S.Ct.1696 (2009) (reversing prior case law imposing a presumption of prejudice on any notice deficiency, and clarifying that the burden of showing that an error is harmful, or prejudicial, normally falls upon the party attacking the agency's determination.); Mayfield v. Nicholson, 19 Vet. App. 103 (2005), rev'd on other grounds, 444 F. 3d 1328 (Fed. Cir. 2006). Hence, no further notice or assistance to the appellant is required to fulfill VA's duty to assist in the development of the claim.

Moreover, the enactment of the VCAA has no material effect on the adjudication of the claim currently before the Board. The law, not the evidence, controls the outcome of this appeal. Dela Cruz v. Principi, 15 Vet. App. 143 (2001) (enactment of the VCAA does not affect matters on appeal when the question is one limited to statutory interpretation); Sabonis v. Brown, 6 Vet. App. 426 (1994). Furthermore, VAOPGCPREC 5-2004, 69 Fed. Reg. 59989 (2004), holds that under 38 U.S.C.A. § 5103(a), the VA is not required to provide notice of the information and evidence necessary to substantiate a claim where that claim cannot be substantiated because there is no legal basis for the claim or because undisputed facts render the claimant ineligible for the claimed benefit, and that under 38 U.S.C.A. § 5103A, the VA is not required to assist a claimant in developing evidence to substantiate a claim where there is no reasonable possibility that such aid could substantiate the claim because there is no legal basis for the claim or because undisputed facts render the claimant ineligible for the claimed benefit.

The Board notes that the appellant was advised of the need to provide information regarding any changes in her income or medical expenses in the August 2007 notice letter from the RO, and this included the request that should her circumstances change, she should complete and return the enclose VA Form 21-8416, Medical Expense Report, and VA Form 21-0518-1, Improved Pension Eligibility Verification Report (Surviving Spouse With No Children). In this regard, following this notice and the RO's VCAA September 2007 notice letter, the appellant submitted only a statement regarding her copayment for prescription medicines during May 2007 and stated she has no other information or evidence to substantiate her claim. As such, the Board finds that a remand to procure any further information regarding the appellant's income or expenses is not warranted. See Wood v. Derwinski, 1 Vet. App. 190 (1991), aff'd on reconsideration, 1 Vet. App. 406 (1991) (noting that the duty to assist is not a one-way street and the claimant has to cooperate to protect her interests). There has been no prejudice to the appellant that would warrant a remand, and the appellant's procedural rights have not been abridged. Bernard v. Brown, 4 Vet. App. 384 (1993).

Governing Laws and Regulations for Death Pension

Death pension is available to the "surviving spouse" of a Veteran because of his nonservice-connected death, as long as the Veteran met certain wartime service requirements or the Veteran was at the time of death was receiving (or entitled to receive) VA disability compensation or retirement pay for a service-connected disability subject to certain income limitations. See 38 U.S.C.A. §§ 101, 1521(j), 1541 (West 2002 & Supp 2009); 38 C.F.R. §§ 3.3(b)(4), 3.23(a)(5), (d)(5) (2009).

Basic entitlement exists if, among other things, the surviving spouse's income is not in excess of the applicable maximum annual pension rate (MAPR) specified in 38 C.F.R. § 3.23 as changed periodically and reported in the Federal Register. See 38 U.S.C.A. § 1521 (West 2002 & Supp. 2009); 38 C.F.R. §§ 3.3(b)(4), 3.23(a), (b), (d)(5) (2009). The MAPR is published in Appendix B of VA Manual M21-1 (M21-1) and is to be given the same force and effect as if published in VA regulations. 38 C.F.R. §§ 3.21, 3.23. 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 surviving spouse. 38 U.S.C.A. §§ 1503, 1521; 38 C.F.R. §§ 3.3, 3.23(b) (2009). Fractions of dollars will be disregarded in computing annual income. 38 C.F.R. § 3.271(h).

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.A. § 1503(a); 38 C.F.R. § 3.271(a). Social Security Administration (SSA) income is not specifically excluded under 38 C.F.R. § 3.272. Such income is therefore included as countable income.

Unreimbursed medical expenses in excess of five percent of the MAPR, which have been paid, may be excluded from a surviving spouse's income for the same 12-month annualization period to the extent they were paid. 38 C.F.R. § 3.272(g)(2)(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, medical insurance premiums themselves, as well as the Medicare deduction, may be applied to reduce countable income.

For the purpose of determining initial entitlement, 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 12. 38 C.F.R. § 3.273(a). Recurring income, received or anticipated in equal amounts and at regular intervals such as weekly, monthly, quarterly and which will continue throughout an entire 12-month annualization period, will be counted as income during the 12-month annualization period in which it is received or anticipated. 38 C.F.R. § 3.271(a)(1). Nonrecurring income (income received on a one-time basis) will be counted, for pension purposes, for a full 12-month annualization period following receipt of the income. 38 C.F.R. § 3.271(c). The amount of any nonrecurring countable income received by a beneficiary shall be added to the beneficiary's annual rate of income for a 12-month annualization period commencing on the effective date on which the nonrecurring income is countable. 38 C.F.R. § 3.273(c).

As of December 1, 2006, the MAPR as to death pension for a surviving spouse without a dependent child was $7,329. See 38 C.F.R. § 3.23(a)(5); M21-1, Part I, Appendix B; (http://www.vba.va.gov/bln/21/Rates/pen0206.htm). Five percent of this amount is $366.

As of December 1, 2007, the MAPR as to death pension for a surviving spouse without a dependent child was $7,498. See 38 C.F.R. § 3.23(a)(5); M21-1, Part I, Appendix B; (http://www.vba.va.gov/bln/21/Rates/pen0207.htm). Five percent of this amount is $375.

Analysis - Death Pension

Initially, the record reveals that the Veteran had the requisite wartime service, his death was nonservice- connected, he was receiving VA compensation benefits, and the appellant has the minimal net worth for pension. See 38 C.F.R. §§ 3.3(b)(4). The basis of the RO's denial of death pension benefits was predicated on the surviving spouse's excessive income deemed greater than the MAPR in the year she applied for benefits.

The appellant filed this claim for nonservice-connected death pension benefits in August 2007. Therefore, the Board must calculate her family income for the 12-month annualization period after August 2007. See 38 C.F.R. § 3.271(a).

On her August 2007 death pension application (VA Form 21- 534), the appellant reported her net worth as zero. She reported Social Security as her only source of income and indicated that her gross monthly income from the SSA was $1202.50 per month and that SSA took out $93.50 per month for Medicare premiums. In an August 2007 inquiry to SSA, the RO confirmed these amounts. At no time during the appeal has the appellant indicated that she has any other source of income. The appellant's yearly income as of the date of her claim has been calculated as $14,430, and her yearly Medicare premium was $1,122.

In August 2007, the appellant submitted an August 2007 statement from Greenville Hospital System, which said that according to the hospital's records the appellant owed the hospital a delinquent debt in the amount of $3,735.45. In an accompanying statement, the appellant stated that she did not have proof of payment because she did not have the funds to pay the bill. In this regard, because there is no indication that the appellant has paid the hospital, the $3,735.45 cannot be considered an unreimbursed medical expense.

In September 2007, the RO requested that the appellant complete and return an enclosed VA Form 21-8416, Medical Expense Report, and that she include all her past year's medical expenses, using only expenses that she had paid in full and were not reimbursable.

The appellant did not complete and return the requested Medical Expense Report. She did, in September 2007, submit a monthly summary for May 2007 and dated in June 2007 from the AARP Medicare Rx Plan. The summary lists two prescriptions for which medication was dispensed for 30 days with $6.40 as the total amount paid by the appellant. With this submission, the appellant stated that she had no other information or evidence to give VA to substantiate her claim. From this summary, the Board infers that based on these figures, the appellant's unreimbursed yearly prescription expenses as of the date of her claim may be calculated in the amount of $76.80 ($6.40 x 12). Adding the total of her reported unreimbursed medical expenses ($76.80) with the total for the Medicare premiums ($1,122), the total for yearly unreimbursed medical expenses was $1198.80.

Medical expenses can only be deducted from income to the extent that they are in excess of five percent of the MAPR. Here the total medical expenses ($1198.80) exceed five percent of the MAPR ($366) by $832.80 ($1198.80 - $366). Subtracting this amount, i.e., $832.80 (allowable medical expenses) from the $14,430 yearly income yields a final annual countable income of $13,597.20.

Thus, the surviving spouse's countable income ($13,597.20) exceeds the applicable December 2006 MAPR ($7,329) as to death pension for a surviving spouse without a dependent child. The surviving spouse's countable income ($13,597.20) would also exceed the applicable December 2007 MAPR ($7,498).

The Board is sympathetic to the surviving spouse's claim and her particular circumstances recognizing that she states she needs health care she cannot afford and that she knows others who are receiving substantial VA benefits. This cannot, however, change the fact that in order to be eligible for death pension, a surviving spouse's countable income must be less than the annual death pension rate determined by law. VA is bound by the applicable law and regulations as written. 38 U.S.C.A. § 7104(c). Here, the evidence indicates that the appellant's countable income was in excess of the applicable pension rate for death pension, and there is no evidence to the contrary. On those facts, the appellant would not be legally entitled to death pension benefits for the 12-month annualization period from August 2007 to September 2008. See Sabonis v. Brown, 6 Vet. App. 426, 430 (1994). The appeal must, therefore, be denied.

ORDER

Due to excessive income, entitlement to nonservice-connected death pension benefits is denied.

____________________________________________ RENÉE M. PELLETIER Veterans Law Judge, Board of Veterans' Appeals

Department of Veterans Affairs