08-24 909

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