Citation Nr: 0002823 Decision Date: 02/04/00 Archive Date: 02/10/00 DOCKET NO. 93-08 764 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Louisville, Kentucky THE ISSUE Whether the termination of the veteran's Section 306 disability pension benefits due to excessive net worth, effective January 1, 1990, was proper. REPRESENTATION Appellant represented by: Division of Veterans Affairs, Kentucky ATTORNEY FOR THE BOARD R. A. Caffery, Counsel INTRODUCTION The veteran served on active duty from July to December 1945. In an April 1992 corpus of estate determination, the Department of Veterans Affairs (VA) Regional Office Louisville, Kentucky, held that the veteran's net worth was a bar to continued receipt of Section 306 disability pension benefits. In July 1992, the regional office terminated the veteran's award of Section 306 disability pension, effective January 1, 1990. He appealed from that decision. The case was initially before the Board of Veterans' Appeals (Board) in April 1995 when it was remanded for further action. Supplemental statements of the case were issued to the veteran in August and December 1995. The case is again before the Board for appellate consideration. FINDINGS OF FACT 1. All relevant evidence necessary for an equitable disposition of the veteran's appeal has been obtained by the regional office. 2. The veteran had been in receipt of protected Section 306 disability pension of $212 per month for many years. His wife was included as a dependent on his award. His awards were based on his reports that his Social Security benefits constituted his only income, and that he had no significant net worth. 3. In 1991 the regional office determined that the veteran had income and assets in addition to what he had reported. In April 1992, it was held that his net worth was a bar to continued receipt of Section 306 disability pension effective in January 1990. 4. Information of record indicates that the veteran was born in August 1921 and his spouse was born in March 1928. 5. The assets of the veteran and his spouse as of 1989 consisted of several certificates of deposit totaling about $40,000. 6. The countable income of the veteran as of 1989 consisted of Social Security benefits of some $4,000 per year and interest from the certificates of deposit of about $3,200. 7. The estate of the veteran was not so large as of 1989 as to preclude the continued payment of Section 306 pension without further depletion when all pertinent factors are considered. CONCLUSION OF LAW The net worth of the veteran as of 1989 did not constitute a bar to the receipt of Section 306 disability pension benefits. Thus, his Section 306 disability pension benefits were not properly terminated, effective January 1990 due to excessive net worth. 38 U.S.C.A. § 522, as constituted on December 31, 1978, 5107 (West 1991); 38 C.F.R. §§ 3.262, 3.263 (1999). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Board notes that it has found the veteran's claim to be "well grounded" within the meaning of 38 U.S.C.A. § 5107(a); effective on and after September 1, 1989. That is, the Board finds that he has presented a claim which is plausible. The Board is also satisfied that all relevant facts regarding the claim have been properly developed. The record reflects that the veteran had been in receipt of protected Section 306 disability pension of $212 per month for several years. His wife was included as a dependent on his award. His awards had been based on his reports that his only income consisted of Social Security benefits and that he had no significant net worth. In 1991 the regional office received information that the veteran had received income from sources other than his Social Security benefits and had a significant net worth, consisting of several certificates of deposit. In April 1992, it was determined that his net worth constituted a bar to the continued receipt of Section 306 disability pension benefits. Accordingly, in July 1992 the regional office terminated the veteran's award of Section 306 disability pension, effective in January 1990. The veteran appealed from that decision. The law provides for consideration of the corpus of the estate of a claimant in determining entitlement to pension. Payment of pension is not permitted where the claimant's estate is such that under all the circumstances, including consideration of his income, it is reasonable that some part of the corpus be consumed for the claimant's maintenance. 38 U.S.C.A. § 522, as constituted on December 31, 1978; 38 C.F.R. § 3.263. In determining the corpus of estate of a veteran for Section 306 pension purposes, only the estate of the veteran will be considered. "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 including a reasonable lot area and personal effects suitable to and consistent with the claimant's reasonable mode of life. In determining whether some part of the claimant's estate should be consumed for his maintenance, consideration will be given to the amount of the claimant's income, together with the following factors: Whether the property can be readily converted into cash at no substantial sacrifice; ability to dispose of property as limited by community property law; life expectancy; number of dependents; and potential rate of depletion, including unusual medical expenses for the claimant and his dependents. 38 C.F.R. § 3.263. In this case, the record indicates that the veteran was born in 1921 and his spouse was born in 1928. Although the record is somewhat unclear, the evidence indicates that, as of 1989, the veteran had several certificates of deposit in a bank totaling about $40,000. Although bank records reflect that the certificates of deposit were in the veteran's name only, he has testified that they were equitably jointly owned by himself and his wife. His explanation for the discrepancy is credible and the Board can accept his claim that they are joint assets. What is clear is that as of 1989, the family income consisted of only his Social Security benefits of about $4,000 per year and about $3,200 in interest from the certificates of deposit. Thus, the total family income was only about $7,200. In a May 1992 report of expenses, the veteran listed monthly expenses totaling $839 or about $10,000 per year. Even accounting for the passage of time, given the low, poverty level, income and the reasonable expenses shown, it is plausible that the veteran's monthly expenses have been significantly greater than his monthly income, particularly when unexpected or non-recurrent expenses, such as medical expenses are considered. In view of the aforementioned matters, it appears that the claimed depletion of the veteran's estate is plausible. In October 1995, the veteran indicated that the value of their certificates of deposit had dropped significantly, although increased income since 1991 has been reported. In view of the size of the veteran's estate as of 1989, and his limited income at that time, along with consideration of the other equitable factors set out in 38 C.F.R. § 3.263, the Board can only conclude that the net worth of the veteran at that time was not excessive for continued entitlement to Section 306 disability pension benefits. Accordingly, his Section 306 disability pension benefits were not properly terminated, effective in January 1990, due to excessive net worth. 38 U.S.C.A. § 522, as constituted on December 31, 1978; 38 C.F.R. §3.263. In arriving at its decision in this regard, the Board has resolved all doubt in favor of the veteran. 38 U.S.C.A. § 5107. The Board would caution that this decision is limited to the finding set out above. Obviously, since the Section 306 disability pension was terminated as of January 1990, there has been no need to consider the veteran's ongoing eligibility for Section 306 disability pension benefits after that time. Any award action resultant from this decision will require further clarification of their subsequent countable family income. The finding in this decision that their net worth was not excessive in 1989 does not preclude a finding that it, or their income, did not become excessive at some later time, if that is consistent with more current financial information. ORDER The termination of the veteran's Section 306 disability pension benefits due to excessive net worth, effective January 1, 1990, was not required. The appeal is granted. ROBERT D. PHILIPP Member, Board of Veterans' Appeals