BVA9507677 
DOCKET NO.  93-10 465     )       DATE
          )
          )

On appeal from the decision of the
Department of Veterans Affairs Regional Office in St. Paul,
Minnesota

THE ISSUE

Whether the corpus of the veteran's estate precluded entitlement
to improved disability pension benefits with an aid and
attendance allowance, prior to April 1, 1992.

REPRESENTATION

Appellant represented by: The American Legion

ATTORNEY FOR THE BOARD

Anna Bryant, Counsel

INTRODUCTION

The veteran had active military service from March 1944 to
December 1945.

This matter came to the Board of Veterans' Appeals (Board) on
appeal from a September 1992 decision by the St. Paul, Minnesota
Regional Office (RO), which awarded the veteran improved
disability pension benefits with an aid and attendance allowance,
effective April 1, 1992.  The record reflects that although he
was found to be permanently and totally disabled for pension
purposes, to include the aid and attendance allowance, effective
in December 1990, his net worth precluded payment of pension
prior to April 1, 1992.

CONTENTIONS OF APPELLANT ON APPEAL

The veteran and his representative contend, in effect, that the
veteran's net worth was not so excessive as to bar payment of
improved disability pension benefits effective in October 1991.
In this regard, it is alleged that a contract for deed on the
veteran's former home, while it provides monthly income, cannot
be considered a liquid asset because if it were converted or
sold, a significant financial loss would be incurred because of
the current market conditions.  Additionally, the veteran alleges
that his financial resources were insufficient to meet his basic
needs given his life expectancy at the time he submitted his
claim for pension benefits in November 1990.  He maintains that
his entire monthly income was utilized to defray his living
expenses.  In addition, the veteran alleges that the RO's
decision was arbitrary and capricious inasmuch as he was not
provided the legal criteria governing net worth determinations.

DECISION OF THE BOARD

The Board, in accordance with the provisions of 38 U.S.C.A.
§ 7104 (West 1991), has reviewed and considered all of the
evidence and material of record in the veteran's claims file.
Based on its review of the relevant evidence in this matter, and
for the following reasons and bases, it is the decision of the
Board that an effective date for the payment to the veteran of
improved disability pension benefits with an aid and attendance
allowance, prior to April 1, 1992, is not warranted.

FINDINGS OF FACT

1.  All relevant evidence necessary for an equitable disposition
of the veteran's appeal has been obtained by the RO.

2.  The veteran, who was born in May 1908, has reported that he
has no dependents and resides in a nursing home.

3.  In a Corpus of Estate Determination, dated in November 1991,
it was determined that the veteran's estate consisted of
$21,355.33 in bank deposits and a contract for deed valued at
$13,193.40; that his estate totaled $34,548.73; and that he had
monthly income and expenses of $1,696 and $1,725.90,
respectively.

4.  The RO determined in December 1991 that the veteran's net
worth was a bar to receipt of improved disability pension
benefits, and it was reasonable that some part of his estate be
consumed for his living expenses.

5.  In an Eligibility Verification Report (EVR) submitted in
March 1992, the veteran reported that his net worth had declined
to $28,878.15 and that he had monthly expenses of $1,692.60 for
nursing home care.

6.  In September 1992, the veteran was awarded improved
disability pension benefits with an aid and attendance allowance,
effective April 1, 1992.

CONCLUSION OF LAW

An effective date for payment of improved disability pension with
an aid and attendance allowance prior to April 1, 1992, is not
warranted.  38 U.S.C.A. §§ 1521, 1522, 5107 (West 1991); 38
C.F.R. §§ 3.3, 3.274, 3.275(b) and (d), 3.660(a)(2) (1994).

REASONS AND BASES FOR FINDINGS AND CONCLUSION

Initially, we have determined that the veteran's claim is "well-
grounded" within the meaning of 38 U.S.C.A. § 5107(a).  That is,
we find that he has presented a claim which is plausible.  We are
also satisfied that all relevant facts have been properly
developed and that appellate review of the claim can proceed at
the present time.  Therefore, no further assistance to the
veteran is required to comply with the duty to assist him, as
mandated by 38 U.S.C.A. § 5107(a).  As a preliminary matter, the
Board acknowledges contentions advanced that the veteran has not
been provided the legal criteria governing net worth
determinations for purposes of improved disability pension
benefits.  However, the statement of the case provided to the
veteran in December 1992 included the provisions, citations and
explanations of all applicable VA regulations pertinent to his
claim.  These will be restated below.  The Board observes that
there are no hard and fast rules upon which corpus determinations
are based.  Rather, determinations focus on the concept of
whether it is reasonable for the veteran's estate to be consumed
for his maintenance.

The governing legal criteria in this case provide that pension
shall be denied or discontinued when the corpus of the estate of
the veteran is such that under all the circumstances, including
consideration of the annual income of the veteran, it is
reasonable that some part of the corpus of such estate be
consumed for the veteran's maintenance.  38 U.S.C.A. § 1522; 38
C.F.R. § 3.274(a).  The terms "corpus of estate" and "net worth"
means 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 the claimant's
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; life expectancy; number of dependents; and potential
rate of depletion, including unusual medical expenses for the
claimant and the claimant's dependents.  38 C.F.R. § 3.275.

Review of the evidentiary record reflects that prior to 1990, the
veteran had been in receipt of Section 306 pension benefits;
these benefits were discontinued and payment of compensation was
reinstated as the greater benefit, after the death of the
veteran's spouse.

In November 1990, the veteran submitted a claim seeking improved
disability pension benefits, after his entrance into a nursing
home.  On his completed EVR, the veteran reported that he was not
married and resided in a nursing home.  He indicated that he was
in receipt of gross monthly Social Security benefits of $459.60
and that during the period December 1, 1990 to November 30, 1991,
he expected interest and dividends of $315 and other income of
$1,400.34.  He also noted that he expected interest and dividends
of $300 and other income of $1,171.87 during the next calendar
year.  The veteran further reported cash in the bank of
$25,734.66 and a contract for deed valued at $14,834.75, and that
his net worth totaled $40,569.41.  He indicated monthly
unreimbursed medical expenses of $1,374.29, which included his
nursing home expenses.  On January 1991, he reported that he had
left the nursing home but was receiving board and care.

In response to a VA request for clarification, the veteran
submitted a subsequent EVR in October 1991.  At that time, he
indicated that he was in receipt of gross monthly Social Security
benefits of $483.90 and that for the period November 1, 1990 to
October 31, 1991, he expected interest and dividends of $1,050
and other income of $3,600.  The veteran further noted that for
the period November 1, 1991 to October 31, 1992, he expected
interest and dividends of $800 and other income of $3,600.  The
veteran also reported cash in the bank of $21,355.33 and a
contract for deed valued at $13,193.40, and that his net worth
totaled $34,548.73.  He indicated for the calendar years 1990 and
1991, he paid $6,575.29 in unreimbursed medical expenses.

In a Corpus of Estate Determination in November 1991, it was
reported that the veteran was 83 years old and resided in a
nursing home.  His life expectancy was determined to be about 6.6
years.  It was found that the veteran's monthly income totaled
$1,001.57, including VA compensation, and his monthly expenses
totaled $1,725.90.  However, it was also noted that the veteran
had bank deposits in the amount of $23,355.33 and a contract for
deed valued at $13,193.40 and that his assets totaled $34,548.73.
It was concluded that it was reasonable to expect that some of
his net worth should be used for the veteran's living expenses.

Basic entitlement to VA pension benefits exists if, among other
things, the veteran meets the applicable net worth requirements
and has annual income not in excess of the applicable maximum
annual pension rate.  38 U.S.C.A. § 1521; 38 C.F.R. §§ 3.3, 3.23;
Cutler v. Derwinski, 2 Vet.App. 336 (1992).  The Board recognizes
that there are no precise guidelines to be followed when
determining what size estate precludes the payment of pension.
However, when determining whether some portion of the veteran's
estate should be consumed for his own maintenance, consideration
is given to several factors, including the amount of his income,
and the size of the estate, together with its potential rate of
depletion.  These concepts are inherent in the pension program,
which is intended for those veterans who are in need of such
assistance.  In other words, pension is an income based program
for needy veterans, and their dependents.  It is deemed to be
inconsistent with the pension program to allow a veteran to
collect a pension while simultaneously retaining or adding to a
sizable estate.

At the time of the denial of the veteran's claim in December
1991, his net worth totaled $34,548.73.  The major portion of
that amount consisted of liquid assets.  It has been contended
that the veteran's contract for deed should not be considered as
a liquid asset because of the potential financially loss upon
sale of the document.  In this regard, the Board points out that
the veteran reported that the contract for deed was valued in
excess of $13,000 in November 1991 and that he was receiving
monthly interest income.  The veteran submitted no evidence
indicating the market value of the contract if it was sold.
Thus, the Board must consider the value of the contract as
reported by the veteran.  Moreover, he continues to own the
contract for deed and is receiving monthly interest income of
approximately $300.  The veteran's monthly income covered more
than half of his monthly expenses.  Although it is true that he
was forced to utilize his extensive savings to make up the
shortfall, this is only fair since, as noted above, the pension
program is not designed to allow veterans and their dependents to
conserve assets.

However, as a result of the subsequent depletion of his estate,
the veteran was awarded improved pension benefits with an aid and
attendance allowance, effective April 1, 1992, based on an EVR
submitted in March 1992.  The veteran's net worth had decreased
in excess of $5,000 during a period of five months.  This
substantial rate of depletion had not been previously reported.
In October 1991, the veteran reported a rate of depletion of net
worth of about $6,000 during a one year period.

The governing legal criteria specifically provide that when a
claim has been finally disallowed because of the corpus of estate
and net worth pursuant to the provisions of 38 C.F.R. § 3.274 and
entitlement is established on the basis of reduction in estate or
net worth, or increased rate of depletion of the estate, benefits
will not be paid for any period prior to the date of receipt of a
new claim.  The information reflecting the more rapid depletion
of the veteran's estate was not received until March 1992.  The
preponderance of the evidence establishes, therefore, that he is
not entitled to an effective date for the payment of VA pension
prior to April 1, 1992.  38 C.F.R. § 3.660(d).

ORDER

An effective date for payment of improved disability pension
benefits, to include the aid and attendance allowance, prior to
April 1, 1992, is denied.

          N. R. ROBIN
          Member, Board of Veterans' Appeals

The Board of Veterans' Appeals Administrative Procedures
Improvement Act, Pub. L. No. 103-271, § 6, 108 Stat. 740, ___
(1994), permits a proceeding instituted before the Board to be
assigned to an individual member of the Board for a
determination.  This proceeding has been assigned to an
individual member of the Board.

NOTICE OF APPELLATE RIGHTS:  Under 38 U.S.C.A. § 7266 (West
1991), a decision of the Board of Veterans' Appeals granting less
than the complete benefit, or benefits, sought on appeal is
appealable to the United States Court of Veterans Appeals within
120 days from the date of mailing of notice of the decision,
provided that a Notice of Disagreement concerning an issue which
was before the Board was filed with the agency of original
jurisdiction on or after November 18, 1988.  Veterans' Judicial
Review Act, Pub. L. No. 100-687, § 402 (1988).  The date which
appears on the face of this decision constitutes the date of
mailing and the copy of this decision which you have received is
your notice of the action taken on your appeal by the Board of
Veterans' Appeals.