BVA9504443 DOCKET NO. 93-03 712 ) DATE ) ) On appeal from the decision of the Department of Veterans Affairs Regional Office in Muskogee, Oklahoma THE ISSUE Whether the appellant's net worth is a bar to the receipt of death pension benefits. ATTORNEY FOR THE BOARD Susan S. Toth, Associate Counsel INTRODUCTION The veteran had active service from September 1943 to March 1946 and died in January 1990. This matter arises from a September 1990 corpus of estate determination, whereby the Regional Office (RO) determined that the appellant's net worth was a bar to the receipt of death pension benefits and that her income was excessive for the receipt of such benefits. CONTENTIONS OF APPELLANT ON APPEAL The appellant contends that she should not be barred from the receipt of death pension benefits based on net worth. She argues, in effect, that her business has consistently operated at a loss and that she does not have sufficient income to make up for the business losses. 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 the preponderance of the evidence is against the appellant's claim that her net worth is not a bar to the receipt of pension benefits. FINDINGS OF FACT 1. Attempts to obtain all relevant evidence necessary for an equitable disposition of the appeal have been made by the RO. 2. In August 1990, the appellant's income consisted of a monthly Social Security benefit of $585; she also had received $6,000 in interest income. 3. The appellant's net worth primarily consists of $75,000 in municipal bonds. 4. She is also the owner of a delicatessen which reportedly had gross revenues of $94,410 in 1989 with total expenses of $103,023. 5. Monthly living expenses total approximately $1,484, and she does not have or expect to have any unusual medical expenses. 6. Some portion of the corpus of the appellant's estate may reasonably be consumed in order to provide for her own maintenance. CONCLUSION OF LAW The corpus of the appellant's estate precludes entitlement to improved death pension benefits. 38 U.S.C.A. §§ 1543(a)(1), 5107(a) (West 1991); 38 C.F.R. §§ 3.274(c), 3.275 (1994). REASONS AND BASES FOR FINDINGS AND CONCLUSION The appellant satisfied the threshold requirement of presenting a well-grounded claim within the meaning of 38 U.S.C.A. § 5107(a). That is, she set forth a claim which was plausible. The Board is also satisfied that all relevant evidence has been properly developed, and that no further assistance is required to comply with the Department of Veterans Affairs' (VA) duty to assist as mandated by 38 U.S.C.A. § 5107(a). The appellant submitted an application for dependency and indemnity compensation or death pension in March 1990. She reported that she did not presently have monthly income but had applied for Social Security benefits. She had received $75,000 in life insurance and reported that she had net business income in 1988 which totaled $10,400. In August 1990, the appellant submitted various forms which contemporaneously documented her income and expenses. She reported that she owned a delicatessen which was expected to suffer a loss during that year based on its performance in 1989. The net loss for 1989 was $8,613. Since the business had lost money of late, her sole income consisted of a monthly Social Security benefit of $585 and interest income of $6,000. She did not specify the time period over which the interest income was received or the source thereof. Her monthly expenses totaled $1,484 and included the following: $400 for food, $152 for taxes, $75 for clothing, $300 for utilities, $60 for yard maintenance, $284 for health insurance and $213 for life insurance. She had no dependents and indicated that she did not expect any large and unusual medical expenses for herself. Assets consisted of $75,000 in municipal bonds and $300 cash or money in the bank. In her notice of disagreement and substantive appeal, the appellant stated that the $6,000 income previously reported was actually a one-time gift from her mother. Accordingly, her sole source of income was the Social Security benefit. In a statement of November 1992, the appellant reported that her business suffered a net loss from 1989 to 1991, inclusive. Under the applicable criteria, pension payable to a surviving spouse shall be denied or discontinued when the corpus of the estate of the surviving spouse is such that under all the circumstances, including consideration of the surviving spouse's annual income, it is reasonable that some part of the corpus of such estates be consumed for the surviving spouse's maintenance. 38 U.S.C.A. § 1543(a)(1); 38 C.F.R. § 3.274(c). The terms "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 (single family unit), including a reasonable lot area, and personal effects suitable to and consistent with the claimant's reasonable mode of life. 38 C.F.R. § 3.275(b). 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: Whether the property can be readily converted into cash at no substantial sacrifice; life expectancy; number of dependents who meet the definition of "member of the family"; potential rate of depletion, including unusual medical expenses for the claimant and the claimant's dependents. 38 C.F.R. § 3.275(d). These requirements are inherent in the concept of the pension program, which is intended to aid veterans and their dependents who are unable to provide themselves with the basic necessities. Consideration of the above mentioned factors is necessary since it is inconsistent with the pension program to allow a claimant to collect a pension while simultaneously retaining a sizable estate. The Board recognizes that there are no precise guidelines the VA must follow in determining what size estate precludes payment of pension benefits. According to the financial information of record in 1990, monthly expenses ($1,484) exceeded income ($585) by $899. However, this does not include the amount of interest income received from the municipal bonds. Moreover, she has indicated that she owns a delicatessen, the value of which has not been reported. Nevertheless, even if it were to be assumed solely for the sake of argument that she only had Social Security income and the $75,000 in municipal bonds, it is clear that her estate would not be depleted for several years even if she continued her current level of spending. After consideration of other relevant factors, the Board concludes that the appellant's net worth is presently a bar to the receipt of pension benefits. She reported that she has no dependents and expects no unusual medical expenses. She also reported that her net worth was invested in municipal bonds, which can be converted to cash without substantial sacrifice. The Board is unable to consider the appellant's life expectancy at this time since she failed to provide her age or birth date to the VA in her original application for compensation or pension or in her marriage certificate. However, her age would not be a determinative factor in this case since her assets are substantial enough that they would not be depleted within a short period of time. Aside from the factors mentioned above, the appellant has not provided the VA with notice of any other circumstances which would point to the conclusion that her net worth should not be considered a bar to the award of death pension benefits. Upon considering that the appellant has $75,000 in liquid assets which would not be consumed for several years, it would not be unreasonable to expect that some of her assets be consumed in order to provide for her own maintenance. Accordingly, it is the decision of the Board that the preponderance of the evidence is against the appellant's claim that her net worth is not a bar to the receipt of pension benefits. At such time when her net worth has been substantially reduced, she may reopen her claim for entitlement to death pension benefits. In view of the Board's decision that net worth is a bar to the receipt of pension benefits, a decision on the issue of excess income, even if it were favorable to the appellant, would be of no force and effect. Therefore, the Board need not address that issue in connection with this appeal. ORDER The appellant's net worth is a bar to the receipt of pension benefits; therefore, the appeal is denied. C. W. SYMANSKI 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.