Citation Nr: 0605171 Decision Date: 02/23/06 Archive Date: 03/01/06 DOCKET NO. 04-07 083 ) DATE ) ) On appeal from the Department of Veterans Affairs (VA) Regional Office (RO) in Winston-Salem, North Carolina THE ISSUE Alleged underpayment of VA service-connected disability compensation benefits for the period from December 1, 2001 to December 31, 2002. REPRESENTATION Appellant represented by: The American Legion ATTORNEY FOR THE BOARD C. L. Wasser, Counsel INTRODUCTION The veteran served on active duty from September 1990 to November 2001. This case comes to the Board on appeal from a July 2002 decision by the RO in Winston-Salem, North Carolina, which granted service connection for multiple disabilities. The veteran appealed, contending that the RO had underpaid his service-connected VA disability compensation. FINDINGS OF FACT The veteran received the proper amount of service-connected disability compensation during 2002; he is not owed any disability compensation for the month of December 2001. CONCLUSION OF LAW The veteran was not underpaid his VA service-connected disability compensation during the period from December 1, 2001 to December 31, 2002. 38 U.S.C.A. §§ 1114, 1115, 5111, 5304 (West 1991 & Supp. 2001, 2002); 38 C.F.R. §§ 3.31, 3.700 (2005). REASONS AND BASES FOR FINDINGS AND CONCLUSION VCAA The Veteran's Claims Assistance Act of 2000 (VCAA) and its implementing regulations provide that VA will assist a claimant in obtaining evidence necessary to substantiate a claim. See 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5107, and 5126 (West 2002 & Supp. 2005); 38 C.F.R. § 3.102, 3.156, 3.159, and 3.326 (2005). VA is not required to provide assistance to a claimant, however, if there is no reasonable possibility that such assistance would aid in substantiating the claim. 38 U.S.C.A. § 5103A (West 2002). As explained below, VA regulations do not provide for payment of disability compensation for the month in which service connection first became effective. In addition, the veteran does not dispute the amount of separation pay being recouped. Thus, there is no reasonable possibility that assistance in obtaining evidence would aid in permitting a grant of the benefit the veteran seeks. Therefore, VA is not required to assist the veteran by providing additional notice or obtaining evidence to support his claim. VAOPGCPREC 5-2004; see also Mayfield v. Nicholson, 19 Vet. App. 103 (2005) (a notice defect is not prejudicial if it can be demonstrated that a benefit could not possibly have been awarded as a matter of law); see also Sabonis v. Brown, 6 Vet. App. 426, 430 (1994). Analysis The veteran served on active duty from September 1990 to November 2001. His DD Form 214 reflects that he was given a separation payment of $14,566.47. Where payment of separation pay or special separation benefits under 10 U.S.C. § 1174a was made after September 30, 1996, VA will recoup from disability compensation an amount equal to the total amount of separation pay or special separation benefits less the amount of Federal income tax withheld from such pay. 38 C.F.R. § 3.700(a)(5) (2005). In a July 2002 rating decision, the RO granted service connection for multiple disabilities, effective December 1, 2001 (the day after the veteran's separation from service), resulting in a combined service-connected disability rating of 80 percent. By a letter to the veteran dated on August 1, 2002, the RO notified him of this award, and informed him that his total award amount (per month) was $1,324 (for a veteran with three dependents), with a payment start date of January 1, 2002, and that the total amount was being withheld due to his receipt of separation pay. The RO informed him that Section 653 of Public Law 104-201 provides that with respect to payments of separation pay received after December 5, 1991, VA shall recoup the amount of separation pay received by the veteran after withholding for Federal income tax. The RO informed him that after the separation pay was recouped, he would begin receiving monthly payments of VA compensation. Governing law and regulation provide that regardless of VA regulations concerning effective dates of awards, and except as provided in 38 C.F.R. § 3.31(c), payment of monetary benefits based on an original award of compensation may not be made for any period prior to the first day of the calendar month following the month in which the award became effective. However, beneficiaries will be deemed to be in receipt of monetary benefits during the period between the effective date of the award and the date payment commences for the purpose of all laws administered by VA. 38 U.S.C.A. § 5111 (West 2002); 38 C.F.R. § 3.31 (2005). The above provisions regarding the payment of monetary benefits do not apply in adjustments of awards, such as in the case of the termination of any withholding, reduction, or suspension by reason of recoupment. 38 C.F.R. § 3.31(c)(3)(i) (2005). From January 1, 2002 to November 30, 2002, the RO paid the veteran the monthly rate of compensation for an 80 percent service-connected disability rating for a veteran with three dependents ($1,324) (less the recoupment for separation pay). For the month of December 2002, the monthly rate was $1,341 per month. See 38 U.S.C.A. §§ 1114; 1115 (West 1991 & Supp. 2001, 2002). The RO determined that the amount of separation pay to be recouped was $10,487.86 (the amount of his service separation payment of $14,566.47, less Federal income tax), and noted that all of the veteran's VA disability compensation was withheld at the rate of $1,324 per month from January 1, 2002 through August 30, 2002 (although the RO incorrectly wrote July 30, 2002 in its August 2003 letter to the veteran), for a total of $10,592 (8 months times $1,324). (In a September 2003 letter to the veteran, the RO corrected its typographical error regarding the ending date for the period discussed above to August 30, 2002.) At the end of August 2002, the RO paid the veteran $101.14 ($10,592 minus $10,487.86), and this was his initial payment of VA disability compensation. During the remainder of 2002, the veteran received the full monthly amount of VA disability compensation at the 80 percent rate under 38 U.S.C.A. § 1114. VA payment records reflect that the veteran was paid $104.14 on August 30, 2002, $1,324 on October 1, 2002, $1,324 on November 1, 2002, $1,324 on November 29, 2002, and $1,341 on December 31, 2002. In its December 2003 statement of the case, the RO advised the veteran that VA disability compensation is paid in arrears (i.e., after the end of each month). The veteran essentially contends that he was due but not paid one month's worth of VA disability compensation of $1324. He does not dispute the amount of separation pay to be recouped, and does not dispute the monthly amount of VA disability compensation. Upon review of the veteran's correspondence, the origin of the confusion is clear. Specifically, on his substantive appeal (VA Form 9) dated in February 2004, the veteran stated that effective January 1, 2002 he was entitled to $1324 which represented payment for December 2001. Such is not the case. While the effective date for his award of service connection was December 1, 2001, governing law and regulation provide that payment of monetary benefits based on an original award of compensation may not be made for any period prior to the first day of the calendar month after the month in which the award became effective. 38 U.S.C.A. § 5111 (West 2002); 38 C.F.R. § 3.31 (2005). Hence, as the veteran's effective date was in December 2001, the entitlement to payment of compensation did not begin until January 1, 2002. As payment occurs after it accrues, the first payment of compensation was actually February 1, 2002, which represents the January 2002 compensation payment. Put another way, regardless of the actual day in December 2001 that service connection was established, entitlement to payment of compensation does not begin to accrue until January 1, 2002, the first of the month following the effective date of service connection. Thus, the first payment of compensation was on February 1, 2002, representing January's benefits. No compensation payment was due for the month of December 2001 pursuant to law. 38 U.S.C.A. § 5111 (West 2002); 38 C.F.R. § 3.31 (2005). In light of this, the veteran's computations were off by one month, and total recoupment occurred during the month of August (not July as stated by the veteran). The check for August (paid on August 31, 2002) was for the difference between the VA compensation rate of $1324 and the remainder of separation pay, resulting in a check for $104.14. Thereafter, the veteran received his full compensation rate of $1324 for the months of September, October, and November. Beginning in December 2002, his compensation increased based on a cost-of-living adjustment, and was properly paid. Accordingly, as there was no entitlement to payment for the month of December 2001, the Board concludes that the veteran was properly paid during 2002, and his claim is denied as a matter of law. See Sabonis v. Brown, 6 Vet. App. 426, 430 (1994). ORDER The claim alleging that there was an underpayment of VA disability compensation from December 1, 2001 to December 31, 2002 is denied. ____________________________________________ K. A. BANFIELD Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs