Citation Nr: 0904513 Decision Date: 02/09/09 Archive Date: 02/13/09 DOCKET NO. 06-08 909 ) DATE ) ) On appeal from the Department of Veterans Affairs (VA) Regional Office (RO) in Lincoln, Nebraska THE ISSUE Entitlement to restoration of special monthly compensation (SMC) based on aid and attendance. REPRESENTATION Appellant represented by: Disabled American Veterans ATTORNEY FOR THE BOARD Christopher Maynard, Counsel INTRODUCTION The veteran had active service from March 1980 to October 1980. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a May 2005 RO decision which terminated entitlement to SMC based on the need for aid and attendance. FINDINGS OF FACT 1. SMC based on aid and attendance had been in effect for more than five years at the time of the May 2005 rating decision which terminated the VA benefit. 2. The November 2004 rating decision that proposed the reduction, and the May 2005 rating decision and February 2006 statement of the case failed to consider the provisions of 38 C.F.R. § 3.344 prior to the termination action. CONCLUSION OF LAW The RO's termination of SMC, effective from August 1, 2005, was not implemented in accordance with law and is restored, effective August 1, 2005. 38 U.S.C.A. §§ 501, 1155, 5103, 5104, 5103A, (West 2002 & Supp. 2008); 38 C.F.R. §§ 3.105(e), 3.159, 3.344(a), (c), 3.350, 3.352 (2008). REASONS AND BASES FOR FINDINGS AND CONCLUSION Given the favorable outcome below, assessment of VA's application of the Veterans Claims Assistance Act and attendant due process issues is not necessary. Congress has provided that a veteran's disability rating, including SMC shall not be reduced unless an improvement in the disability is shown to have occurred. 38 U.S.C.A. § 1155 (West 2002). The United States Court of Appeals for Veterans Claims (Court) has consistently held that when an RO reduces a veteran's disability rating without following the applicable regulations, the reduction is void ab initio. See Greyzck v. West, 12 Vet. App. 288, 292 (1999). Prior to reducing a veteran's SMC based on aid and attendance, VA is required to comply with several general VA regulations applicable to all rating-reduction cases, regardless of the rating level or the length of time that the rating has been in effect. 38 C.F.R. §§ 4.1, 4.2, 4.10, 4.13 (2008); see also Brown v. Brown, 5 Vet. App. 413, 420 (1993). These provisions impose a clear requirement that VA rating reductions be based upon review of the entire history of the veteran's disability. See Schafrath v. Derwinski, 1 Vet. App. 589, 594 (1991). Such review requires VA to ascertain, based upon review of the entire recorded history of the condition, whether the evidence reflects an actual change in the disability and whether the examination reports reflecting such change are based upon thorough examinations. Thus, in any rating-reduction case, to include SMC, not only must it be determined that an improvement in a disability has actually occurred but also that that improvement actually reflects an improvement in the veteran's ability to function under the ordinary conditions of life and work. See Faust v. West, 13 Vet. App. 342, 350 (2000). In certain rating reduction cases, VA benefits recipients are to be afforded greater protections, set forth in 38 C.F.R. § 3.344 (2008). That section provides that rating agencies will handle cases affected by change of medical findings or diagnosis, so as to produce the greatest degree of stability of disability evaluations consistent with the laws and VA regulations governing disability compensation and pension. However, the provisions of 38 C.F.R. § 3.344 specify that ratings on account of diseases subject to temporary or episodic improvement, such as, psychiatric disorders will not be reduced on any one examination, except in those instance where all the evidence of record clearly warrants the conclusion that sustained improvement has been demonstrated. The regulations provide further, that these considerations are required for ratings which have continued for long periods at the same level (five years or more), and that they do not apply to disabilities which have not become stabilized and are likely to improve. Reexaminations disclosing improvement, physical or mental, in these disabilities will warrant a reduction in rating. The law provides that where a rating reduction was made without observance of law, although a remand for compliance with that law would normally be an adequate remedy, in a rating reduction case the erroneous reduction must be vacated and the prior rating restored. Schafrath, 1 Vet. App. at 595. Under 38 C.F.R. § 3.344, the RO must find the following: (1) based on a review of the entire record, the examination forming the basis for the reduction is full and complete, and at least as full and complete as the examination upon which the rating was originally based; (2) the record clearly reflects a finding of material improvement; and (3) it is reasonably certain that the material improvement found will be maintained under the ordinary conditions of life. See Kitchens v. Brown, 7 Vet. App. 320 (1995); Brown, 5 Vet. App. 413, 419 (1993). Generally, when reduction in the evaluation of a service- connected disability is contemplated and the lower evaluation would result in a reduction or discontinuance of compensation payments, a rating proposing the reduction or discontinuance will be prepared setting forth all material facts and reasons. The beneficiary must be notified at his or her latest address of record of the contemplated action and furnished detailed reasons therefore. The beneficiary must be given 60 days for the presentation of additional evidence to show that compensation payments should be continued at the present level. 38 C.F.R. § 3.105(e) (2008). By rating action in November 2004, the RO proposed to terminate the veteran's SMC based on aid and attendance. The veteran was informed of the proposal by letter dated December 21, 2004, and was given 60 days to respond. In the instant case, the critical issue is whether 38 C.F.R. § 3.344 applies - that is, whether the veteran's SMC was in effect more than five years at the time of the termination of benefits in the May 2005 rating decision. In this regard, the veteran was granted SMC based on the need for aid and attendance by the Board in June 2000, and the RO subsequently assigned an effective date of May 20, 1997. Therefore, the veteran's SMC rating was in effect for well over five years prior to May 2005, and 38 C.F.R. § 3.344 applies. See Brown v. Brown, 5 Vet. App. 413 (1993) (measured from the effective date of the disability, not the rating decision). Thus, the reduction is void because the provisions of 38 C.F.R. § 3.344 were not met. In fact, there was no suggestion of any consideration of 38 C.F.R. § 3.344 at all. The veteran was not given notice of 38 C.F.R. § 3.344 in the February 2006 statement of the case (SOC). The decision to reduce was not in accordance with law because the RO did not make a finding that the VA examination used as a basis for the reduction was as full and complete as the examination on which the SMC rating was established. There were also no findings that it was reasonably certain that the material improvement found would be maintained under the ordinary conditions of life. Therefore, the RO erred in its May 2005 rating action by terminating the veteran's SMC based on the need for aid and attendance under 38 C.F.R. § 3.352 (2008), effective from August 1, 2005. Accordingly, SMC based on the need for aid and attendance is restored, effective August 1, 2005. ORDER Restoration of SMC based on the need for aid and attendance is granted effective August 1, 2005. ____________________________________________ WILLIAM YATES Acting Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs