Citation Nr: 1313867	
Decision Date: 04/25/13    Archive Date: 05/03/13

DOCKET NO.  08-16 526	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Regional Office in Portland, Oregon


THE ISSUE

Entitlement to apportionment of the Veteran's disability compensation benefits on behalf of a dependent child.


ATTORNEY FOR THE BOARD

D. Johnson, Counsel


INTRODUCTION

The Veteran served on active duty from April 1987 to April 1993.

The appellant is a former spouse of the Veteran, who claims apportionment of his disability compensation benefits on behalf of their dependent child, CMJ.
This matter is before the Board of Veterans' Appeals (Board) on appeal of an August 2006 decision of a Department of Veterans Affairs (VA) Regional Office (RO). 

The appellant requested a hearing before a Veterans Law Judge, to be held at the RO.  A hearing was scheduled for June 2010, but the appellant failed to appear, without explanation or request to reschedule.  The hearing request is therefore considered withdrawn.  38 C.F.R. § 20.704(d).

In October 2010, the Board remanded the case for further development, which has been completed.  Stegall v. West, 11 Vet. App. 268, 271 (1998). 


FINDINGS OF FACT

1.  The Veteran's dependent child, CMJ, was born on August [redacted], 1990.  She has not resided with the Veteran since 1993.

2.  CMJ reached the age of 18 on August [redacted], 2008, and was pursuing a course of instruction at an educational institution approved by VA upon reaching her 18th birthday.

3.  CMJ elected to receive Chapter 35, Dependent's Educational Assistance (DEA) effective September 22, 2008.

4.  Prior to September 22, 2008, the Veteran was reasonably discharging his responsibility to support his child, CMJ.

5.  Prior to September 22, 2008, the award of a special apportionment would cause undue financial hardship on the part of the Veteran.

CONCLUSION OF LAW

The criteria for apportionment of the Veteran's disability compensation benefits have not been met.  38 U.S.C.A. §§ 101(31), 5307, 7105A (West 2002); 38 C.F.R. §§ 3.1, 3.57, 3.450, 3.451, 20.3023 (2012). 


REASONS AND BASES FOR FINDINGS AND CONCLUSION

The Veterans Claims Assistance Act of 2000 (VCAA)

The VCAA, codified in part at 38 U.S.C.A. §§ 5103, 5103A, and implemented in part at 38 C.F.R § 3.159, amended VA's duties to notify and to assist a claimant in developing information and evidence necessary to substantiate a claim. 

This appeal concerns a benefit provided under Chapter 53, Title 38, United States Code.  The rules governing VA notice and assistance upon receipt of a claim for benefits, as outlined by the VCAA and in the provisions listed above, do not apply to claims for benefits provided under chapters other than Chapter 51.  See Sims v. Nicholson, 19 Vet. App. 453, 456 (2006).  That is, the VCAA does not apply to decisions regarding how benefits are paid.  However, VA rules include special procedural requirements for simultaneously contested claims, such as apportionment.  See 38 C.F.R. § 19.100, 19.101, and 19.102. 

Upon the filing of a notice of disagreement in a simultaneously contested claim, all interested parties and their representatives are to be furnished a copy of the statement of the case.  See 38 C.F.R. § 19.101.  When a substantive appeal is filed in a simultaneously contested claim, the content of the substantive appeal is furnished to the other contesting parties, to the extent that it contains information directly affecting the payment or potential payment of the benefit which is the subject of the contested claim.  See 38 U.S.C.A. § 7105A; 38 C.F.R. § 19.102. 
The appellant initially filed a notice of disagreement September 2006.  The RO issued a statement of the case in May 2008 to the appellant and the Veteran.  The appellant filed a substantive appeal in June 2008; the Veteran was not sent a copy of the content of the appellant's substantive appeal.  Nevertheless, as the appellant's claim is denied, this result is completely favorable to the Veteran.  Therefore, VA's error is harmless and without prejudice to the Veteran.  A remand to provide the Veteran with corrective notice would serve no useful purpose.  All known and available records relevant to the issue on appeal have been obtained and are associated with the claims file.  Neither the Appellant nor the Veteran is prejudiced by a decision on the claim at this time. 

Analysis

Under 38 U.S.C.A. § 5307, if a Veteran's child is not in his custody, all or any part of the compensation payable on account of the Veteran may be apportioned as may be prescribed by the Secretary.  

A child is defined as an unmarried person who is (i) under the age of 18 years; (ii) before the age of 18 years became permanently incapable of self support; or (iii) after attaining the age of 18 years and until completion of education or training (but not after attaining the age of 23 years) is pursuing a course of instruction at an approved educational institution.  38 U.S.C.A. § 101(4)(A); 38 C.F.R. § 3.57(a).  The allowance is generally discontinued when a dependent child turns 18, or when the child turns 23 if he or she is enrolled in school.  38 C.F.R. §§ 3.503, 3.667. 

It is not disputed that at the time of the appellant's claim and during the course of the appeal, CMJ qualified as a "child of the Veteran."  She was born on August 21, 1990, and was pursuing a course of instruction at an educational institution approved by VA since reaching her 18th birthday on August 21, 2008.  See 38 U.S.C.A. 101(4)(A), 104(a); 38 C.F.R. § 3.57. 

VA regulations provide for two types of apportionments.  The first type is a "general" apportionment, which may be paid under the circumstances set forth in 38 C.F.R. § 3.450.  More specifically, all or any part of the compensation payable on account of any veteran may be apportioned if the veteran is not residing with his spouse or children, and the veteran is not reasonably discharging his responsibility for the spouse's or children's support.  38 U.S.C.A. § 5307(a)(2); 38 C.F.R. § 3.450(a)(1)(ii).  It is not necessary for the claimant to establish the existence of hardship in order to obtain an apportionment under 38 C.F.R. § 3.450.  See Hall v. Brown, 5 Vet. App. 294 (1993).  No apportionment will be made where a veteran is providing for dependents.  38 C.F.R. § 3.450. 

The second type is a "special" apportionment.  Under this type of apportionment, without regard to any other provision regarding apportionment, where hardship is shown to exist, compensation may be apportioned between the veteran and his dependents on the basis of the facts of the individual case as long as it does not cause undue hardship to the other persons in interest.  

In determining the basis for special apportionment, consideration is to be given to such factors as the amount of VA benefits payable, other income and resources of the veteran and those dependents on whose behalf the apportionment is claimed, and the special needs of the veteran, his dependents and the apportionment claimants.  Apportionment of more than 50 percent of the veteran's benefits is ordinarily considered to constitute undue hardship on him or her; but apportionment of less than 20 percent of his or her benefits is ordinarily considered insufficient to constitute a reasonable amount for any apportionee.  38 C.F.R. § 3.451.  

Both of these types of apportionments (either "general" or "special" apportionment) are payable to a spouse or dependent.  38 U.S.C.A. § 5307(a)(2); 38 C.F.R. §§ 3.450(a)(1)(ii), 3.451.  

In February 2006 the appellant, the mother of the Veteran's dependent child CMJ, submitted a claim for apportionment of the Veteran's benefits.  She contended that the Veteran was providing no support for his child.  

As of February 2006, the Veteran was receiving VA compensation for multiple service-connected disabilities at a combined rate of 90 percent.  He was also in receipt of a total disability rating based on individual unemployability.  The Veteran's VA compensation also included an additional amount for his three dependent children, one of whom was CMJ.

Of record is a February 1997 Petition for Dissolution of Marriage.  In this petition, the parties (the Veteran and the appellant) stipulated that the Veteran was receiving cash payments under Title IV-A of the Social Security Act and was unable to pay child support for his only dependent child CMJ.  The parties stipulated that the Veteran should not be obligated to pay a child support obligation, unless and until he no longer received cash payments under Title IV-A of the Social Security Act. 

In an October 1997 Divorce Decree, the parties again stipulated that the Veteran was receiving cash payments under Title IV-A of the Social Security Act.  The Divorce Decree indicated that no child support award was entered in the Decree unless and until the Veteran was no longer receiving cash payments under Title IV-A of the Social Security Act or Supplemental Security Income Programs. 

In a March 2004 Declaration of Status of Dependents, VA Form 21-686c, the Veteran indicated that he paid spousal support in the amount of $450.00.  He listed his dependents as CMJ, L.J., and R.J.  

In a March 2007 Stipulated Order and Money Award for Child Support, the Veteran and the appellant stipulated that the Veteran was to pay $250.00 a month in cash to the appellant as child support for CMJ.  This award was made effective beginning April 1, 2007, and was to continue until CMJ reached 18 years of age, or emancipation, or until she reached 21 years of age, so long as she was attending school.

A December 2008 Order shows the Veteran's obligation to pay child support to the appellant for CMJ was reduced to zero ($0) effective September 1, 2008.

The Veteran has submitted copies of money orders showing that he paid child support to the appellant in cash, in the amount of $250.00 for the following months: September 2006 to November 2006; January 2007; March 2007 to December 2007; and February 2008.  He also paid an additional sum of $250.00 to the appellant in the month of August 2007 for CMJ's birthday in the form of a money order, and the sum of $5000.00 in January 2007 in the form of a cashier's check.  

In a November 2010 statement, the Veteran stated that the January 2007 cashier's check for $5000.00 was to offset any possible future disputes regarding child support for CMJ.  He further explained that pursuant to the Divorce Decree, CMJ had been receiving a portion of his Social Security benefits, an approximate sum of $500.00 a month, until 2005.  In 2005, this amount was adjusted due to the addition of the Veteran's twins born in June 2003 (L.J. and R.J.), and all three dependent children were then awarded one-third of the award each.  CMJ's portion of these benefits was terminated when she turned 18.   

The appellant contends that apportionment is warranted because the Veteran has not provided any support for his child, CMJ, since she was three years of age even though CMJ has been included as a dependent on his award of VA compensation benefits.  

At the outset, VA regulations provide that apportionment will not be authorized unless and until a claim for an apportionment is filed on the child's behalf.  38 C.F.R. § 3.458(g).  A claim for apportionment was not received from the appellant until February 2006.  In addition, evidence of record shows that effective September 22, 2008, CMJ elected to receive Ch. 35 benefits.  Accordingly, CMJ is not entitled to receive an apportionment of the Veteran's disability compensation award beginning from September 22, 2008.  See 38 C.F.R. § 20.3023.

The first question before the Board then is whether the Veteran was reasonably discharging his responsibility to support his child, CMJ, at the time the appellant submitted her claim in February 2006 and prior to September 22, 2008.  

Based on the evidence presented, it appears that the Veteran was reasonably discharging his responsibility to support CMJ at the time the appellant submitted her claim in February 2006.  See 38 U.S.C.A. § 5307(a)(2) (West 2002); 38 C.F.R. § 3.450(a)(1)(ii) (2012).  Prior to the appellant's apportionment claim, the Veteran was providing for CMJ through the cash payments he received under Title IV-A of the Social Security Act.  He was also paying $250.00 a month in cash since at least September 2006, several months prior to the March 2007 stipulated child support agreement.  He continued to pay a sum of $250.00 per month in cash for CMJ's support pursuant to the March 2007 stipulated child support agreement, and even contributed above and beyond that which was required.  The $5000.00 cashier's check in January 2007 was sufficient to cover the 11 remaining months of 2008, all of 2009, and through March 2010-well beyond the date that his child support obligation ended in September 2008.  This evidence shows the Veteran was reasonably discharging his responsibility to support CMJ.  Thus, there is no basis to award the appellant a general apportionment of the Veteran's benefits pursuant to 38 C.F.R. § 3.450 (2012). 

Having found that the Veteran was reasonably discharging his responsibility to support his child CMJ from February 2006 to September 22, 2008, the next question is whether the appellant is entitled to a special apportionment due to hardship during that period.

In a statement received in April 2006, the appellant stated that she received an unspecified amount wages from work and $166.00 in Social Security.  She also stated that she owned land in Hawaii valued at $50,000.00 and a trailer worth $3000.00.  She also indicated that she had not received any money from the Veteran within the last three months.

The Veteran did not respond to an April 2006 RO development letter regarding his financial status, however, at the time of the appellant's request for apportionment, his monthly VA compensation award was $2552.00.

A copy of a Financial Status Report (FSR), VA Form 5655 dated in August 2005 shows the Veteran reported income totaling $3477.00 from Social Security and VA compensation.  He also listed monthly expenses totaling $3552.00, which included rent, food, utilities, child support payments, and credit cards payments.  His monthly expenses resulted in a net negative income of $75.00 month.

In September 2006 VA received evidence from the appellant regarding her financial status.  She submitted a 2005 W-2 Wage and Tax Statement which showed income of $23,479.00, and a July 2006 bill showing a monthly space rental fee for her trailer, which totaled $548.00.  The appellant also submitted evidence showing monthly car payments of $117.00 from May 2002 to March 2003, and an undated and unsigned loan agreement for a trailer home showing future monthly installment payments of $1125.00.  She did not provide any additional information regarding her monthly expenses for 2005 and 2006.

The Veteran submitted an Employment Questionnaire, VA Form 21-4140 in February 2008.  He indicated that he worked as a clerk from June 1, 2007, to June 8, 2007, for a total of $333.00 or $400.00.  He also submitted a letter from an attorney's office dated in March 2007 showing a child support payment obligation in the amount of $353.00 for his two other dependent children, L.J., and R.J.  The letter indicated that the Veteran was current in his payments.  

In February 2008, the Veteran submitted copies of VA and SSA correspondence showing that as of December 2007, his new monthly rate of VA compensation was $2765.00.  His new rate for Social Security benefits was $1057.00, effective for the year 2008.  He also completed a Declaration of Status of Dependents showing he paid $353.00 a month in child support payments for his dependent children L.J. and R.J., and $250.00 a month for CMJ.  All three dependent children also received a monthly total of $165 each from his SSA income.  

On VA Form 21-0788, Information Regarding Apportionment of Benefit's Award, also received in February 2008, the Veteran listed monthly income of $3822.00 from VA compensation and Social Security benefits.  He listed monthly expenses totaling $3636.00, which included mortgage payment, food, utilities, telephone, clothing, medical expenses, and more.

The Veteran also submitted a FSR, VA Form 5655 in February 2008.  He reported income totaling $3822.00 from Social Security and VA compensation.  He also listed monthly expenses totaling $4036.00, which included additional expenses such as child support payments and credit cards payments.  His monthly expenses resulted in a net negative income of $214.00 month.

The Veteran also submitted a statement in which he explained that, in addition to the cash child support payments for his dependent children L.J., R.J., and CMJ, all three dependents were also receiving part of his SSA income.  He further explained that he had willingly agreed to the modified child support award to pay the monthly amount of $250.00 for CMJ, even though he was not obligated to do so pursuant to the original divorce decree and child support agreement.  He argued that an apportionment would cause undue hardship as he would be left homeless and behind in his bills. 

In January 2011 the appellant submitted 1040 tax returns showing wages earned in 2006 were $26,756.00; wages earned in 2007 were $26,756.00; wages earned in 2008 were $31,164.00; and wages earned in 2009 were $23,642.00.  She did not provide any additional information regarding her monthly expenses for the years from 2006 through 2008.

Turning to consideration of a special apportionment, the Board reiterates that effective September 22, 2008, CMJ elected to receive Ch. 35 benefits.  For this reason, no apportionment of the Veteran's disability compensation may be awarded from September 22, 2008.  See 38 C.F.R. § 20.3023.  

VA regulations provide that a Veteran's compensation may be specially apportioned to the Veteran's dependents as long as such apportionment would not cause undue hardship to other persons in interest including the veteran.  38 C.F.R. § 3.451.  Here, the award of a special apportionment from February 2006 to September 22, 2008, would cause undue financial hardship on the part of the Veteran.  As shown, the Veteran's reported expenses exceeded his income for the period in question, and no evidence of employment or other income has been submitted by the appellant to show otherwise.  Thus, it appears that even a minimal level of apportionment of the Veteran's compensation benefits would have caused undue hardship to the Veteran.  As the total benefit payable to the Veteran did not permit the payment of an additional amount to the appellant for the period in question, the Veteran's benefits cannot be apportioned.  38 C.F.R. §§ 3.451, 3.458(a) (2012).  

The Board is sympathetic to the appellant's claim and has considered her contention that she experiences difficulty making ends meet each month.  However, based on the appellant's self-reported income and expenses, she appears to have had sufficient income to cover her and CMJ's essential living expenses from February 2006 to September 22, 2008.  The Board has relied solely on the limited information provided by the appellant in evaluating her financial need and the fact that no accounting of this evidence reveals that her income was insufficient such that a special apportionment is warranted.  As this specific, albeit limited, financial information is more probative than her generic statements regarding financial need, financial hardship was not demonstrated from February 2006 to September 22, 2008, such that a special apportionment is warranted.

The "benefit-of-the-doubt" rule does not apply in simultaneously contested claims (such as this case) because the benefit of the doubt cannot be given to both an appellant and a veteran.  See Elias v. Brown, 10 Vet. App. 259, 263 (1997). 

ORDER

Entitlement to apportionment of the Veteran's disability compensation benefits on behalf of a dependent child is denied.



____________________________________________
RONALD W. SCHOLZ
Veterans Law Judge, Board of Veterans' Appeals



Department of Veterans Affairs