Citation Nr: 1125065 Decision Date: 07/01/11 Archive Date: 07/14/11 DOCKET NO. 09-13 022 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in San Diego, California THE ISSUE Entitlement to an apportionment to the Veteran's father of the Veteran's Department of Veterans Affairs (VA) benefits during a period of his incarceration. ATTORNEY FOR THE BOARD T. Mainelli, Counsel INTRODUCTION The Veteran served on active duty from July 1996 to July 2000. The appellant is the Veteran's father. This matter comes before the Board of Veterans' Appeals (Board) on appeal from an August 2008 special apportionment decision by the VA Regional Office (RO) in San Diego, California. FINDINGS OF FACT 1. The Veteran, who is incarcerated, has a combined 20 percent service-connected disability rating. 2. The available $120 per month in VA compensation benefits being withheld from the Veteran has been apportioned to his minor daughter; these benefits do not, in any way, reasonably discharge the obligation to the child. 3. An apportionment of any or all of the Veteran's withheld VA compensation benefits to the Veteran's father, whose current living needs are met, would cause undue hardship to the child. CONCLUSION OF LAW The criteria for an apportionment of the Veteran's withheld VA compensation benefits on behalf of the Veteran's father have not been met. 38 U.S.C.A. §§ 5307, 5313 (West 2002); 38 C.F.R. §§ 3.250, 3.450, 3.451, 3.452, 3.655 (2010). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran's father asserts that he is a dependent of the Veteran who is entitled to an apportionment of withheld VA compensation benefits. At the outset, the Board observes that the Veterans Claims Assistance Act of 2000 (VCAA) imposes obligations on VA in terms of its duty to notify and assist claimants. When VA receives a complete or substantially complete application for benefits, it is required to notify the claimant and the representative, if any, or any information and medical or lay evidence that is necessary to substantiate the claim. 38 U.S.C.A. § 5103(a) (West 2002); 38 C.F.R. § 3.159(b) (2010); Quartuccio v. Principi, 16 Vet. App. 183 (2002). However, the United States Court of Appeals for Veterans Claims (Court) has held that the VCAA does not apply to decisions regarding how benefits are paid. Sims v. Nicholson, 19 Vet. App. 453, 456 (2006). An apportionment decision involves a determination as to how existing benefits are paid, such as between a veteran and his dependents in the case at hand. Under the reasoning in Sims, the requirements of the VCAA have been met in this case. Nonetheless, the Board notes that the Veteran's father was provided a generic notice in January 2008 which advised him of the evidentiary requirements. Importantly, VA provided the Veteran's father VA Form 21-0788 (INFORMATION REGARDING APPORTIONMENT OF BENEFICIARY'S AWARD) to assist him in establishing his dependency status. The Veteran and his father have provided the necessary information to decide this claim. The Board next notes that full apportionment of the Veteran's current withheld VA compensation has been awarded to the custodian of his minor child pursuant to the Veteran's own recent wishes. See Veteran's statement received in December 2009. As this appeal is denied, there is no prejudice to the Veteran or his minor child by not observing the contested claim procedures. See 38 U.S.C.A. § 7105(a); 38 C.F.R. §§ 19.100 - 19.102, 20.500 - 20.504. Historically, the Veteran submitted his original application for VA compensation in July 2000. At that time, he reported child A.S.G. who was born in December 1997 and living with a custodian. For this child, the Veteran contributed $200 per month for her support. The Veteran also had a child S.G. born in January 2000 who apparently lived with himself and his spouse. The Veteran did not identify his father as a dependent. The Veteran later had a child S.R.G. (for whom benefits have been apportioned) born in January 2004. See Veteran's VA Form 21-686c (DECLARATION OF STATUS OF DEPENDENTS) received in June 2008. In pertinent part, a September 2000 RO rating decision awarded the Veteran VA compensation at the 20 percent rate. In June 2003, a warrant was issued for the Veteran's arrest on a homicide charge. The Veteran was arrested in September 2003, and has been since incarcerated. In December 2004, the RO reduced the Veteran's VA compensation to the equivalent of the 10 percent rate as set forth in 38 U.S.C.A. § 1114(a) as a result of his incarceration. See 38 C.F.R. § 3.665 (d). At that time, the monthly rate for VA compensation at the 10 percent level was $112. The current monthly rate is $120. The Veteran initially requested VA to award his withheld VA compensation to his father. However, he subsequently asked VA to award this VA compensation to the custodian of his minor child, which the RO has accomplished. See 38 U.S.C.A. § 5307; 38 C.F.R. § 3.452(a) (if the veteran's child is not in his custody, all or any part of compensation payable on account of any veteran may be apportioned as is prescribed by the Secretary of Veterans Affairs). The Veteran's father seeks a part or all of these benefits for himself and/or the Veteran's dependent children (although they do not live with him). All or any portion of the withheld VA benefits may be paid to the Veteran's dependants as an apportionment on the basis of individual need. 38 U.S.C.A. § 5313(b)(1); 38 C.F.R. § 3.665(e)(1). See also Dixon v. Nicholson, 20 Vet. App. 544, 547 (2006). In determining individual need, consideration is given to such factors as the apportionee claimant's income and living expenses, the amount of compensation available to be apportioned, the needs and living expenses of other apportionee claimants as well as any special needs, if any, of all apportionee claimants. Id. The provisions of 38 C.F.R. § 3.250 govern whether a parent can be classified as a dependent parent. This regulation provides that conclusive dependency of a parent (other than one who is residing in a foreign country) will be held to exist where the monthly income does not exceed: (1) $400 for a mother or father not living together; (2) $660 for a mother and father, or remarried parent and spouse, living together: (3) $185 for each additional "member of the family" as defined in paragraph (b)(2). 38 C.F.R. § 3.250(a)(1). Where the income exceeds the monthly amounts stated in paragraph (a)(1) of this section, dependency will be determined on the facts in the individual case under the principles outlined in paragraph (b) of this section. In such cases, dependency will not be held to exist if it is reasonable that some part of the corpus of the claimant's estate be consumed for his or her maintenance. 38 C.F.R. § 3.250(a)(2). The initial question presented on appeal concerns whether the Veteran's father may be deemed a "dependent" for VA purposes. Unfortunately, this issue has not been fully developed. The Veteran's father has filled out two separate VA Form 21-0788s, received in February 2008 and June 2008. He denies receiving any income from any source other than $115 per month from the Veteran himself as well as a significant amount of financial assistance from a friend. See Veteran's VA Form 21-4138 received in May 2008 (reporting that those VA benefits being paid to him are being provided to his father). For purposes of this decision, the type of financial assistance being provided to the Veteran's father does not count as "income" for VA purposes. 38 C.F.R. § 3.272(b) (the value of maintenance furnished by a friend or relative will not be considered income for VA purposes). The record does show that, from June 1993 to July 2004, the Veteran's father had been in receipt of supplemental security income (SSI) from the Social Security Administration (SSA). As of May 2008, an appeal was pending before the SSA regarding the father's current entitlement to SSI benefits. An award of SSI benefits could have a significant impact on this claim. See 38 C.F.R. § 3.272 (not listing income from SSA benefits as a specific income exclusion). Rather than remand this claim to determine the status of the SSI application, the Board will presume that the Veteran's father is a dependent for apportionment purposes. The facts in this case demonstrate that the Veteran is incarcerated and earning $10 per month for his prison occupation. See Veteran's VA Form 21-0788 received in May 2008. He currently receives $120 in VA compensation benefits which he provides to his father. See Father's VA Form 21-0788, Box 5A, received in May 2008; Veteran's VA Form 21-4138 filing received in May 2008. The full amount of the Veteran's withheld VA compensation benefits, in the amount of $120, has been apportioned to his minor child S.R.G. who is approximately 11 years of age. Neither this child nor the other two children of the Veteran reside with the Veteran's father. See Veteran's VA Form 21-686c received in June 2008. The custodian of child S.R.G. has a gross monthly income of $1,037 with monthly expenses for herself and S.R.G. consisting of $500 for rent, $100 for food, $140 for utilities, $140 for telephone, $45 for clothing, and $25 for school expenses. This minor child is not eligible to earn employment income. Overall, the Board finds that the $120 apportioned amount of VA compensation on behalf of S.R.G. falls well short of the needs and living expenses of S.R.G. See 38 C.F.R. § 3.450(a)(1)(ii) (providing that amounts payable to the veteran may be apportioned "if the veteran's children are not residing with the veteran and the veteran is not reasonably discharging his or her responsibility for the ... children's support.") Notably, the Veteran had been paying $200 monthly for a dependent child more than a decade ago. See VA Form 21-526 received in July 2000, Box 31G. On the other hand, despite having no monthly income as defined by VA, the needs of the Veteran's father have been met. According to his most recent VA Form 21-0788, the father has living arrangements with a friend who provides food, shelter and utilities. Additionally, the father's daughter contributes an additional $400 to the household expenses, and the Veteran himself sends the Veteran's father $120 per month. The Veteran's father has not reported any unusual expenses or special needs. The Board has also considered the factor of the father's potential income sources. The Veteran's father was previously entitled to SSI benefits, reflecting a determination that he is eligible for the benefit depending on his actual disability status. A pending SSA decision would presumably award him benefits based upon actual disability, wherein he would no longer be deemed a conclusive dependent pursuant to 38 C.F.R. § 3.250(a)(1). See generally http://www.ssa.gov/oact/cola/SSIamts.html (the monthly amount of SSI payments is currently $674 for an eligible individual). If the benefit is denied, then presumably the Veteran's father would be found to be physically and mentally capable of employment. The Board further notes that the Veteran's father has asserted a need for apportioned benefits to help take care of the needs of the Veteran's children. The Board finds that this purpose will be better suited by directly apportioning the benefits to the actual custodians of the children. Again, the Board notes that the Veteran is currently contributing the non-withheld portion of his VA benefits to his father. In totality, the Board finds that the available $120 per month in VA compensation benefits being withheld from the Veteran have been apportioned to his minor daughter; these benefits do not reasonably discharge, in any way, shape or form, the obligation to the child. Additionally, an apportionment of any or all of the Veteran's withheld VA compensation benefits to the Veteran's father, whose current living needs are met, would clearly cause undue hardship to the child. Accordingly, the preponderance of the evidence is against the application by the Veteran's father for an apportionment of the Veteran's VA compensation benefits. The appeal is denied. ORDER The appeal is denied. ____________________________________________ JOHN J. CROWLEY Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs