Citation Nr: 1127729 Decision Date: 07/25/11 Archive Date: 08/02/11 DOCKET NO. 08-03 394A ) DATE ) ) Received from the Department of Veterans Affairs Regional Office in No. Little Rock, Arkansas THE ISSUE Whether an overpayment of VA compensation benefits in the amount of $2,082.50 was properly created. REPRESENTATION Appellant represented by: Disabled American Veterans ATTORNEY FOR THE BOARD A. Cryan, Counsel INTRODUCTION The Veteran served on active duty from May 1976 to May 1979 and from January 1981 to May 1987. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a May 2007 decision by the Department of Veterans Affairs (VA) Debt Management Center in St. Paul, Minnesota. The Veteran requested that he be afforded a hearing before the Board when he submitted his substantive appeal in February 2008. A hearing before the Board was held in April 2009. However, the Veteran indicated that he did not desire to give any testimony because the RO was still working on his claim. Therefore, the Board finds that the Veteran's request for hearing on that issue was satisfied as he elected to not provide testimony. The Board notes that the issues of entitlement to an increased rating for a right wrist disability and the contested claim issue of entitlement to an apportionment of the Veteran's benefits will be addressed in separate decisions. The appeal is REMANDED to the RO via the Appeals Management Center in Washington, D.C. REMAND A review of the claims file reveals that a remand is necessary before a decision on the merits of the claim can be promulgated. The Board notes that the Veteran's representative submitted a notice of disagreement in May 2007 and indicated that the Veteran disagreed with VA's decision regarding an overpayment. Neither the Veteran's representative nor the Veteran himself specifically indicated whether the Veteran disagreed with the validity of the debt or whether he sought a waiver of the overpayment. The RO accepted the notice of disagreement as disagreement with the validity of the debt and issued a statement of the case listing that issue. The Veteran was advised that he should notify the RO if he sought a waiver of the debt. The Veteran submitted a substantive appeal and indicated that he was appealing the issue listed on the statement of the case. Consequently, the Board finds that the issue on appeal is the validity of the overpayment. Pursuant to applicable law and regulation, a Veteran who is incarcerated in a Federal, State, or local penal institution in excess of 60 days for conviction of a felony is not to be paid compensation or dependency and indemnity compensation in excess of 10 percent [the rate of compensation payable under 38 U.S.C.A. § 1114(a)] beginning on the 61st day of incarceration. A felony is any offense punishable by death or imprisonment for a term exceeding one year, unless specifically categorized as a misdemeanor under the law of the prosecuting jurisdiction. However, where a conviction is overturned on appeal, any compensation or dependency and indemnity compensation withheld as a result of incarceration for such conviction shall be restored to the beneficiary. 38 U.S.C.A. § 5313 (West 2002); 38 C.F.R. § 3.665 (2010). All or part of the compensation not paid to an incarcerated Veteran may be apportioned to the Veteran's spouse, child, children, and dependent parents on the basis of individual need. In determining individual need consideration shall be 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 and any special needs, in any, of all apportionee claimants. 38 C.F.R. § 3.665(e) (2010). In this case, the Veteran submitted various correspondence to the RO and indicated that he was incarcerated and he also requested his benefits be apportioned to his daughter who was in the custody of her grandparents. The RO issued a letter to the Veteran in February 2007 and advised him that the law, specifically 38 C.F.R. § 3.665, required that the payment of VA compensation benefits be reduced to the lesser of the two following amounts on the 61st day of incarceration following conviction of a felony: (a) the amount payable for disability rated as 10 percent disabling if the combined disability rating is 20 percent or more, or (b) the amount equal to one-half of the 10 percent rate if the combined rating is 10 percent. Under the circumstances, the Veteran was informed that the law required that his compensation benefits be reduced to $112 effective November 28, 2006. He was also advised that if he had dependents, they may be entitled to an apportioned share of the compensation benefits while the Veteran was incarcerated. Thereafter, in an April 2007 letter, the Veteran was advised that his disability benefits had been reduced and in a May 2007 letter, the Veteran was advised that he was overpaid $2,155.90. The Veteran submitted a notice of disagreement with the overpayment issue in May 2007 and the RO issued a statement of the case in December 2007 and indicated that the overpayment amount was reduced to $2,082.50 based on a miscalculation. The issue of entitlement to apportionment of the Veteran's benefits is the subject of a separate decision. However, the Veteran has indicated that he wanted his benefits apportioned to his daughter who is in the custody of her grandparents and that he does not dispute any apportionment of his benefits. The Board finds that this claim is inextricably intertwined with the pending appeal on the issue of entitlement to apportionment because the outcome of that claim could change the amount of the debt in question. The appropriate remedy where a pending claim is inextricably intertwined with a claim currently on appeal is to remand the claim on appeal pending the adjudication of the inextricably intertwined claim. Harris v. Derwinski, 1 Vet. App. 180 (1991). Accordingly, the case is REMANDED for the following action: 1. Recalculate the Veteran's debt, taking account of any apportionment paid, and issue a paid due audit. 2. Then, re-adjudicate the claim for the validity of the overpayment. If action remains adverse to the Veteran, issue a supplemental statement of the case and allow the appropriate time for response. Then, return the case to the Board. The appellant has the right to submit additional evidence and argument on the matter or matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999). This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board or the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. 38 U.S.C.A. §§ 5109B, 7112 (West Supp. 2010). _________________________________________________ Harvey P. Roberts Veterans Law Judge, Board of Veterans' Appeals Under 38 U.S.C.A. § 7252 (West 2002), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Appeals for Veterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (2010).