Citation Nr: 1136088 Decision Date: 09/26/11 Archive Date: 10/03/11 DOCKET NO. 11-01 785 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Newark, New Jersey THE ISSUES 1. Propriety of reduction of the Appellant's disability compensation benefits due to incarceration. 2. Entitlement to waiver of recovery of an overpayment in the amount of $1,095, to include whether the debt was properly created. ATTORNEY FOR THE BOARD T. Hal Smith, Counsel INTRODUCTION The Veteran served on active duty from October 1954 to September 1956. This matter is before the Board of Veterans' Appeals (Board) on appeal of a January 2010 rating decision of the Department of Veteran's Affairs (VA) Regional Office (RO) in Newark, New Jersey, which reduced the Claimant's service-connected disability compensation benefits, effective August 1, 2008. The issue of waiver of recovery of an overpayment, to include whether the debt was properly created will be REMANDED to the RO via the Appeals Management Center (AMC) in Washington, D.C. The Veteran will be notified of any action needed. Please note this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2010). 38 U.S.C.A. § 7107(a)(2) (West 2002 & Supp. 2009). FINDINGS OF FACT 1. In January 2010, the Appellant was notified of the proposed reduction of compensation benefits due to incarceration, any dependent's rights to apportionment, and the possible resumption of benefits upon his release from incarceration, and he was informed that the payment reduction would be effective on August 1, 2008. This was 61 days after incarceration for a felony. 2. On May 27, 2008, the Appellant was incarcerated in the New Jersey prison system for conviction of a felony and the term of his incarceration exceeded 60 days. 3. The Appellant's 61st day of incarceration was August 1, 2008, on which date his 10 percent disability compensation payments were reduced to one-half the rate of compensation payable under 38 U.S.C.A. § 1114(a). 4. No claim for apportionment of the Appellant's disability benefits has been received. CONCLUSION OF LAW The reduction of the Appellant's disability compensation benefits to the benefits equivalent to one half of a 10 percent evaluation, effective from August 1, 2008, due to incarceration for a felony conviction, was proper. 38 U.S.C.A. §§ 5107, 5313 (West 2002 & Supp. 2009); 38 C.F.R. §§ 3.103, 3.105, 3.665 (2010). REASONS AND BASES FOR FINDINGS AND CONCLUSION Veterans Claims Assistance Act The Veterans Claims Assistance Act of 2000 (VCAA) and implementing regulations imposes obligations on VA to provide claimants with notice and assistance. 38 U.S.C.A. §§ 5102, 5103, 5103A, 5107, 5126 (West 2002 & Supp. 2009); 38 C.F.R §§ 3.102, 3.156(a), 3.159, 3.326(a) (2010). In the instant appeal there is no dispute as to the relevant facts and the law is controlling. Because the law, and not the evidence, is dispositive of this claim, the VCAA is not applicable. Mason v. Principi, 16 Vet. App. 129 (2002). Furthermore, the issue here does not arise from the receipt of a "substantially complete application" from the appellant under 38 U.S.C.A. § 5103(a), but rather, arises by action of law under 38 U.S.C.A. § 5313, which requires a reduction of benefits for certain incarcerated veterans. Thus, the VCAA is not applicable to this appeal, and further discussion of compliance with the VCAA is not required. Propriety of Reduction - Laws and Regulations Under VA laws and regulations, a person who is incarcerated in a Federal, State or Local penal institution in excess of 60 days for conviction of a felony will not be paid compensation in excess of that amount specified in 38 C.F.R. § 3.665 beginning on the 61st day of incarceration. 38 U.S.C.A. § 5313(a)(1) (West 2002 & Supp. 2009); 38 C.F.R. § 3.665(a) (2010). In the case of a Veteran with a service-connected disability rated at 20 percent or more, the veteran shall not be paid an amount that exceeds the rate under 38 U.S.C.A. § 1114(a), which is at the rate of 10 percent. 38 C.F.R. § 3.665(d). If a disability evaluation is less than 20 percent, the veteran shall receive one-half the rate of compensation payable under 38 U.S.C.A. § 1114(a). Id. VA must notify the Veteran that his benefits are subject to reduction due to his incarceration, of the rights of dependents to an apportionment while the person is incarcerated, and conditions under which payments to the person may be resumed upon release from incarceration. 38 C.F.R. § 3.665(a) (2010). In addition, no award of compensation shall be reduced or otherwise adversely affected unless the beneficiary has been notified of such adverse action and has been provided a period of 60 days in which to submit evidence for the purpose of showing that the adverse action should not be taken. 38 C.F.R. §§ 3.103(b)(2), 3.105(h) (2010). Background and Analysis In a letter received from the Veteran on May 21, 2009, VA was informed of a change of address to his current location. VA subsequently confirmed that the address was a prison facility. In correspondence dated on May 29, 2009, the New Jersey Department of Corrections indicated that the Claimant was an inmate, and that he was sentenced for a felony for a mandatory minimum of 8 years, 5 months, and 29 days. He had been admitted to the facility on May 27, 2008. The Board is aware of the Appellant's argument that he voluntarily submitted notice of his change of address to the prison. This fact, however, is not at issue and has no effect on the propriety of reduction of benefits. 38 U.S.C.A. § 5313(a)(1) (West 2002 & Supp. 2009); 38 C.F.R. § 3.665(a) (2010). A January 2010 VA letter clearly notified the Appellant of the proposed reduction of compensation benefits due to incarceration, any dependent's rights to apportionment, and the possible resumption of benefits upon his release from incarceration. Effective August 1, 2008, the Appellant's benefits were reduced to an amount equivalent to one half of a 10 percent evaluation as this was the 61st day of incarceration. The reduction of benefits remains in effect until the Appellant's release, at which time his full rate will be restored. The Appellant does not contend and the evidence shows that the conviction has been overturned. Accordingly, the requirements for the reduction of the appellant's disability compensation benefits due to incarceration have been met. 38 C.F.R. § 3.665 (2010). Because the law, rather than the facts in this case, is dispositive, the benefit-of-the-doubt doctrine is not for application. 38 U.S.C.A. § 5107(b) (West 2002 & Supp. 2009). ORDER The reduction of the Appellant's disability compensation benefits due to incarceration was proper and the appeal is denied. REMAND The action in reducing the Veteran's benefits to one-half of 10 percent, retroactive to August 1, 2008, from the 2010 action. The Committee on Waivers and Compromises has denied a waiver of recovery or the debt. The appellant in a letter of July 2010 essentially disagrees with both the reduction and the denial of the waiver. He appears to argue that he had no knowledge of the need to report his incarceration, and that the taking of his funds is unjust. This matter has not been the subject of a statement of the case. The United States Court of Appeals for Veterans Claims (Court), has essentially held that the appeal process starts with the submission of a notice of disagreement. See Manlincon v. West, 12 Vet. App. 238 (1999). As such, a statement of the case should be issued. In view of the foregoing, this issue is REMANDED for the following action: Issue the appellant a statement of the case on the issue of waiver of recovery of the overpayment, to include validity of the debt. If additional adjudication on the validity of the debt is needed that should be undertaken. Appellant should be notified that to complete the appeal, he should timely file a substantive appeal, and that failure to do so will result in the closing of the appeal. 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 of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112 (West Supp. 2010). ____________________________________________ MICHAEL D. LYON Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs