Citation Nr: 1104153 Decision Date: 02/01/11 Archive Date: 02/14/11 DOCKET NO. 05-32 107 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Houston, Texas THE ISSUE Entitlement to an apportionment of the Veteran's Department of Veterans Affairs (VA) benefits to the Veteran's three children. REPRESENTATION Appellant represented by: Disabled American Veterans ATTORNEY FOR THE BOARD G. Jivens-McRae, Counsel INTRODUCTION The Veteran served on active duty from July 1973 to July 1975. The appellant is the mother if the Veteran's three children, and she filed an application on the children's behalf for apportionment for the Veteran's VA benefits. This appeal comes before the Board of Veterans' Appeals (Board) on appeal from a November 2004 decision of the St. Petersburg, Florida, VA Regional Office (RO), which denied an apportionment of the Veteran's VA benefits to his children. This claim was subsequently transferred to the Houston, Texas RO. In June 2008, the Board remanded the claim for the appellant to be scheduled for a Board hearing. That hearing request was later cancelled by the appellant. The Board then remanded the claim in January 2009 for further development. This claim is now ready for appellate review. FINDINGS OF FACT 1. In October 2004, the custodial parent of the Veteran's three children filed a claim for apportionment of the Veteran's VA benefits on the children's behalf. 2. The Veteran was not residing with his three children but was reasonably discharging his responsibility for their support. 3. The appellant does not have a financial hardship for the purpose of determination of a special apportionment. CONCLUSIONS OF LAW 1. The requirements for a general apportioned share of the Veteran's VA benefits for his dependent children have not been met. 38 U.S.C.A. § 5307 (West 2002); 38 C.F.R. § 3.450 (2010). 2. The requirements for a special apportioned share of the Veteran's VA benefits for his dependent children have not been met. 38 U.S.C.A. § 5307; 38 C.F.R. § 3.451 (2010). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS Duties to notify and to assist As provided for by the Veterans Claims Assistance Act of 2000 (VCAA), VA has a duty to notify and assist claimants in substantiating a claim for VA benefits. However this case does not involve a claim for benefits under 38 U.S.C.A., chapter 51. This is a claim for apportionment which is under 38 U.S.C.A., chapter 53. Thus, the VCAA provisions are not applicable to this appeal. Barger v. Principi, 16 Vet. App. 132, 138 (2002). Nevertheless, the Veteran was given guidance from VA as to the evidence that was needed with respect to the apportionment of VA benefits to his children. Initially, he was notified in November 2004, that the appellant had filed a claim for apportionment of his benefits on behalf of their three children and that the claim had been denied. The appellant appealed the denial and in January 2009, the claim was remanded in part, because the simultaneously contested claims procedures had not been followed. Specifically, the record showed that the Veteran had not been furnished a copy of the statement of the case (SOC), nor was he informed of the substance of the appellant's substantive appeal as required by 38 C.F.R. § 19.101 and § 19.102. In June 2009, the Veteran was sent a copy of the July 2005 SOC and the appellant's August 2005 substantive appeal. That same month, he was asked to provide a completed copy of a Financial Status Report (VA Form 20-5665) to include his total family income, living expenses, installment obligations, and other debts. He was asked to specifically indicate whether he was in fact paying child support. That correspondence appears to have been returned to the RO for want of a better mailing address. The request for a completed Financial Status Report was resent to the Veteran in November 2009. It is unclear from the record as to whether the correspondence included copies of the July 2005 SOC or the appellant's August 2005 substantive appeal. In December 2009, a completed VA Form 20-5665 was received by VA from the Veteran. He also submitted a VA Form 21-4138 in Support of the Veteran's Claim. A supplemental SOC was mailed to the Veteran and the appellant in April 2010. As noted, the Board is concerned about that the RO failed to meet the requirement's 38 C.F.R. § 19.101 by not providing him a copy of the July 2005 SOC and the appellant's August 2005 substantive appeal. Indeed, the Board voiced this concern in its January 2009 Remand. A remand by the Board confers on the claimant, as a matter of law, the right to compliance with the remand orders. Stegall v. West, 11 Vet. App. 268 (1998). Nevertheless, for the reasons explained more fully below, the Board is denying the appellant's claim for an apportionment. Such a decision is fully favorable to the Veteran. As such, this decision poses no risk of prejudice to the Veteran, and the Board may proceed with appellate review. See, e.g., Bernard v. Brown, 4 Vet. App. 384 (1993). Apportionment of the Veteran's Benefits If a Veteran's child is not in his custody, all or a part of that Veteran's benefits may be apportioned as prescribed by 38 U.S.C.A. § 5307. VA regulations provide for two types of apportionments: Under a "general" apportionment, all or any part of the compensation payable on account of a veteran may be apportioned if the veteran is not residing with his child and the veteran is not reasonably discharging his responsibility for the child'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 a general apportionment. Hall v. Brown, 5 Vet. App. 294 (1993). Under a "special apportionment," regardless of any other provision about apportionments, 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 other persons in interest. 38 C.F.R. § 3.451. As relevant here, for the determination for a special apportionment, consideration must be given to such factors as the amount of the VA benefits payable; the resources, income, and special needs of those dependents in whose behalf the apportionment is claimed; and the resources, income, and special needs of the veteran and his other dependents. 38 C.F.R. § 3.451. The amount of a special apportionment should generally be consistent with the total number of dependents allowed. 38 C.F.R. § 3.451. The record noted that in August 2002, the Veteran had requested that his pension benefits be reinstated. A January 2004 letter from VA indicated that his pension benefits were terminated, effective January 2002, for failure to return his Eligibility Verification Report. A review of the record showed that the Veteran had a service-connected disability. Those compensation benefits were reinstated, effective January 2002. He was informed that he was paid as a single veteran with no dependents because he was only rated as 10 percent disabled, and VA law requires that a veteran must be rated at least 30 percent service-connected before VA can give them credit for their dependents. In October 2004, the appellant requested an apportionment of the Veteran's VA benefits on behalf of his three minor children. At the time of the application, the appellant did not indicate any reasoning or financial difficulties warranting an apportionment of the Veteran's benefits. In connection with the claim, the appellant submitted a Financial Status Report. That report indicated that the appellant had a gross monthly salary of $1360. She received Social Security benefits on behalf of her children in the amount of $360. She also received $152 in child support payments. She also reported monthly expenses in the amount of $1913. She had a negative net income of -$263.60 after expenses. However, she had liquid assets (including savings and checking) of $565. She had other assets (1997 Buick) valued at $4,000. A November 2004 Special Apportionment Decision indicated that the Veteran was in receipt of compensation at the 10 percent rate of $106 per month and was not receiving any additional compensation for dependents. It was also noted on the appellant's Financial Status Report that the Veteran was paying child support of $152 per month in child support. The decision indicated that a reasonable amount could not be apportioned of the Veteran's VA compensation check to his three children and that he was already providing support to the children via child support. The request for apportionment was denied. The appellant appealed the denial of apportionment on behalf of the Veteran's three children in January 2005. She related that by law, a portion of all of the Veteran's income should go to the benefit of his children, not himself. In June 2005, in a Statement in Support of Claim, the appellant submitted a copy of a December 2002 Circuit Court Civil case which was the petition for divorce, and also indicated that the Veteran was required to pay $156.71 in child support on behalf of his three children with retroactive arrears payments , and a service charge which totaled $191.96. The Order also indicated that the Veteran should reimburse the appellant 45 percent of reasonable and necessary medical expenses incurred on behalf of the children that were not paid by insurance or other available benefits. The appellant also indicated in her statement in support of the claim that although the Veteran was ordered to pay child support, he was not complying with that order. Her August 2005 substantive appeal indicated that the Veteran lived in Columbia in South America, and that he lived in a marital home and had expenses of no more than $200 per month. She also related that her cost of living in the United States were much higher than those of the Veteran, and that she received no additional financial support. In August 2005, the Veteran submitted a letter to VA. He related that he was receiving dental treatment which resulted in a systemic infection. As a result of the infection, he had been diagnosed with systemic hypertension for which he also received treatment. He related that he received no city or state benefits and must settle all incurred expenses himself. Further, he stated that he lived alone and required permanent assistance from his physician who personally cared for him by shopping and reminding him to take his medications. In September 2005, the Veteran submitted an Income-Net Worth and Employment Statement (VA Form 21-527). The statement indicated that the Veteran contributed $191.96 in child support payments and each daughter received $87 in Social Security payments, totaling 452.96. He also attached benefits statement which showed that as of 2005, he received $548 in Social Security benefits. In February 2006, the Veteran was sent a letter amending his disability pension which indicated that in October 2005, he was in receipt of $850 monthly benefits and as of December 2005, he was in receipt of $877 monthly benefits. In October 2007, the appellant submitted an Information Regarding Apportionment of Beneficiary's Award (VA Form 21-0788). She indicated that the Veteran contributed $192 monthly on behalf of his children and they also received $360 a month in Social Security benefits. She also had gross salary from employment of $1600 per month. Her living expenses totaled $1881, which included house payment, food, utilities, telephone, medical expenses, car payment, insurance, gasoline, and cable. In October 2007, the appellant submitted a statement in support of her claim. She stated that she and the Veteran had three children who resided with her and that there was no one else besides herself and the children residing in her household. She indicated that the average monthly income for her household was $1904. She related that she had no assets, and her debts included a house with a mortgage of $76,000, a car of $3,500, and $2,000 in credit card debt. She related that the Veteran contributed $192 per month for their children. Their monthly living expenses were itemized as $707 house note, $139 electric, $70 water, $142 car note, $125 health insurance, $100 car insurance, $50 telephone bill, $120 gasoline, and $400 for food. She stated that the Veteran was in receipt of more than $1600 per month in VA and Social Security benefits and she believed that he should contribute at least 50 percent of his total income to the care of his children. She stated that his expenses in Columbia were substantially less than her expenses in the United States. She also stated that he should support them to this extent because he had never been present for their birthdays or Christmas or for school-related expenses. A November 2006 letter from VA to the Veteran indicated that as of December 2006, his pension payments would be $906. In December 2007, the Veteran submitted a statement regarding his financial situation. He indicated that his children were in receipt of child support of $191.96 plus $87 per child in Social Security benefits, totaling $452.96 per month. He also stated that he received only Social Security benefits in 2004 ($548) and 2005 ($550). In 2006, he received VA pension ($906) and social security benefits ($578) for a total of $1484. In 2007, he received VA pension ($906) and social security benefits ($606) for a total of $1510. He reported no stocks, bonds, or mutual funds. He also related that he had no real estate. His average monthly expenses included house rent of $454, food $350, utilities (water, gas, electricity) $65.66, health insurance $126.27, clothing $0, transportation $135, speech and physical therapist (uninsured) $220, and other expenses (dog food and dog medical expenses) $60. His total average expenses were $1491.48. In December 2009, the Veteran submitted an updated Financial Status Report as requested by VA in June 2009. He related monthly income of $467 in social security benefits and $390 in VA benefits. He had expenses of $500 rent, $250 food, utilities and heat $250, and other living expenses of $80. His total monthly expenses were $1080. He stated he had $50 cash on hand and $100 in the bank. He also related unpaid medical expenses of $25,000. He also reported in connection with the Financial Status Report that he continued to pay child support payments on behalf of his children. He also stated that he barely had money to pay his own expenses as the devaluation of the dollar in Columbia made his benefits of less value than before. He also related that his oldest daughter, who was now age 18, was working but he continued to pay the same in child support payments. No updated Financial Status Report as requested by VA in June 2009, was received from the appellant. Pursuant to the Board's January 2009 remand, an audit of the Veteran's VA benefits, including the amount paid and the amount withheld was performed in July 2010. The audit showed that the Veteran had withholdings of a portion of his VA pension benefits from December 2007 to March 2010. A September 2010 letter from VA to the Veteran indicated that VA records showed that a retroactive payment was made to his account of withheld payments. A review of the record reveals that the Veteran has presented evidence throughout this case that he has been ordered by the Court to pay child support. There has been conflicting reports from the appellant and the Veteran throughout the case as to whether those child support payments were made. Initially, the appellant stated in October 2004, that the Veteran paid $152 per month in child support payments. In June 2005, she submitted a Circuit Court Civil Order indicating that he was required to pay $156.71 per month in child support payments, with retroactive arrears payments, and a service charge which totaled $191.96. The Order also indicated that the Veteran should reimburse the appellant 45 percent of reasonable and necessary medical expenses incurred on behalf of the children that were not paid by insurance or other available benefits. In her August 2005 substantive appeal, she stated that the Veteran paid no child support. However, in October 2007, she related that the Veteran paid $192 toward their children's support. The appellant has, at best, been inconsistent in her reports, which causes the undersigned to question her veracity. The Veteran has, on the other hand, consistently indicated that he has paid child support payments. Since September 2005, when he first filed an Income-Net Worth and Employment Statement with VA, he has indicated that he pays $191.96 or $192 per month in child support. He appears to have made these child support payments when he was in receipt of only VA compensation payments of 10 percent and after he began to receive VA pension benefits, effective October 2005. There is no indication in the record that he has been presented with additional medical expenses to be paid on behalf of the children that were not paid by insurance. In any event, although there were at least two occasions that the appellant stated that she did not receive child support from the Veteran, for the most part, the record shows that the Veteran has been discharging his court ordered responsibility to support his children. Since the Veteran's children do not live with him and he is found to reasonably be discharging his responsibility for his children's support, the appellant is not entitled to an apportionment of the Veteran's VA benefits on behalf of his three children under 38 C.F.R. § 3.450. Therefore, a general apportionment is not warranted. The second type of apportionment is provided by 38 C.F.R. § 3.451. Under that regulation, where hardship is shown to exist, a veteran's compensation may be specially apportioned between such veteran and his dependents on the basis of the facts in the individual case as long as such apportionment would not cause undue hardship to other persons in interest, including the veteran. 38 C.F.R. § 3.45. . In determining the basis for special apportionment, consideration will be given to such factors as the amount of VA benefits payable, other resources and income of the Veteran and the dependents on whose behalf apportionment is claimed; and special needs of the Veteran, his dependents, and the apportionment claimants. The amount of apportionment should generally be consistent with the total number of dependents involved. Ordinarily, apportionment of more than 50 percent of the Veteran's benefits would constitute undue hardship on him or her, while apportionment of less than 20 percent of the Veteran's benefits would not provide a reasonable amount for any apportionee. 38 C.F.R. § 3.451. In this case, the Board finds that hardship has not been shown on the appellant's part at any time throughout the appeals period. At the outset, it is important to note, the Veteran made his child support payments, even when his only income was social security benefits and a 10 percent ($106) VA compensation payment. At that time, in 2004, the appellant showed expenses which included modeling classes for her children of $200 per month. Although she indicated that she needed to purchase a new roof, she had virtually no debt and some money in her checking and savings accounts. Compared to the Veteran, there was no hardship shown on the part of the appellant and to have apportioned the Veteran's benefits would have caused undue hardship on his part. In October 2005 to the present, the Veteran has been in receipt of VA pension payments, which have been substantially more than his previous compensation payments. However, he has shown rent payments of $454 to $500, and expenses that have included medical payments of $25,000, not covered by insurance. In June 2009, VA requested updated Financial Status Reports to support their claims. The Veteran submitted a Financial Status Report in December 2009. The appellant did not submit any additional information. In summary, based on the financial information provided by the appellant, the Board is unable to conclude that a hardship exists for the appellant. In reaching this decision, the Board notes that it has specifically considered the appellant's circumstances, but finds that hardship has not been adequately shown at any point during the pendency of this appeal, due in part to her failure to provide VA with complete and accurate income and expense information. In this regard, the appellant has not provided requested updated information and there are questions raised about the amount of household income that is available to the appellant. The Veteran has indicated in a December 2009 statement that his oldest daughter was now working. Since the appellant has not submitted updated financial information, there is no evidence of record to refute such a statement. If true, it is not clear what additional amounts of income are now contributed to the household. The Veteran, on the other hand, does have additional income since he has been in receipt of his pension benefits. However, an audit shows that there has been substantial withholding of benefits from 2007 to the present. These benefits were not available to the Veteran and additionally, his updated financial status shows that he has considerable medical debt, and at the time of the updated financial statement, extremely limited benefits available to him. The evidence at that time, clearly showed that it would be a hardship to the Veteran to have any of his VA benefits apportioned on behalf of his children. Thus, after carefully considering the evidence of record, the Board finds that the appellant has provided insufficient evidence to demonstrate that a hardship exists on her behalf. Moreover, even assuming for the sake of argument that a hardship did exist, the Board finds that an apportionment would not be warranted. The Board has carefully considered the amount of the Veteran's VA benefits and his other income, consisting only of Social Security benefits, and that he received a retroactive payment from VA in September 2010 in the amount of $13,418. The Board has also considered the Veteran's expenses which include his extensive medical expenses not covered by insurance. As to his medical expenses, emphasis is placed on the fact that the Veteran reports outstanding medical expenses of $25,000, which essentially consume the retroactive payment previously noted and still result in a substantial medical debt. Further, the Veteran is not shown to have additional resources to provide to the appellant on behalf of his three children without resulting in financial hardship to himself. He is clearly limited in his ability to earn additional income on behalf of his family, as he is unable to work as is shown by his receipt of VA pension benefits and Social Security disability. On the other hand, the Board has considered the appellant's request, but finds no special needs have been presented with regard to the Veteran's three children. After weighing all of these factors, the Board finds that an apportionment is not warranted. Although apportionment of less than 20 percent of the Veteran's benefits would ordinarily not provide a reasonable amount for any apportionee, given that the Veteran has outstanding medical expenses and limited financial resources, awarding an apportionment to the appellant on behalf of the Veteran's three children would cause an undue hardship to the Veteran, particularly when weighed against the incomplete financial information provided by the appellant in support of her claim. ORDER Entitlement to an apportionment of the Veteran's VA benefits on behalf of his minor children with the appellant is denied. ____________________________________________ MICHAEL A. HERMAN Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs