Citation Nr: 1301203 Decision Date: 01/11/13 Archive Date: 01/16/13 DOCKET NO. 10-45 665 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Seattle, Washington THE ISSUE 1. Entitlement to an effective date prior to January 1, 2009, for the grant of a total disability evaluation based on individual unemployability (TDIU). 2. Entitlement to an effective date prior to January 1, 2009, for the establishment of basic eligibility for Dependents' Educational Assistance (DEA) under Title 38, United States Code, Chapter 35. REPRESENTATION Appellant represented by: Disabled American Veterans WITNESS AT HEARING ON APPEAL The Veteran ATTORNEY FOR THE BOARD B. R. Mullins, Associate Counsel INTRODUCTION The Veteran had active service from October 1980 to November 2002. This matter comes before the Board of Veterans' Appeals (Board) on appeal from rating decisions of the Department of Veterans Affairs (VA) Regional Office (RO) in Seattle, Washington, eventually assigning an effective date of January 1, 2009, for the establishment of TDIU benefits and Chapter 35 educational benefits. The Veteran testified at a hearing before the undersigned Veterans Law Judge at the RO in Seattle, Washington in July 2012. A written transcript of this hearing has been prepared and incorporated into the evidence of record. FINDINGS OF FACT 1. The Veteran's service-connected disabilities rendered him unable to obtain or maintain a substantially gainful occupation as of January 3, 2007. 2. The criteria for basic eligibility for DEA under Title 38, United States Code, Chapter 35, were met as of January 3, 2007. CONCLUSIONS OF LAW 1. The criteria for establishing entitlement to an effective date of January 3, 2007, for the establishment of TDIU benefits have been met. 38 U.S.C.A. § 5110 (West 2002 & Supp. 2012); 38 C.F.R. § 3.400 (2012). 2. The criteria for establishing entitlement to an effective date of January 3, 2007, for the establishment of basic eligibility for DEA under Title 38, United States Code, Chapter 35, is warranted. 38 U.S.C.A. § 5110 (West 2002 & Supp. 2012); 38 C.F.R. § 3.400 (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS Duty to Notify VA has a duty to notify and assist veterans in substantiating a claim for VA benefits. 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5107, 5126 (West 2002 & Supp. 2012); 38 C.F.R. §§ 3.102, 3.156(a), 3.159 and 3.326(a) (2012). Proper notice from VA must inform the Veteran of any information and medical or lay evidence not of record (1) that is necessary to substantiate the claim; (2) that VA will seek to provide; and (3) that the Veteran is expected to provide in accordance with 38 C.F.R. § 3.159(b)(1). This notice must be provided prior to an initial unfavorable decision on a claim by the RO. Mayfield v. Nicholson, 444 F.3d 1328 (Fed. Cir. 2006); Pelegrini v. Principi, 18 Vet. App. 112 (2004). Previously, the United States Court of Appeals for the Federal Circuit (Federal Circuit) held that the failure to provide pre-adjudicative notice of any of the necessary duty to notify elements was presumed to create prejudicial error. Sanders v. Nicholson, 487 F.3d 881 (2007). VA was required to show that that the error did not affect the essential fairness of the adjudication, and that to make such a showing the VA had to demonstrate that the defect was cured by actual knowledge on the claimant's part or that a benefit could not have been awarded as a matter of law. Id. However, the United States Supreme Court (Supreme Court) recently held this framework to be inconsistent with the statutory requirement that the CAVC take "due account of the rule of prejudicial error" under 38 U.S.C.A. § 7261(b)(2). Shinseki v. Sanders, 556 U.S. 396 (2009). In reversing the Federal Circuit's decision, the Supreme Court held that the burden is on the claimant to show that prejudice resulted from the error, rather than on VA to rebut a presumed prejudice. Id. In the present case, the Board is granting the claim of entitlement to an earlier effective date. However, in light of the Veteran's assertion that he is in fact entitled to an effective date as far back as August 2006, the Board finds this to only be a partial grant. A letter sent to the Veteran in March 2009 addressed all notice elements listed under 3.159(b)(1) and was sent prior to the initial RO decision in this matter. The letter informed him of what evidence was required to substantiate the claim and of his and VA's respective duties for obtaining evidence. Specifically, the Veteran was notified of how a proper effective date is determined. See Dingess/Hartman v. Nicholson, 19 Vet. App. 473 (2006). Under these circumstances, the Board finds that the notification requirements have been satisfied as to both timing and content. Adequate notice was provided to the Veteran prior to the transfer and certification of his case to the Board that complied with the requirements of 38 U.S.C. § 5103(a) and 38 C.F.R. § 3.159(b). Duty to Assist Next, VA has a duty to assist the Veteran in the development of the claim. This duty includes assisting him in the procurement of service medical records and pertinent treatment records and providing an examination when necessary. 38 U.S.C.A. § 5103A; 38 C.F.R. § 3.159. The Board finds that all necessary development has been accomplished, and therefore appellate review may proceed without prejudice to the appellant. See Bernard v. Brown, 4 Vet. App. 384 (1993). VA obtained the Veteran's service treatment records. Also, the Veteran received VA medical examinations in which his functional impairment was discussed and VA has obtained these records. Records discussing the Veteran's occupational history and earnings have also been incorporated into the claims file. Significantly, neither the Veteran nor his representative has identified any additional existing evidence that is necessary for fair adjudication of the claim that has not yet been obtained. Hence, no further notice or assistance to the Veteran is required to fulfill VA's duty to assist him in the development of the claim. Smith v. Gober, 14 Vet. App. 227 (2000), aff'd 281 F.3d 1384 (Fed. Cir. 2002); Dela Cruz v. Principi, 15 Vet. App. 143 (2001); see also Quartuccio v. Principi, 16 Vet. App. 183 (2002). Analysis The Veteran contends that he is entitled to an effective date prior to January 1, 2009, for the award of TDIU benefits. The Veteran has also argued that he is entitled to an earlier effective date for the award of DEA benefits under Chapter 35. As outlined below, the evidence of record supports the Veteran's assertions, and an effective date of January 3, 2007, for the grant of TDIU benefits and Chapter 35 benefits is warranted. The statutory guidelines for the determination of an effective date of an award of disability compensation are set forth in 38 U.S.C.A. § 5110. Except as otherwise provided, the effective date of an evaluation and award of compensation based on an original claim, a claim reopened after a final disallowance, or a claim for increase will be the date of receipt of the claim or the date entitlement arose, whichever is later. 38 C.F.R. § 3.400. A specific claim in the form prescribed by the Secretary of VA must be filed in order for benefits to be paid to any individual under the laws administered by the VA. 38 U.S.C.A. § 5101(a). A "claim" is defined broadly to include a formal or informal communication in writing requesting a determination of entitlement or evidencing a belief in entitlement to a benefit. 38 C.F.R. § 3.1(p); Brannon v. West, 12 Vet. App. 32, 34-5 (1998); Servello v. Derwinski, 3 Vet. App. 196, 199 (1992). Any communication indicating an intent to apply for a benefit under the laws administered by the VA may be considered an informal claim provided it identifies, but not necessarily with specificity, the benefit sought. See 38 C.F.R. § 3.155(a); Servello, 3 Vet. App. at 199 (holding that 38 C.F.R. § 3.155(a) does not contain the word "specifically," and that making such precision a prerequisite to acceptance of a communication as an informal claim would contravene the Court's precedents and public policies underlying the statutory scheme). To determine when a claim was received, the Board must review all communications in the claims file that may be construed as an application or claim. See Quarles v. Derwinski, 3 Vet. App. 129, 134 (1992). Upon receipt of an informal claim, if a formal claim has not been filed, an application form will be forwarded to the claimant for execution. If received within one year from the date it was sent to the claimant, it will be considered filed as of the date of receipt of the informal claim. An application is defined as a formal or informal communication in writing requesting a determination of entitlement or evidencing a belief in entitlement to a benefit. 38 C.F.R. § 3.1(p); see also Rodriguez v. West, 189 F.3d. 1351 (Fed. Cir. 1999), (an expressed intent to claim benefits must be in writing in order to constitute an informal claim; an oral inquiry does not suffice). 38 C.F.R. § 3.155(c) provides that when a claim has been filed which meets the requirements of 38 C.F.R. § 3.151 or 38 C.F.R. § 3.152, an informal request for increase or reopening will be accepted as a claim. The record reflects that the Veteran filed a claim for an increased evaluation for his lumbar spine disability in August 2005. In a December 2005 rating decision, the previously assigned evaluation of 20 percent was continued. A timely notice of disagreement was received in October 2006, and in a June 2007 rating decision, a temporary disability evaluation of 100 percent was assigned, effective as of June 2, 2006. The Veteran's disability evaluation returned to 20 percent as of August 1, 2006. The Veteran continued to express his disagreement with this decision, appealing the assigned evaluation to the Board in July 2007. The Veteran informed VA in August 2007 that his service-connected disabilities had impacted his earning capacity. In a January 2009 rating decision, the Veteran's disability evaluation was increased to 40 percent, effective as of August 1, 2006. The Veteran was subsequently granted TDIU benefits and DEA benefits under Chapter 35, effective as of January 1, 2009. In Roberson v. Principi, 251 F.3d 1378, 1384 (2001), the U.S. Court of Appeals for the Federal Circuit (Federal Circuit Court) held that once a claimant: (1) submits evidence of medical disability, (2) makes a claim for the highest possible rating for the disability, and (3) submits evidence of unemployability due to the disability, an informal claim is raised under 38 C.F.R. § 3.155(a) for a total disability rating based on individual unemployability (TDIU). And as the U. S. Court of Appeals for Veterans Claims (Court/CAVC) more recently explained in Rice v. Shinseki, 22 Vet. App. 447 (2009), a claim for TDIU is part of an increased rating claim when such claim is raised by the record. In the present case, the Veteran has been appealing the assigned rating since December 2005 and he has argued that his service-connected disabilities impact his employability. As such, an informal claim for TDIU benefits has been raised. Where the schedular rating is less than total, a total disability rating for compensation purposes may be assigned when the disabled person is unable to secure or follow a substantially gainful occupation as a result of service-connected disabilities, provided that, if there is only one such disability, this disability shall be ratable at 60 percent or more, or if there are two or more disabilities, there shall be at least one ratable at 40 percent or more, and sufficient additional disability to bring the combined rating to 70 percent or more. 38 C.F.R. §§ 3.340, 3.341, 4.16(a). As of January 3, 2007, the Veteran was service-connected for a lumbar spine disability (rated as 40 percent disabling), tendonitis of the right shoulder (rated as 10 percent disabling), tendonitis of the left ankle (rated as 10 percent disabling), arthritis of the left shoulder (rated as 10 percent disabling), depression (rated as 10 percent disabling), tinnitus (rated as 10 percent disabling), and a scar of the right thigh (rated as 0 percent disabling), for a combined disability evaluation of 70 percent. As such, the Veteran met the percentage requirements laid out in 38 C.F.R. § 3.340 as of January 3, 2007. Furthermore, the evidence of record demonstrates that the Veteran's service-connected disabilities resulted in an inability to obtain or maintain substantially gainful employment as of January 3. 2007. The Veteran testified that he was unable to work in 2007. Also, his 2008 tax returns reveal that he made $8,523.87 dollars that year working for a shuttle van service. The Veteran worked 28 hours per week and he would work 7 days and then take the following 7 days off. The Veteran subsequently quit working as a van driver on October 2, 2008, as a result of his service-connected disabilities. Therefore, TDIU benefits are warranted as of January 3, 2007, as the evidence of record suggests that the Veteran's service-connected disabilities have prevented all but marginal employment since January 3, 2007. The Board recognizes that the Veteran earned additional investment income of $491.00 per month in 2008 from an investment company (Amerivest, LLC) until this company went out of business in December 2008. If this money were added to the Veteran's annual revenue, he would seemingly meet the definition of gainful employment in that he exceeded the poverty line. However, the fact that the Veteran had preexisting investments in no way demonstrates an ability to maintain a substantially gainful occupation. The issue is whether the Veteran's service-connected disabilities, prior to January 1, 2009, rendered him unable to obtain or maintain substantially gainful employment. Marginal employment, for example, as a self-employed worker or at odd jobs or while employed at less than half of the usual remuneration, shall not be considered "substantially gainful employment." 38 C.F.R. § 4.16(a). See also Moore (Robert) v. Derwinski, 1 Vet. App. 356, 358 (1991). The record reflects that the Veteran worked inconsistent and odd hours and that he was forced to quit working due to his service-connected disabilities. Finally, when considering the Veteran's wages (and not his investment income), he earned $8,524.00 in 2008 working for a shuttle bus company. The poverty threshold for a single wage earner in 2008 was $10,400. See http://aspe.hhs.gov/poverty/08poverty.shtml. As such, the Veteran's employment of 2007 and 2008 is more appropriately characterized as "marginal" rather than as "substantially gainful." Since the appropriate effective date for an award of TDIU benefits is January 3, 2007, the Board finds that an effective date of January 3, 2007, is also warranted for the establishment of DEA benefits under Chapter 35. Basic eligibility for Chapter 35 benefits for the child or surviving spouse of a veteran is established in one of several ways, including being the child of a veteran who has a permanent total service-connected disability. 38 U.S.C.A. § 3501(a)(1)(A); 38 C.F.R. §§ 3.807, 21.302. Eligibility for Chapter 35 benefits further requires that the appellant must not reach her 26th birthday on or before the effective date of a finding of permanent and total service-connected disability. 38 C.F.R. § 21.3040(c). In the present case, the appellant's 26th birthday occurred on May 2, 2008. As the effective date for TDIU benefits is now January 3, 2007, DEA benefits under Chapter 35 for a child of the Veteran are warranted as of this date as well. However, the preponderance of the evidence of record demonstrates that an effective date prior to January 3, 2007, is not warranted. The record reflects that the Veteran did not meet the schedular requirements for an award of TDIU under 38 C.F.R. § 3.340 prior to January 3, 2007. Entitlement to the benefit on an extraschedular basis may be considered by the Director of the Compensation and Pension Service, when a Veteran is unable to secure and follow a substantially gainful occupation by reason of service-connected disabilities, even though percentage requirements are not met, with consideration given to the Veteran's background including his employment and educational history. 38 C.F.R. §§ 3.321(b), 4.16(b). In determining whether the Veteran is entitled to a TDIU rating, neither nonservice-connected disabilities or advancing age may be considered. 38 C.F.R. § 4.19. However, in the present case, the Veteran testified to being employed until December 2006. According to an employment verification form submitted by the Veteran, he worked full-time until December 31, 2006, making $108,028.00 that year. As such, the evidence of record fails to demonstrate that the Veteran's service-connected disabilities were beyond the level contemplated in the assigned disability ratings, such that extraschedular consideration would be warranted, prior to January 3, 2007. See Van Hoose v. Brown, 4 Vet. App. 361, 363 (1993) (noting that the disability rating itself is a recognition that industrial capabilities are impaired). Likewise, DEA benefits under Chapter 35 would not be warranted prior to January 3, 2007, as a total disability evaluation was not in effect. (CONTINUED ON NEXT PAGE) ORDER An effective date of January 3, 2007, for the establishment of TDIU benefits is granted. An effective date of January 3, 2007, for the establishment of basic eligibility for Dependent's Educational Assistance under Title 38, United States Code, Chapter 35, is granted. ____________________________________________ WAYNE M. BRAEUER Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs