Citation Nr: 1316797 Decision Date: 05/22/13 Archive Date: 05/31/13 DOCKET NO. 09-21 585 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Waco, Texas THE ISSUE Entitlement to apportionment of compensation on behalf of the Veteran's dependent(s) for the period of incarceration from June [redacted], 2008 to November [redacted], 2008. REPRESENTATION Veteran represented by: Disabled American Veterans WITNESS AT HEARING ON APPEAL Veteran ATTORNEY FOR THE BOARD S. Finn, Counsel INTRODUCTION The Veteran served on active duty from May 1989 to January 1993. This case comes before the Board of Veterans' Appeals (Board) on appeal of an October 2008 administrative decision by the Department of Veterans Affairs (VA) Regional Office (RO) in Waco, Texas. In September 2011, the Veteran, sitting at the RO, testified at a Travel Board hearing before the undersigned Veterans Law Judge. A transcript of the hearing is associated with the claims In May 2012, the Board determined that the reduction of the Veteran's disability compensation payment to the 10 percent rate, effective June [redacted], 2008 to November [redacted], 2008, was proper, and denied the benefit sought on appeal. The Veteran appealed the Board's decision to the United States Court of Appeals for Veterans Claims (Court), which in a January 2013 Order granted the parties' Joint Motion, vacating the decision, in part, and remanding the matter for compliance with the terms of the Joint Motion for Partial Remand. The parties did not want to disturb the Board's determination regarding whether a reduction was appropriate in light of the incarceration, but sought to have the Board discuss the notice provisions under 38 C.F.R. § 3.655(a) regarding apportionment, specifically as they may apply to the Veteran's dependents. Therefore, the issue on the title page has been rephrased to better reflect the claim on appeal. A review of the Virtual VA paperless claims processing system does not reveal any additional documents pertinent to the present appeal. The appeal is REMANDED to the RO via the Appeals Management Center (AMC), in Washington, DC. VA will notify the Veteran if further action is required. REMAND In a January 2013 Joint Motion For Partial Remand, the Court vacated, in part, and remanded the May 2012 Board decision that determined that the reduction of Veteran's disability compensation payment to the 10 percent rate, effective June [redacted], 2008 to November [redacted], 2008 was proper. The parties did not want to disturb the Board's determination regarding whether a reduction was appropriate in light of the incarceration, but sought to have the Board discuss the notice provisions under 38 C.F.R. § 3.655(a) regarding apportionment, specifically as they may apply to the Veteran's dependents. 38 C.F.R. § 3.665 controls the compensation of incarcerated beneficiaries of VA benefits. It provides that any person incarcerated in a Federal, State, or local penal institution in excess of 60 days for conviction of a felony will not receive compensation in excess of specified amounts. See 38 C.F.R. § 3. 665(a). If a Veteran is rated 20 percent disabled or more, then the Veteran will receive compensation payable under 38 U.S.C.A. § 1114(a), or the equivalent of a 10 percent rating. See 38 C.F.R. § 3.665(d)(1). If the Veteran is rated at less than 20 percent, then the Veteran will receive one-half the rate of compensation payable under 38 U.S.C.A. § 1114(a). See 38 C.F.R. § 3.665(d)(2). All or part of the compensation not paid to an incarcerated Veteran may be apportioned to the Veteran's spouse, child or children, and dependent parents on the basis of individual need. 38 C.F.R. § 3.665(e). 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. When a Veteran is incarcerated for a period in excess of 60 days for conviction of a felony, his compensation must be reduced, "for the period beginning on the sixty-first day of such incarceration." 38 U.S.C.A. § 5313(a)(1); see also 38 C.F.R. § 3.665(a). VA is required to inform the person whose benefits are subject to this reduction "of the rights of the person's dependents to an apportionment while the person is incarcerated, and the conditions under which payments to the person may be resumed upon release from incarceration." 38 C.F.R. § 3.665(a). The term "release from incarceration" includes participation in a work release or halfway house program, parole, and completion of sentence. 38 C.F.R. § 3.665(b). The Veteran has not disputed that he was convicted of a felony in April 2008 and that the conviction caused him to be incarcerated until November [redacted], 2008. Effective, June [redacted], 2008 (the 61st day of incarceration), the Veteran's service-connection benefits were reduced to 10 percent, and these benefits were restored upon his release on November [redacted], 2008. Specifically, the Veteran was convicted in the state of Texas of theft under $1,500 (with a history of two prior theft convictions), and sentenced to three hundred (300) days in jail. (See Offender Information Detail). Under Texas Law, the crime constituted "a state jail felony," punishable "by confinement in a state jail for any term of not more than two years or less than 180 days." Tex. Penal Code Ann. § 12.35(a); see also Tex. Penal Code Ann. § 31.03(e)(4)(D) (defining "state jail felony" to include the theft of property valued at "less than $1,500 and the defendant has been previously convicted two or more times of any grade of theft"). At the time of his conviction, the Veteran was in receipt of VA benefits for schizophrenia rated at a 100 percent disabling. (See July 1994 Rating Decision). The RO notified the Veteran that his benefits would be reduced to a 10 percent rate for the duration of his incarceration. (See October 2008 Notice Letter). The record on appeal reflects acknowledgement of paternity, received by VA in 2007, in which the Veteran conceded that he was the biological father of a minor child and a copy of the Veteran's application for financial assistance through a Texas non-profit organization, in which he not only identified the same minor child, but listed the address as which she resided with her biological mother. The record does not reflect that the RO provided his dependent(s) with information and the appropriate forms with respect to claim for an apportionment for the Veteran's period of incarceration. The RO should provide all required notice with respect to this claim for an apportionment for which the Veteran's VA compensation was in fact reduced to the 10 percent level effective from June [redacted], 2008, 61 days after the period of his incarceration to November [redacted], 2008. See 38 U.S.C.A. § 5313(a) (1); 38 C.F.R. § 3. 665(a). Depending on the facts of this case, the dependent child may be entitled to an apportionment of some or all of the balance of the Veteran's compensation for this period. Id. Accordingly, the case is REMANDED for the following action: 1. The Veteran's dependent(s) should be provided notice as to what is required to substantiate a claim for an apportionment for a spouse and children during a period of the Veteran's incarceration, and the respective roles of VA, the dependent(s), and the Veteran, in providing and obtaining evidence relevant to the claim. 2. The Veteran should be provided notice as to the rights of his spouse and children to an apportionment of his compensation benefits during the period for which he was incarcerated and his VA compensation benefits payable to him were reduced to the 10 percent level from June [redacted], 2008, 61 days after commencement of the incarceration, to November [redacted], 2008. 3. The dependent(s) should be specifically advised that whether such an apportionment to a spouse and dependent(s) during a period of incarceration is warranted is made on the basis of individual need, and that 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 of the apportionee claimants. 4. The RO should send the dependent(s), with a cover letter, VA Financial Status Report forms, and the dependent(s) should be instructed to complete these forms in full and to return them to the RO. The dependent should be afforded a reasonable amount of time to return the completed forms, but should be advised that failure to complete and to return the forms in a timely fashion may result in an adverse determination. 5. After the RO completes this development, as well as any other development it deems appropriate, it should readjudicate the claim on the basis of all the evidence of record. Then the Veteran should be furnished with supplemental statements of the case if appropriate. Thereafter, the case is to be returned to the Board for further appellate review. The Veteran 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. 2012). _________________________________________________ KELLI A. KORDICH Acting 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) (2012).