Citation Nr: 1322396 Decision Date: 07/12/13 Archive Date: 07/18/13 DOCKET NO. 06-03 626 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Los Angeles, California THE ISSUE Whether the Veteran's spouse, the appellant, should be added to his compensation award earlier than July 1, 2002, for accrued benefits purposes based on substitution of the appellant. REPRESENTATION Appellant represented by: Michael N. Berke, Attorney ATTORNEY FOR THE BOARD J. Connolly, Counsel INTRODUCTION The Veteran had active service from February 1942 to July 1945. The Veteran died in November 2010, and the substitute appellant is his surviving spouse. This matter comes before the Board of Veterans' Appeals (Board) on appeal from an October 2006 decision of the Los Angeles, California Department of Veterans Affairs (VA) Regional Office (RO), in which the RO amended the Veteran's disability compensation award to reflect the addition of his dependent spouse (the appellant), effective June 1, 2005. By a December 2011 rating action of the RO in St. Paul, Minnesota, the effective date reflecting the addition the Veteran's dependent spouse was changed to July 1, 2002. However, such did not resolve the appeal, as the Veteran had asserted entitlement to a disability compensation award that reflected the addition of his dependent spouse since the original award of service connection in 1946. See AB v. Brown, 6 Vet. App. 35, 38 (1993). Upon the death of a Veteran, periodic monetary benefits to which he or she was entitled at death under existing ratings or decisions, or those based on evidence in the file at the date of death, due and unpaid for a period of not more than two years prior to death, may be paid to certain persons such as the Veteran's surviving spouse, children, or dependent parents. 38 U.S.C.A. § 5121 (West 2002); 38 C.F.R. § 3.1000 (2012). An amendment to 38 U.S.C.A. § 5121 removed the two-year restriction upon payment of accrued benefits, providing that a claimant may recover the full amount due prior to the date of the Veteran's death. This amendment applies only to deaths occurring on or after the date of enactment, which was December 16, 2003. See The Veterans Benefits Act of 2003, Pub. L. No. 108-183, § 104, 117 Stat. 2651 (Dec. 16, 2003). Effective October 10, 2008, the law was changed concerning substitution in the case of the death of a claimant. The newly revised statute provides that, "If a claimant dies while a claim for any benefit under a law administered by the Secretary, or an appeal of a decision with respect to such a claim, is pending, a living person who would be eligible to receive accrued benefits due to the claimant may, not later than one year after the date of the death of such claimant, file a request to be substituted as the claimant for the purposes of processing the claim to completion." 38 U.S.C.A. § 5121A. The Veteran's surviving spouse, the appellant, was properly substituted as the claimant in this appeal by the RO in an April 2011 memorandum. Therefore, the Board may proceed to adjudicate the claims for accrued benefits purposes based on substitution of the appellant. Id. This case was remanded in February 2013 for the appellant to be afforded a Board hearing, but she did testify at such a hearing. Thus, the Board will proceed with the appeal. Please note this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2012). 38 U.S.C.A. § 7107(a)(2) (West 2002). FINDINGS OF FACT 1. In an August 1945 rating decision, service connection was granted for psychoneurosis and a 50 percent rating was assigned. 2. In a March 1947 rating decision, the disability rating was reduced to 30 percent. 3. In June 1950, a VA Form 8-686c, Declaration as to Marital Status, was received the Veteran in which he again reported that the appellant was his spouse 4. Effective October 1, 1978, Public Law 95-479 amended 38 U.S.C.A. § 315 (now numbered 38 U.S.C.A. § 1115) to provide additional compensation for dependents for any veteran with service-connected disabilities rated not less than 30 percent. 5. At the time of the change in law, the RO was required to notify the Veteran of the amendment, and the appellant has not submitted sufficient evidence to rebut the presumption of regularity. 5. The Veteran did not file a claim requesting that his dependent spouse be added to his compensation award until June 2003. CONCLUSION OF LAW The proper effective date for adding the Veteran's spouse to the compensation award is July 1, 2002. 38 U.S.C.A. §§ 1115, 5110, 5111 (West 2002 and Supp. 2012) ; 38 C.F.R. §§ 3.31, 3.114, 3.204, 3.205, 3.400, 3.401 (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veterans Claims Assistance Act of 2000 (VCAA) The VCAA includes an enhanced duty on the part of VA to notify a claimant as to the information and evidence necessary to substantiate a claim for VA benefits. The VCAA also redefines the obligations of VA with respect to its statutory duty to assist claimants in the development of their claims. See 38 U.S.C.A. §§ 5103, 5103A. The Board must make a determination as to the applicability of the various provisions of the VCAA to a particular claim. See Holliday v. Principi, 14 Vet. App. 282 -83 (2001). For reasons expressed immediately below, the Board finds that resolution of the issue at hand is based on the operation of law and that the VCAA is generally not applicable. In Manning v. Principi, 16 Vet. App. 534 (2002), citing Livesay v. Principi, 15 Vet. App. 165 (Aug. 30, 2001) (en banc), the United States Court of Appeals for Veterans Claims (Court) held that the VCAA has no effect on an appeal where the law, and not the underlying facts or development of the facts, is dispositive in the matter. The Board finds that such is the case as to the issue addressed herein. Therefore, based on the Court's decision in Manning, the Board concludes that the appellant's appeal is not subject to the provisions of the VCAA. Nonetheless, the Board also finds that the claimant has been accorded ample opportunity to present evidence and argument as required by the Court's jurisprudence in general. See 38 C.F.R. § 3.103 (2012). Dependent Spouse Award After the Veteran separated from service in 1945, he immediately applied for VA compensation benefits. In his application, he reported that he was not married. In an August 1945 rating decision, service connection was granted for psychoneurosis and a 50 percent rating was assigned. In December 1945, the Veteran and the appellant married. The Veteran notified VA of his change in dependency status. A March 1946 "Supplemental Award" sheet reflects that the appellant was added to the Veteran's award as a dependent. However, a year later, in a March 1947 rating decision, the disability rating was reduced to 30 percent effective May 1947. Thus, additional compensation was no longer warranted for the appellant as a dependent at that time since a 50 percent rating was required. In June 1950, a VA Form 8-686c, Declaration as to Marital Status, was received the Veteran in which he again reported that the appellant was his spouse. In June 2003, the Veteran's claim for an increased rating and for service connection for another disability was received. In May 2004, the Veteran again requested an increased rating. In a December 2004 rating decision, an increased rating of 50 percent was granted for a service-connected disability effective from May 28, 2004. Thereafter, a February 2006 rating decision increased the disability rating to 70 percent effective from June 13, 2002, a year before the June 2003 claim was received. In March 2006, the RO notified the Veteran of this award and also informed him that he was being paid as a single veteran with no dependents. He was advised that since he was rated above 30 percent disabled, he might be entitled to additional benefits for dependents, but before those additional benefits could be granted, he needed to complete and furnish VA a VA Form 21-686, Declaration of Status of Dependents." In May 2006, the Veteran's representative indicated that the Veteran had been rated as 30 percent disabled since May 7, 1947, and had claimed additional benefits based on a dependent spouse via a VA Form 8-686c received in June 1950. Thus, it was argued that the additional benefits for a dependent spouse should be granted effective June 16, 1950. In a September 2006 decision, the RO explained that the Veteran was not entitled to additional benefits for a dependent spouse in 1950 because his disability rating was 30 percent, not the required 50 percent. It was noted that due to a change in the law that occurred in 1978, the required disability percentage was reduced to 30 percent and VA notified veterans who were in receipt of disability ratings at 30 percent or more of the change in the law, and provided them dependency questionnaires to claim this benefit in 1978, 1981, and 1983, to which the Veteran did not respond. There was no indication that the Veteran completed this form and submitted it to VA nor was there evidence that any of the forms were returned to VA from the post office as undeliverable. The RO noted that additional benefits were only payable from the date that the completed form was received. To that end, the Veteran was further advised that he had recently been requested to complete such a form. In September 2006, the form was received, listing the appellant as the Veteran's spouse. Subsequently, in October 2006, the RO granted additional benefits to the Veteran for a dependent spouse (the appellant) effective from June 1, 2005. The Veteran disagreed with the assigned effective date for the addition of his spouse for dependency benefits purposes. In the statement of the case, the RO explained that the June 1, 2005 date was one year prior to the date of claim for additional benefits for the dependent spouse. Apparently, as the claim was received in May 2006, June 1, 2006 represents the first day in the month in which the requested benefit would be payable, and June 1, 2005 is one year prior to that date. By a December 2011 rating decision, the effective date reflecting the addition the Veteran's dependent spouse was changed to July 1, 2002. That date is one year prior to the date of the original July 2003 claim for an increased rating and earlier than the June 1, 2005 date. The appellant and her representative argue that VA ignored that the Veteran and the appellant were married, as they had remained married since 1945 and had maintained continuous cohabitation at a common address which was of record with VA. They noted that VA was specifically advised when they first married and again in 1950. Effective October 1, 1978, Public Law 95-479 amended 38 U.S.C.A. § 315 (now numbered 38 U.S.C.A. § 1115) to provide additional compensation for dependents for any veteran with service-connected disabilities rated not less than 30 percent. This was a change from the prior law that required, as noted, 50 percent or more ratings. Except as otherwise provided, the effective date of an 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 U.S.C.A. § 5110(a); 38 C.F.R. § 3.400. An award of additional compensation for dependents based on the establishment of a rating in the percentage specified by law for that purpose shall be payable from the effective date of such rating, but only if proof of dependents is received within one year from the date of such rating. 38 U.S.C.A. § 5110(f). The effective date of the award of any benefit or increase by reason of marriage or the birth/adoption of a child shall be the date of that even if proof is received by the Secretary within a year from the date of marriage, birth or adoption. 38 U.S.C.A. § 5110(n). Regarding additional compensation for dependents, the effective date will be the latest of the: (1) claim date; (2) date the dependency arises; (3) effective date of the qualifying disability rating provided evidence of dependency is received within a year of notification of such rating action; or (4) date of commencement of the veteran's award. 38 C.F.R. § 3.401(b). The "date of claim" for additional compensation for dependents is the date of the Veteran's marriage or birth/adoption of a child, if evidence of the event is received within a year of the event; otherwise, the date notice is received of the dependent's existence, if evidence is received within a year of notification of such rating action. 38 C.F.R. § 3.401(b)(1). If the payment of additional compensation is due to a change in the law or an administrative issue, the effective date of the increase shall be fixed in accordance with the facts, but shall not be earlier than the date of the change in the law. In no event shall the increase be retroactive for more than one year from the date of application for the increase or the date of administrative determination, whichever is earlier. See 38 U.S.C.A. § 5110(g). If a claim is reviewed at the claimant's request more than a year after the effective date of the law, benefits may be authorized for one year prior to the date of receipt of the request. 38 C.F.R. § 3.114(a)(3). Following the passage of Pub. L. No. 95-479, VA promulgated a circular setting forth procedures for ROs to follow. Department of Veterans Benefits (DVB) Circular 21-78-10 provided guidance for the implementation of Pub. L. No. 95-479 and stated that a pre-printed computer letter would be sent as soon as possible (probably mid-November) to all veterans in receipt of compensation based on 30 percent through 49 percent. The letter would advise veterans that the new law provided compensation on account of a spouse, child, or dependent parent for veterans having a service-connected disability of 30 percent or more, and that if a claim for those benefits and supporting evidence was received before October 1, 1979, the increased compensation for dependents would be effective from October 1, 1978. Otherwise, the increased compensation would be available from the date of receipt of the claim and evidence. The reverse side of the letter was to contain a form to complete and return to the RO to apply for these benefits. In the event that a computer letter was not sent to a veteran rated 30 to 49 percent disabled, message 899B, DEPENDENCY LETTER NOT SENT, would be generated on VA Form 20-8270. The United States Court of Appeals for Veterans Claims (Court) has indicated that VA may have had a substantive duty to notify veterans, such as the appellant in this case, who were in receipt of VA compensation at a level between 30 percent and 49 percent, of the change in the law and the potential effect of the new law upon their benefit payments. Gold v. Brown, 7 Vet. App. 315, 319 (1995). In another case, the Court held that the VA's failure to provide a similar notice required by a VA circular amounted to administrative error. Blount v. West, 11 Vet. App. 34 (1998). Moreover, the Board notes that a DVB circular can have "the force and effect of law." See Montalvo v. Brown, 7 Vet. App. 312, 314 (1995) (finding that a provision of a DVB circular was substantive because it implemented rather than interpreted the statutory right of election and thereby "affected individual rights and obligations."). The Court specifically indicated that it did not matter if the circular dealt with the procedures VA was to employ to give effect to the Act. Id. (citing Fugere v. Derwinski, 1 Vet. App. 103 (1990) ("[I]t affected a substantive right and its placement in a procedural manual cannot disguise its true nature as a substantive rule."). As noted above, DVB Circular 21-78-10 similarly provided procedural guidelines for the implementation of Pub. L. No. 95-479. As such, the circular appears to have been substantive, and thus, had "the force and effect of law." Accordingly, the Board finds that VA did have a duty to notify veterans, who were in receipt of VA compensation at a level between 30 percent and 49 percent, of the change in law. Although the Veteran in this case had been awarded a 30 percent disability rating and was receiving monthly compensation payments at the time, the claims file and Virtual VA System do not contain a copy of such a notice letter issued pursuant to DVB Circular 21-78-10. To resolve situations such as this one, the Court has noted that there is a presumption of regularity in the law to the effect that "[t]he presumption of regularity supports the official acts of public officers and, in the absence of clear evidence to the contrary, courts presume that they have properly discharged their official duties." Clear evidence to the contrary is required to rebut the presumption of regularity. Ashley v. Derwinski, 2 Vet. App. 307 (1992), (quoting United States v. Chemical Foundation, 272 U.S. 1, 14-15 (1926)). While the Ashley case dealt with regularity in procedures at the Board, in Mindenhall v. Brown, 7 Vet. App. 271 (1994), the Court applied the presumption of regularity to procedures at the RO level, such as in the instant case. The Court specifically held that a statement of an appellant, standing alone, is not sufficient to rebut the presumption of regularity in RO operations. See Jones v. West, 12 Vet. App. 98, 100 (1998); Ashley v. Derwinski, 2 Vet. App. 62. 64-65 (1992). Once the presumption of regularity has been rebutted by clear evidence, however, the burden of proof shifts to the VA to show that the administrative procedure was actually complied with. In order to rebut the presumption of administrative regularity in this case, the evidence must show that the Veteran in fact did not receive the notice informing him of the 1978 change in the law and clear evidence must show the VA did not provide such notice. The appellant in this case has stated that the Veteran had been married to her the whole time and that they resided at the same address. She said that he did not receive the notice at any time. Evidence or fact of non-receipt may arguably raise an inference that a notice letter was not mailed, but it is not the type of "clear evidence" required to rebut the presumption of regularity. See Montalvo v. Brown, 7 Vet. App. 312, 314; Ashley. There is nothing in the record that shows that a notice letter was not actually mailed by the RO. In fact, the claims file and Virtual VA System do not contain a VA Form 20-8270 with a message 899B indicating that a dependency letter was not sent. Therefore, the Board finds that there is insufficient evidence to rebut the presumption of regularity in RO operations. Accordingly, it must be presumed that the Veteran was sent a notice letter notifying him of change of the law in 1978, and as such, he was placed on notice to submit his updated dependent information in order to receive additional compensation. The Board notes that the Veteran did not submit any dependent information following the enactment of Pub. L. No. 95-479. In fact, he did not submit any such information until June 2003, which was well over a year after the effective date of this liberalizing legislation. Applicable regulation provides that if a claim is reviewed at the request of a claimant more than one year after the effective date of a change in law, benefits may be authorized for a period of one year prior to the date of the receipt of such request if the requirements for entitlement were in effect at the time of the change in law and continuously remained so. 38 C.F.R. § 3.114(a)(3). Thus, July 1, 2002, represented the first day of the month following the date one year prior to the date of the receipt of the Veteran's claim in June 2003. Therefore, the Board finds that entitlement to an effective date prior to July 1, 2002 for additional compensation based on recognition of a dependent spouse, is not warranted. ORDER An effective date prior to July 1, 2002, for additional compensation benefits for a dependent spouse, the appellant, for accrued benefits purposes based on substitution of the appellant is denied. ____________________________________________ S. L. Kennedy Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs