Citation Nr: 1327575 Decision Date: 08/28/13 Archive Date: 09/05/13 DOCKET NO. 10-32 470 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in North Little Rock, Arkansas THE ISSUE Entitlement to an apportionment of the Veteran's disability compensation benefits on behalf of the Veteran's child, N.T. REPRESENTATION Appellant represented by: Army and Navy Union, USA Veteran represented by: Disabled American Veterans WITNESS AT HEARING ON APPEAL Appellant ATTORNEY FOR THE BOARD L. A. Rein, Counsel INTRODUCTION The Veteran served on active duty from May 1976 to May 1979 and from January 1981 to May 1987. The appellant is the guardian of the Veteran's child, N .T. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a November 2009 special apportionment decision issued by the Department of Veterans Affairs (VA) Regional Office (RO) in No. Little Rock, Arkansas, in which the RO denied the appellant's claim for an apportionment of the Veteran's disability compensation benefits on behalf of N.T. In April 2011, the Veteran indicated that he did not want a hearing in this appeal. In July 2011, the Board remanded the claim of entitlement to an apportionment of the Veteran's disability benefits on behalf of his minor child to schedule the appellant for a requested hearing. In October 2011, the appellant testified during a videoconference hearing before the undersigned Veterans Law Judge. A transcript of that hearing is of record. At the same time of issuance of the July 2011 remand, the Board issued two other remands, regarding other appeals perfected by the Veteran. In March 2012, the Board remanded this matter for additional development. Lastly, the Board notes that the issues of entitlement to an increased rating for a right wrist disability and the issue of whether an overpayment of VA compensation benefits in the amount of $1,652.47 was properly created are addressed in separate decisions. FINDINGS OF FACT 1. The appellant is the grandmother of N.T, who is legally recognized as the Veteran's child. 2. The Veteran was incarcerated during the time period from October 2006 to December 2007. During this period, the evidence demonstrates that the appellant's income exceeded her expenses. 3. The evidence of record demonstrates that the Veteran is reasonably discharging his responsibility for child support. 4. Apportionment of the Veteran's compensation benefits for child support would result in undue hardship to the Veteran. CONCLUSION OF LAW The criteria for an apportionment of the Veteran's disability benefits have not been met. 38 U.S.C.A. §§ 5103, 5103A, 5307 (West 2002 & Supp. 2012); 38 C.F.R. §§ 3.450, 3.451, 3.452, 3.458 (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. Duty to Notify and Assist The Veterans Claims Assistance Act of 2000 (VCAA) enhanced VA's duty to notify and assist claimants in substantiating their claims for VA benefits, as codified in pertinent part at 38 U.S.C.A. §§ 5103, 5103A (West 2002 & Supp. 2012); 38 C.F.R. § 3.159, 3.326(a) (2012). VCAA, however, does not apply to decisions regarding the manner in which benefits are paid. Sims v. Nicholson, 19 Vet. App. 453, 456 (2006). An apportionment decision involves deciding how existing benefits are to be paid; thus, under Sims, the VCAA is not applicable to this claim and no further discussion of the duty to assist is necessary. Nevertheless, the claim for an apportionment is a "contested claim," and is subject to the special procedural regulations set forth in 38 C.F.R. §§ 19.100, 19.101, and 19.102 (2012). The applicable contested claims procedures were followed in this case. The RO provided the parties, the appellant and the Veteran, with notices and determinations related to the contested claim, and advised both parties of the applicable law and regulations. The Veteran and the appellant were each appropriately notified of the November 2009 special apportionment decision and provided copies of the July 2010 SOC. In addition, the appellant provided testimony during an October 2011 Board hearing before the undersigned. A copy of the transcript was provided to the Veteran pursuant to the Board's March 2012 remand instructions. II. Factual Background and Analysis The record reflects that the appellant has been the guardian of the Veteran's child, N. T., since October 1998. The Veteran is currently in receipt of VA disability compensation benefits, with a combined disability rating of 40 percent. He is in receipt of additional payment for his child, N.T. In March 2007, the Veteran requested an apportionment of his benefits on behalf of his child, N.T., during his incarceration. [The record reflects that the Veteran was incarcerated from October 2006 to December 2007.] In May 2007, the appellant filed a VA Form 21-0788, Information Regarding Apportionment of Beneficiary's Award, in which she listed her income, net worth, and expenses. Her income and net worth were listed in total of $6,188.00 and expenses of $1,552.00. In May 2007, the Veteran indicated that he was paying $100 a month in child support. A January 2008 state Department of Human Services letter shows that the Veteran would receive $71 in food stamps each month for the period from January 2008 to December 2008. A March 2008 VA contact note reflects that the Veteran requested that his apportionment claim be cancelled. In a June 2008 Social Security Administration (SSA) application form, the Veteran indicated that he was a homeless Veteran and that he provided $200.00 per month in child support for his daughter. In 2009, the Veteran submitted copies of cashier's checks for child support payments. In April 2009, the appellant submitted another VA Form 21-0788 in which she reported income of $126.00 per month from child support paid by the Veteran and monthly expenses totaling $1,553.57. In August 2009, the RO requested clarification from the appellant regarding how she met her monthly expenses. The RO also requested financial information from the Veteran. In October 2009, the appellant submitted a new VA Form 21-0788, in which she reported receiving $1,064.00 monthly in gross wages from all employment, $674.00 monthly in Supplemental Security Income (SSI)/Public Assistance, and $124.80 monthly in child support; resulting in a total monthly income of $1,862.80. She also reported monthly expenses totaling $1,916.29. In the same month, the Veteran submitted a VA Form 21-0788 in which he reported receiving monthly income of $713.90, comprised of $144.00 in SSI/public assistance and $546.90 in VA benefits. He reported monthly expenses totaling $279.34. The monthly expenses reported by the Veteran were $17.00 for rent, $110.00 for food, $87.38 for utilities, $34.96 for the telephone bill, and $30.00 for clothing. Although he reported paying $31.20 per week in child support, he did not include this amount in his list of expenses. The additional monthly expense of $124.80 in child support would bring his total monthly expenses to $404.14. In October 2009, the Veteran submitted several documents regarding his child support obligations. These documents include a February 2009 Order to Modify Support, in which the Circuit Court of Hot Spring County, Arkansas decreased the Veteran's child support obligation for N.T. to $26.00 per week, effective in December 2008. The Order also notes that the Veteran had a child support arrearage in the amount of $17,160.00 as of December 2008. The Circuit Court ordered the Veteran to pay $5.20 per week to satisfy payment of this arrearage. The Veteran submitted a copy of his September 2009 payment of $124.80 to the Arkansas Office of Child Support Enforcement (OCSE). During VA treatment from October 2009 to June 2010, the Veteran consistently reported during his VA Supported Housing (VASH) monthly updates that he was paying his monthly child support obligation. However, during the October 2011 hearing, the appellant testified that she had received child support in the past, but had last received a child support payment from the Veteran in July 2011. Additionally, in support of her claim for an apportionment, the appellant has submitted a June 2010 letter from the Hot Spring County OCSE reporting that the Veteran's child support arrears were $16,864.00 as of May 31, 2010. During the October 2011 hearing, the appellant testified that the Veteran owed her $17,000.00 in back child support. Additionally, the Board notes that the Veteran's monthly rental expense, as reported in October 2009, was only $17.00 because he was, at that time, participating in the VASH Program as part of the Health Care for Homeless Veterans (HCHV) Program. VA treatment records from October 2009 to June 2010 reflect that the Veteran continued to reside at the address listed in his October 2009 VA Form 21-0788, for which he paid $17.00 per month in rent as a VASH participant. A November 2009 VA record reflects that the Veteran was in a homeless program through the VA hospital and was in subsidized housing. In an April 2011 communication, the Veteran provided a new address. He again provided a new address in December 2011 and January 2012. Similarly, in October 2009, the appellant reported $1,064.00 in monthly income from gross wages from all employment. During the October 2011 hearing, she testified that she had lost her job in 2007, but supported the Veteran's child with the help of her siblings and with some part-time work at a restaurant. She added that her part-time work was not on a regular basis; rather, her only income came from SSI and financial assistance from her family members. In November 2009, the appellant was advised that her claim for an apportionment of the Veteran's VA benefits was denied because the total payments payable to the Veteran did not permit payment of a reasonable amount to any apportionee. A July 2010 special apportionment decision reflects that the Veteran's net income after expenses was $46.00 and the claimants was -$54.00. It was determined that the Veteran was behind on child support of $16,864.00 as of May 31, 2010 and that he was contributing $124.80 per month. The Veteran stated that he was contributing $31.20 per week court ordered child support and provided some receipts of payments and documents the amount including payment on arrears/judgment payment. It was determined that the Veteran was contributing a reasonable amount for child support and the amount he pays in child support is noted to be more than the additional $40.00 in compensation that he is receiving for his child. In March 2012, the Board remanded this matter for additional development actions. A March 2012 report of general information reflects that the RO contacted the Veteran to verify his address. The Veteran stated that his address would not change as long as he had his lease. In March 2012, the Veteran and the appellant were sent a letter asking that they furnish income and expense information. In April 2012, the appellant reported no income. She reported the child's monthly expenses of $400 rent, $500 to $550 for food, $180 to $200 for utilities, $45 for the phone, $200 for clothing, $45 to $30 for school, $35 to $40 for household expenses and $200 for a car. The appellant asserted that the Veteran was living with his sister. She stated that most of the time the Veteran did not pay child support. To date, no response has been received from the Veteran as to his income and expense information requested in a March 2012 VA letter. In May 2012, the RO issued a supplemental statement of the case. Entitlement to apportionment for the Veteran's child while the Veteran was incarcerated was denied as need during the time the Veteran was incarcerated was not shown. In addition, apportionment for the Veteran's child following the Veteran's incarceration was denied because the evidence showed that the Veteran was contributing to his child's support and an apportionment would cause a hardship on the Veteran. In this regard, the RO determined that the Veteran was paying $124.90 per month in child support and that was considered a reasonable contribution for support of his child. VA regulations provide for two types of apportionments. A "general" apportionment may be paid under the circumstances set forth in 38 C.F.R. § 3.450 (2011). More specifically, the law provides that all or any part of the Veteran's VA compensation benefits may be apportioned if the Veteran is not residing with his spouse or children, and the Veteran is not reasonably discharging his responsibility for the spouse's support. 38 U.S.C.A. § 5307 (West 2002); 38 C.F.R. §§ 3.450, 3.452 (2011). It is not necessary for the claimant to establish the existence of hardship in order to obtain an apportionment under 38 C.F.R. § 3.450 (2011). See Hall v. Brown, 5 Vet. App. 294 (1993). The appellant does not claim, and the record does not show, that the Veteran has any responsibility for spousal support. The second type of apportionment is a "special" apportionment which may be paid under the circumstances set forth in 38 C.F.R. § 3.451 (2011). That regulation provides that, without regard to any other provision regarding apportionment, where hardship is shown to exist, compensation may be apportioned between the Veteran and his or her dependents on the basis of the facts of the individual case as long as it does not cause undue hardship to the other persons in interest. In determining the basis for special apportionment, consideration is to be given to such factors as the amount of VA benefits payable, other income and resources of the Veteran and those dependents in whose behalf the apportionment is claimed, and the special needs of the Veteran, his or her dependents and the apportionment claimants. 38 C.F.R. § 3.451 (2012) further provides that apportionment of more than 50 percent of the Veteran's benefits is ordinarily considered to constitute undue hardship on him or her while apportionment of less than 20 percent of his or her benefits is ordinarily considered insufficient to constitute a reasonable basis for any apportionee. A Veteran's benefits will not be apportioned where the total benefit payable to the disabled person does not permit payment of a reasonable amount to any apportionee. 38 C.F.R. § 3.458(a) (2012). With respect to the appellant's claim that the Veteran owes thousands of dollars in back child support and that he is not paying current child support, the Board notes that the remedy for receiving those monies is not though an apportionment; it is through a state court. The Board, however, must assess in this case, whether the Veteran is reasonably discharging his responsibility for his child's support in determining whether an apportionment is warranted on behalf of the Veteran's minor child, N.D. See 38 U.S.C.A. § 5307(a)(2) (West 2002); 38 C.F.R. § 3.450(a)(1)(ii) (2012). As noted, the Veteran has a court-ordered child support obligation. He does not deny he is behind in payments. In 2010, the Veteran provided some receipts of payments and documents the amount including payment on arrears/judgment payment made to the appellant for the minor child. The Board finds that the Veteran was reasonably discharging his responsibility for support of his minor child at the time the appellant submitted her claim. See 38 U.S.C.A. § 5307(a)(2)(West 2002); 38 C.F.R. § 3.450(a)(1)(ii) (2012). Although the Veteran may not have paid the full amount of child support owed, he did provide funds to the appellant. As a result, the Board finds no basis to award the appellant a general apportionment of the Veteran's benefits pursuant to 38 C.F.R. § 3.450 (2012). The Board also notes that all or part of the compensation not paid to an incarcerated Veteran may be apportioned to the Veteran's dependents on the basis of individual need. 38 C.F.R. § 3.665(e). In light of the appellant's May 2007 VA Form 21-0788, Information Regarding Apportionment of Beneficiary's Award, in which she listed her income and net worth in total of $6,188.00 and expenses of $1,552.00, the Board finds that the basic living necessities were met for the Veteran's child. Considering that when deducting the expenses of the appellant from her net worth, there was a surplus of over $4,000.00 to provide for the well being of the Veteran's child. In this regard, the Veteran's child was not shown to be deprived of essentials such as food, clothing, shelter or medical expenses during his period of incarceration. Thus, in this case, the Board finds that during the period of the Veteran's incarceration the evidence does not show that the appellant had an individual need for support based on limited means. Turning to consideration of a special apportionment, the award of a special apportionment would cause undue financial hardship on the part of the Veteran. As the Board has noted above, while the Veteran's reported expenses do not exceed his income, the evidence shows that the Veteran is homeless and relies on VA subsidized housing. Thus, he has no stable living arrangements. There is no evidence of employment or other income aside from VA disability benefits and Social Security Administration SSI benefits. As seen above, the Veteran does not have a surplus of monies to meet additional expenses at the end of each month. The Board finds that the award of a special apportionment of the Veteran's disability benefits is not warranted because although hardship on the part of the appellant is shown, such an award would cause an undue financial burden on the part of the Veteran. 38 C.F.R. §§ 3.451, 3.453 (2012). As the total benefit payable to the Veteran does not permit the payment of a reasonable amount to the appellant, the Veteran's benefits cannot be apportioned. 38 C.F.R. §§ 3.451, 3.458(a) (2012). The 'benefit-of-the-doubt' rule is not for application in a contested claim such as this case because the benefit of the doubt cannot be given to both the appellant and the Veteran simultaneously. Elias v. Brown, 10 Vet. App. 259, 263 (1997). ORDER Apportionment of the Veteran's disability compensation benefits on behalf of the Veteran's child, N.T., is denied. ____________________________________________ K. PARAKKAL Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs