Citation Nr: 1331895	
Decision Date: 10/03/13    Archive Date: 10/07/13

DOCKET NO.  11-16 788	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs (VA) Regional Office (RO) in Houston, Texas


THE ISSUE

Entitlement to a refund of $1,200 of contributions to the 38 U.S.C. Chapter 32 "Post-Vietnam Veterans Education Assistance Program" (VEAP).


REPRESENTATION

Appellant represented by:	Disabled American Veterans


WITNESS AT HEARING ON APPEAL

Appellant


ATTORNEY FOR THE BOARD

J.B. Freeman, Counsel

INTRODUCTION

The Veteran (appellant) served on active duty from September 1981 to November 1992 and from June to November 1995.  

This matter comes before the Board of Veterans' Appeals (Board) on appeal from a September 2010 decision of the RO in Muskogee, Oklahoma, which denied a refund for VEAP contributions.  The claims file was transferred to the Houston, Texas, RO to provide the Veteran with a local hearing before a Travel section of the Board.  The Veteran testified before the undersigned at an August 2011 hearing at the RO.  A transcript has been associated with the file.  The Board has not only reviewed the Veteran's physical claims file but also the Veteran's file on the "Veterans Benefits Management System" and the "Virtual VA" system to insure a total review of the evidence.  


FINDINGS OF FACT

1.  The Veteran first entered active service after January 1, 1977, and before July 1, 1985, and made a $1,200 VEAP contribution.

2.  The Veteran has been disenrolled from VEAP participation.

3.  The Veteran was not eligible for transfer into the Montgomery G.I. Bill education assistance program.


CONCLUSION OF LAW

A refund of a $1,200 contribution to the VEAP is warranted.  38 U.S.C.A. §§ 3011, 3012, 3221, 3222, 3223, 3452, 5107 (West 2002 & Supp. 2013); 38 C.F.R. §§ 3.102, 21.5030, 21.5040, 21.5041, 21.5052, 21.5060, 21.5064, 21.7040, 21.7045 (2013).

REASONS AND BASES FOR FINDINGS AND CONCLUSION

In August 2010, the Veteran submitted a claim requesting disenrollment from the VEAP and applying for a refund.  See 38 U.S.C. § 3201 et seq.; 38 C.F.R. § 21.5001 et seq.  For the reasons that follow, the Board concludes that a refund is warranted.  

As stated in the Introduction, the Veteran served on active duty from September 1981 to November 1992 and from June to November 1995.  The Veteran reports that he made a one-time $1,200 contribution to the VEAP fund on the day after his separation from his first period of service in November 1992 using money from a separation bonus.  The claims file includes a computer report indicating a pay reduction amount of $1,200.  The Board finds that the Veteran did make a $1,200 contribution.  Because the Veteran first entered active service after December 31, 1976 and before July 1, 1985, and made the required contribution, he was eligible for VEAP education assistance.  See 38 C.F.R. § 21.5040.

Disenrollment from VEAP will occur when a veteran has not utilized all of his or her entitlement benefits within the 10-year period stated in 38 C.F.R. § 21.5041 (in this case 10 years after the Veteran separated from service), and at the end of one year thereafter has not filed a claim for educational assistance allowance as provided in 21.5030(c).  38 C.F.R. § 21.5060.

The Veteran's delimiting date for participation in VEAP is 10 years after the Veteran separated from a period of service longer than 90 days.  38 C.F.R. § 21.5041(a)(1).  The Veteran's 1995 service was more than 90 days; therefore his delimiting date fell in November 2005.  The Veteran did not file for an extension.  See 38 C.F.R. §§ 21.5030, 21.5042.  The Veteran was automatically disenrolled as a result.  38 C.F.R. § 21.5060.  

A disenrolled individual will be refunded all contributions made by him or her to the fund.  38 C.F.R. § 21.5064(a).  The amount of the contributions refunded upon disenrollment shall be limited to the amount of his or her contributions not utilized to receive benefits as of the date of disenrollment, less any outstanding debts resulting from overpayments of educational assistance allowance.  Id.  In this case, the Veteran made a $1,200 contribution, did not utilize any benefits, and has no outstanding debts resulting from overpayments of educational assistance.  The Board concludes, therefore, that a refund of the full $1,200 VEAP contribution is warranted.

The claims file reflects that the Veteran's information had been added to the computer program which governs 38 U.S.C.A. Chapter 30 (Montgomery G.I. Bill) education assistance benefits.  The file reflects confusion at the RO as to how the Veteran's information appeared in the Chapter 30 system, indicating both that a transfer of entitlement occurred and the RO's belief that such a transfer was not legally allowed.  Contributions to the Montgomery G.I. Bill education assistance program are not refundable.  See generally 38 C.F.R. Chapter 21, Subpart K.  Even though the RO thought that such a transfer was not legally allowed, the RO concluded that a refund was not warranted because the transfer had nonetheless occurred and the Montgomery G.I. Bill provisions did not allow for refunds.  

The Montgomery G.I. Bill education assistance program is for those veterans first entering service after June 30, 1985, or those with remaining Chapter 34 entitlement.  See 38 U.S.C.A. § 3011, 3012; 38 C.F.R. § 21.7040.  Chapter 34 eligibility covered veterans who served on active duty for a period of 180 days, any part of which occurred between January 31, 1955, and January 1, 1977.  See 38 U.S.C.A. § 3452(a)(1)(A).  It is undisputed that the Veteran first entered service in September 1981, well after January 1, 1977, and before July 1, 1985.  Thus, he had no Montgomery G.I. Bill eligibility or remaining Chapter 34 eligibility.  Contrary to the RO's conclusion, a transfer of VEAP to Montgomery G.I. Bill benefits is legally allowed but only in certain circumstances for those individuals with VEAP eligibility on active duty on October 9, 1996.  38 C.F.R. § 21.7045(d), (e).  Again, the record is not in dispute that the Veteran's last period of active service ended in November 1995.  Moreover, the Veteran has contended that he never applied for a transfer of eligibility from VEAP to Montgomery G.I. Bill benefits.  In light of the foregoing, the Board finds that a transfer from VEAP to Montgomery G.I. Bill education benefits should not have occurred, even if the Veteran had applied for a transfer.  The Veteran's contribution should not have been moved into the Montgomery G.I. Bill fund and should have instead been in the VEAP fund.  The transfer appears to have been administrative error, which is not a bar to a refund under VEAP regulations.  

In light of the foregoing, the Board finds that the evidence supports the Veteran's claim for a refund of $1,200 of VEAP contributions.  38 U.S.C.A. § 5107(b); 38 C.F.R. § 3.102.  Given the favorable outcome of this case, any due process error is not prejudicial to the Veteran.  Mlechick v. Mansfield, 503 F.3d 1340 (Fed. Cir. 2007).


ORDER

A refund of a $1,200 contribution to the VEAP is granted.




____________________________________________
K.J. ALIBRANDO
Veterans Law Judge, Board of Veterans' Appeals

Department of Veterans Affairs