Citation Nr: 1334494 Decision Date: 10/30/13 Archive Date: 11/06/13 DOCKET NO. 09-20 895 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Providence, Rhode Island THE ISSUES 1. Whether a July 2008 decision granting a special apportionment of the Veteran's VA compensation benefits was proper. 2. Whether a May 2011 decision granting a special apportionment of the Veteran's VA compensation benefits was proper. REPRESENTATION Appellant represented by: The American Legion ATTORNEY FOR THE BOARD S. Layton, Counsel INTRODUCTION The Veteran served on active duty from April 1966 to December 1969. This case is before the Board of Veterans' Appeals (Board) on appeal from apportionment decisions of the Department of Veterans Affairs (VA) Regional Office (RO) in Providence, Rhode Island, dated in July 2008 and May 2011. The July 2008 decision granted an apportionment allotted from the Veteran's compensation benefits for the Veteran's child, K., and for the Veteran's spouse, D., before the effective date of their divorce. The May 2011 decision granted an apportionment allotted from the Veteran's compensation benefits for the Veteran's child, K. The Board also notes a rating decision dated in February 2011 concerning the status of K. as a helpless child. Neither party has appealed this decision nor is it the subject of this appeal. Therefore, the only claims before the Board in this appeal are the ones listed on the title page. The issue of whether a May 2011 decision granting a special apportionment of the Veteran's VA compensation benefits was proper is addressed in the REMAND portion of the decision below and is REMANDED to the RO via the Appeals Management Center (AMC), in Washington, DC. FINDINGS OF FACT 1. Prior to March 1, 2010, D. was legally recognized as the spouse of the Veteran. 2. K. is legally recognized as the child of D. and was a minor until September 2009. K. resides with D... 3. To date, the evidence does not indicate the Veteran discharged his responsibility for support of his legally recognized dependents, with whom he does not reside. 4. D.'s monthly income has exceeded her monthly expenses, and the Veteran does not have a financial hardship for the purpose of a special apportionment. CONCLUSION OF LAW The July 2008 decision granting a special apportionment of the Veteran's VA compensation benefits was proper. 38 U.S.C.A. §§ 5107, 5307 (West 2002 & Supp. 2013); 38 C.F.R. §§ 3.102, 3.450, 3.451, 3.452, 3.458 (2013). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. Duties to Notify and Assist The Veterans Claims Assistance Act of 2000 (VCAA) and implementing regulations impose obligations on VA to provide claimants with notice and assistance. 38 U.S.C.A. §§ 5102, 5103, 5103A, 5107, 5126 (West 2002 & Supp. 2013); 38 C.F.R §§ 3.102, 3.156(a), 3.159, 3.326(a) (2013). Proper VCAA notice must inform the claimant of any information and evidence not of record (1) that is necessary to substantiate the claim; (2) that VA will seek to provide; and (3) that the claimant is expected to provide. 38 U.S.C.A. § 5103(a); 38 C.F.R. § 3.159(b)(1). However, the United States Court of Appeals for Veterans Claims (Court) has held that the VCAA does not apply to decisions regarding how benefits are paid. Sims v. Nicholson, 19 Vet. App. 453, 456 (2006). An apportionment decision involves a determination as to how existing benefits are paid, such as between the Veteran and his dependents in the case at hand. Under the reasoning in Sims, the requirements of the VCAA have been met in this case. However, while not specifically addressing the apportionment statute (38 U.S.C.A. § 5307), the Court has held that the VCAA does not apply to claims predicated on chapter 53 of title 38 of the U. S. Code, which concerns special provisions relating to VA benefits. See Lueras v. Principi, 18 Vet. App. 435 (2004); Barger v. Principi, 16 Vet. App. 132 (2002). Even so, the Board notes that both the claimant and the Veteran were each advised in separate April 2008 letters of the evidence and information necessary to adjudicate the apportionment claim. These letters requested that they provide additional, updated information and evidence relevant to the pending claim. Both the Veteran and the claimant eventually submitted some financial information regarding their income and expenses. Additionally, the Board notes that the contested claims procedures codified at 38 U.S.C.A. § 7105A(b) and 38 C.F.R. §§ 19.100 through 19.102 and 20.500 through 20.504 are applicable to apportionment claims. In this regard, the Board notes that both parties received notice of the July 2008 decision awarding the appellee an apportionment on her behalf and as custodian for K., and the June 2009 statement of the case (SOC). Therefore, neither party will be prejudiced as a result of the Board proceeding to the merits of the claim. II. Apportionment 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 (2013). 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 support of the spouse or children. 38 U.S.C.A. § 5307 (West 2002); 38 C.F.R. §§ 3.450, 3.452 (2013). 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 (2013). See Hall v. Brown, 5 Vet. App. 294 (1993). 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 (2013). 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 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) (2013). In September 1996, the Veteran married D... In March 1998, they adopted child K. In an April 2002 rating decision, the Veteran was awarded a total disability rating based on individual unemployability (TDIU). In August 2007, D. informed VA that the Veteran had been arrested for a felony. She indicated that the Veteran would undergo sentencing in September 2007. She said that she and the Veteran had adopted a handicapped child-K. She related that the Veteran's VA benefits covered their living expenses and asked that the Veteran's benefits not be stopped after his incarceration. In September 2007, the Veteran requested that VA move the direct deposit of his VA benefits to his account at the Rhode Island Department of Corrections. In October 2007, D. reiterated her belief that the Veteran's disability benefits would drop to $140/month after his conviction. She stated that their adopted son, K., was a multi-handicapped teenager with many needs. She said that she received $1,800 from the state to care for K., and she received $140/week from workers compensation. In November 2007, VA verified through a prison match that the Veteran was confined to a penal institution in August 2007. He had not yet been sentenced. D. filed for apportionment of the Veteran's VA benefits in correspondence dated in March 2008 on her behalf and on behalf of K. She related that the Veteran was going to accept a plea bargain and would likely be in prison for 20 years. She said that their adopted son was 100 percent handicapped. In April 2008, D. told VA that between her benefits and assistance from the state for K., she received $2,348.43 for the month of February. She said she had the following expenses: $2,540.23 mortgage, $450.00 oil, $300.00 propane, $60.00 cell phone, $125.00 dental/vision, $160.00 phone/cable/computer, $50.00 first credit card, $50.00 second credit card, $150.00 electricity, $80.00 car insurance, $27.00 life insurance, $250.00 gas for car, $25.00 miscellaneous, $200.00 food, $110.00 storage, $20.00 clothing, $100.00 Wal-Mart, $50.00 back medical bills, $25.00 back cable bill, $25.00 car maintenance. According to D., her monthly bills totaled $4,797.23. In June 2008, the Veteran told VA that his monthly income was $2,699.00 from his VA disability compensation. By way of assets, he said he had $3,600.00 in a bank account, a 1997 Jeep worth $5,300.00, and a 1995 camper worth $4,000.00. He indicated he had monthly living expenses of $1,100.00. He indicated that the average monthly amount he gave to support his spouse and/or children who were not living with him was "n/a". He also indicated that D. received $1,920.00 each month from the state to care for K. In the July 2008 rating decision on appeal, the RO allowed a special apportionment to D. and K. It was determined that as the Veteran had changed his direct deposit to the Department of Corrections, his spouse and child would not have access to the funds. The RO further reasoned that as the Veteran was in confinement, he would not need the money; an apportionment would not cause him an undue hardship. A monthly apportionment of $1,303.00 was granted through September 23, 2009, at which time the apportionment would be reduced to $1,200.00 due to K. turning 18 years old. The RO further found that as the Veteran had never informed VA of the adoption of K., K. would be added to the Veteran's disability compensation award as a dependent as of September 1, 2007-the first day of the month following the Veteran's spouse's first communication to VA of the existence of K.. Later in July 2008, the Veteran submitted a notice of disagreement (NOD). The Veteran reiterated that his spouse received $1,920.00 monthly from the state to take care of their child. He also indicated that he and his spouse were in the middle of a divorce. In August 2008, the Veteran entered a plea of nolo contendre or guilty to sexual assault and child molestation. He was sentenced to 12 years of prison service followed by 13 years of a suspended sentence with probation. The apportionment was continued in accordance with the provisions of 38 C.F.R. § 3.665(e). On his VA form 9 submitted in June 2009, the Veteran reiterated that D. received $1,900.00/month from the state for taking care of K. He also asserted that she received free nursing care. In September 2010, the RO confirmed that the Veteran's and D.'s divorce was finalized on March 1, 2010. Subsequently, notice was sent to the Veteran and to D. proposing to stop the apportionment payments. In January 2011, the RO terminated the apportionment effective April 1, 2010-the first day of the month following the finalization of the divorce. At that point, the Veteran was paid his VA disability benefits as a single Veteran with no dependents. Having considered the evidence of record and the available contentions of the parties, the Board finds that the July 2008 apportionment decision was valid. At that time, the Veteran was no longer residing with D. or K., as he was in a corrective institution awaiting sentencing. The evidence does not reflect that the Veteran had any source of income besides his VA disability compensation, and he had moved the direct deposit of his VA benefit to his account at the corrective institution. As the Veteran reported in June 2008 that the amount he provided for the support of D. and K. was "n/a," the evidence suggests that he was not providing any support for his dependent spouse and child. As reviewed above, the Veteran reported in June 2008 that he had monthly income of $2,699.00 and expenses of $1,100.00; thus, his monthly income considerably exceeded his expenses. Further, as the Veteran is confined to a corrective institution, the evidence suggests that his monthly expenses would be minimal. Contrastingly, D. reported in April 2008 that she had monthly income of $2,348.43 and expenses of $4,797.23; thus, her monthly income fell grossly short of her monthly expenses. The Board further notes that according to 38 C.F.R. § 3.451, ordinarily, apportionment of more than 50 percent of the veteran's benefits would constitute undue hardship on him. The Veteran reported that his VA TDIU benefit provided a monthly payment of $2,699.00. The July 2008 decision awarded an apportionment of $1,303.00. As such, the apportionment award constituted less than 50 percent of the Veteran's VA benefit. Based on review of the parties reported income and expenses, the Board finds that for the purposes of the July 2008 apportionment decision, hardship existed on the part of the Veteran's spouse and child but not on the part of the Veteran. Thus, the requirements for a special apportionment under 38 C.F.R. § 3.451 were met, and the July 2008 apportionment decision is valid. 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). [Parenthetically, the Board emphasizes that this decision concerns the validity of the July 2008 apportionment decision. The May 2011 apportionment decision will be discussed further in the REMAND section below.] ORDER The July 2008 decision granting a special apportionment of the Veteran's VA compensation benefits was proper; to this extent, the appeal is denied. REMAND As discussed above, a July 2008 decision granted an apportionment of the Veteran's dependent child, K., and spouse, D... In September 2009, K. reached the age of majority and was discontinued from the Veteran's VA benefits and apportionment. In March 2010, the Veteran's divorce was finalized, and D. was discontinued from the Veteran's VA benefits. As such, the prior apportionment was terminated, and the Veteran received VA disability compensation as a single Veteran with no dependents. Subsequently, D. applied to VA for K. to be considered a helpless child. In February 2011, K. was added to the Veteran's VA benefits as a helpless child. D. then applied for a special apportionment of the Veteran's VA benefits on behalf of K. In a May 2011 decision, an apportionment of the Veteran's VA benefits on behalf of his helpless child was granted, effective March 1, 2011. In June 2011, the Veteran submitted a notice of disagreement with the May 2011 decision. As the Veteran has not been provided a statement of the case in response to the June 2011 notice of disagreement, a remand is required for the issuance of a statement of the case on this issue. See Manlicon v. West, 12 Vet. App. 238 (1999). Accordingly, the case is REMANDED for the following action: 1. The RO or the AMC should issue a statement of the case to the appellant and his representative on the issue of whether a May 2011 decision granting a special apportionment of the Veteran's VA compensation benefits was proper. He should also be informed of the requirements to perfect an appeal with respect to this issue. 2. If the Veteran perfects an appeal with respect to this matter, the RO or the AMC should ensure that any indicated development is completed before the case is returned to the Board. The appellant 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). ______________________________________________ DAVID L. WIGHT Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs