Citation Nr: 1341129 Decision Date: 12/12/13 Archive Date: 12/20/13 DOCKET NO. 11-27 676 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Muskogee, Oklahoma THE ISSUES Whether the recoupment of disability severance pay by withholding VA disability compensation benefits from February 1992 to August 2010 was proper. [The issues of entitlement to higher ratings for limitation of knee flexion or knee extension are the subject of a separate decision.] REPRESENTATION Veteran represented by: Robert C. Brown, Jr., Attorney at Law WITNESS AT HEARING ON APPEAL Veteran ATTORNEY FOR THE BOARD N. L. Northcutt, Counsel INTRODUCTION The Veteran served on active duty from May 1981 to February 1992. These matters are before the Board of Veterans' Appeals (Board) on appeal of a rating decision issued in October 2010 of a Department of Veterans Affairs (VA) Regional Office (RO) in Muskogee, Oklahoma. In February 2012, the Veteran appeared at a hearing before the undersigned Veterans Law Judge. A transcript of the hearing is in the Veteran's file. The Veteran was provided with a statement of the case regarding his claim disputing the propriety of recoupment of disability severance pay by withholding VA disability compensation benefits, but he failed to perfect a timely appeal. However, the issue was certified for appeal, and a notation in the claim file indicates that the RO deemed the October 2011 VA Form 9 as perfecting the appeal. Moreover, during his Board hearing, the Veteran indicated his desire to appeal this issue. As the filing of a timely substantive appeal is not jurisdictional, and VA may elect to waive an appellant's failure to file a timely substantive appeal, the Board elects to exercise jurisdiction of this issue. Percy v. Shinseki, 23 Vet. App. 37 (2009). FINDINGS OF FACT 1. The Veteran received disability severance pay in the amount of $26,756.40 upon his discharge from service in February 1992. 2. Effective February 1992, the Veteran was awarded a 10 percent disability evaluation for his service-connected right knee disability, at which time a portion of the Veteran's disability compensation was withheld for recoupment of the severance pay. 3. The RO ceased withholding severance pay effective August 1, 2010, concluding that the Veteran's 30 percent combined disability evaluation was not dependent on his 10 percent right knee evaluation. CONCLUSION OF LAW The recoupment of disability severance pay by withholding VA disability compensation benefits from February 1992 to August 2010 was proper. 10 U.S.C.A. § 1174 (West 2002 & Supp. 2013); 38 C.F.R. § 3.700 (2013). REASONS AND BASES FOR FINDINGS AND CONCLUSION The pertinent facts in this case are not in dispute and the law is dispositive. Consequently, there is no additional evidence that could be obtained to substantiate the claim, and no further action is required to comply with the Veterans Claims Assistance Act or the implementing regulation. See Manning v. Principi, 16 Vet. App. 534, 542 (2002); VAOPGCPREC 5-2004 (June 23, 2004). Recoupment of Disability Severance Pay A service member who has received separation pay under 10 U.S.C.A. § 1174 , or severance pay or re-adjustment pay under any other provision of law, based on service in the armed forces shall not be deprived, by reason of receipt of such separation pay, severance pay, or re-adjustment pay, of any disability compensation to which he is entitled under the law administered by VA, but there shall be deducted from that disability compensation an amount equal to the total amount of separation pay, severance pay, and re-adjustment pay received. 10 U.S.C.A. § 1174(h)(2) . This statute is implemented by VA in 38 C.F.R. § 3.700(a)(3) which, in pertinent part, states that, "[w]here the disability or disabilities found to be service-connected are the same as those upon which disability severance pay is granted, or where entitlement to disability compensation was established on or after September 15, 1981, an award of compensation will be made subject to recoupment of the disability severance pay." 38 C.F.R. § 3.700(a)(3). When severance pay is made on or before September 30, 1996, as is the case here, "VA will recoup from disability compensation an amount equal to the total amount of the severance pay" without consideration of the amount withheld for Federal income tax. Id. With regard to compensation benefits a veteran is receiving for the disability or disabilities for which severance pay was granted, the regulation provides that "following the initial determination of the degree of disability[,] recoupment shall not be at a monthly rate in excess of the monthly compensable rate payable for that degree of disability." Id. However, the regulations further provide that, where service connection compensation benefits are established on or after September 15, 1981, VA "must recoup from that disability compensation" an amount equal to the severance pay the veteran received. Id. The Veteran received a medical board discharge from service in February 1992 as the result of his service-connected right knee disability. As reflected on his DD Form 214, he received disability separation pay in the amount of $26,756.40. The Veteran was awarded service connection for his right knee disability, evaluated as 10 percent disabling, effective from February 1992, the date of his separation from service. At the time service connection was granted, the Veteran was notified that VA would withhold benefits equal to the amount of separation pay. Subsequent records reflect that the amount of withheld benefits equaled the initial disability evaluation of 10 percent. In March 2011, on its own accord, the RO ceased withholding benefits to recoup the Veteran's disability separation pay effective August 1, 2010, as the Veteran's new combined disability rating of 30 percent, which was based on a number of service-connected connected disabilities, would not be affected by the exclusion of his 10 percent rating for his post-service right knee disability. In other words, he would receive a combined rating of 30 percent with or without this 10 percent right knee rating. As the RO's decision to cease recouping separation pay benefits the Veteran, the propriety of the decision is not a subject of this appeal. With regard to the RO's recoupment of severance pay from February 1992 to August 2010, the law, as written by Congress and implemented by VA regulation, has been correctly applied. The recoupment of the VA compensation in the amount of separation pay received by withholding, in monthly allotments, payments of disability compensation benefits, is required by law. The Board is without authority to grant benefits or preclude withholding them, as a matter of law. See 38 U.S.C.A. § 7104; Harvey v. Brown, 6 Vet. App. 416, 425 (1994). As VA does not have any discretion in the recoupment of the separation pay, the claim lacks legal merit. Sabonis, 6 Vet. App. 426. ORDER The recoupment of disability severance pay by withholding VA disability compensation benefits from February 1992 to August 2010 was proper. ______________________________________________ RONALD W. SCHOLZ Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs