Citation Nr: 18155613 Decision Date: 12/04/18 Archive Date: 12/04/18 DOCKET NO. 16-17 163 DATE: December 4, 2018 ORDER The withholding of Department of Veterans Affairs (VA) disability compensation for recoupment of disability severance pay in the amount of $47,337.60, less the amount previously withheld from such pay for a remaining balance in the amount of $41,601.60, was proper and the appeal is denied. [The appeal for the issue of entitlement to service connection for a right knee disorder will be addressed in a separate Board decision.] FINDING OF FACT The Veteran was involuntarily separated from active service in August 1993 and received disability severance pay in the amount of $47,337.60. CONCLUSION OF LAW The withholding of disability compensation benefits beginning in December 2010 to recoup the remaining disability severance pay in the amount of $41,601.60 was proper. 10 U.S.C. § 1174; 38 C.F.R. § 3.700. REASONS AND BASES FOR FINDING AND CONCLUSION The Veteran served on active duty from May 1985 to August 1993. The Veteran’s dispute is with the October 2012 decision to withhold his VA disability compensation benefits to recoup disability severance pay. See 10 U.S.C. § 1174 (separation pay upon involuntary discharge or release from active duty). Notably, where disability severance pay is granted an award of compensation will be made subject to recoupment of the disability severance pay. 38 C.F.R. § 3.700(a)(3) (noting that where payment of severance pay was made on or before September 30, 1996, VA will recoup from disability compensation an amount equal to the total amount of the severance pay). Historically, a July 1993 Physical Evaluation Board report found the Veteran unfit for duty due to low back pain. The Veteran filed a claim for service connection shortly after discharge in August 1993. The Veteran was advised in a September 1994 VA notification letter that his monthly entitlement amount for a service-connected back disability was to be withheld to recoup the amount his service department paid for disability severance. The September 1994 notification letter advised the Veteran that it was important to keep VA informed of any address changes so that his compensation award could be released after recoupment was completed and indicated that VA may require him to report for an examination. He was later notified in July 1996 that his benefits were stopped due to failure to report for an examination. The Veteran filed a new claim for compensation benefits in November 2010 and was advised in the October 2012 VA notification letter in dispute that a portion of his monthly entitlement amount was to be withheld to recoup the remaining balance of the disability severance pay in the amount of $41,601.60. The Veteran disagreed. The Board of Veterans’ Appeals (Board) finds the evidence of record supports a finding that the withholding of VA disability compensation benefits to recoup disability severance pay was proper. Here, the Veteran’s DD Form 214 reports an involuntary discharge for disability with severance pay in the amount of $47,337.60. The record reflects that the severance pay was due to a back disability and the Veteran’s award of disability compensation benefits are based on the same disability. 38 C.F.R. § 3.700(a)(3). Further, there is no dispute that the Veteran was entitled to the disability severance pay or that the remaining balance of disability severance pay at the time service connection was re-established for a back disability in October 2012 was $41,601.60 and the Veteran has not disputed that he received such pay. Rather, he has argued that the full amount of severance pay would have already been repaid but for VA administrative error, which resulted in the closing of his compensation file after he moved in 1995; he contended that he reapplied for compensation benefits in 2010 when he realized the error. However, the Board notes that the issue on appeal is limited to whether the withholding of the Veteran’s disability benefits based on the October 2012 award of compensation benefits is proper and the record does not reflect any timely disagreement with the July 1996 VA notification letter that discontinued the Veteran’s prior compensation benefits; therefore, the July 1996 determination is final and any dispute on whether compensation benefits should have been discontinued at that time is outside the scope of this appeal. See 38 U.S.C. § 7105(c); 38 C.F.R. §§ 3.104, 20.302, 20.1103. Moreover, the Board is bound by the laws and regulations prohibiting receipt of disability compensation for a service-connected disability upon which disability severance pay was granted absent recoupment of such severance pay. 10 U.S.C. § 1174; 38 C.F.R. § 3.700(a)(3); see also Smith v. Derwinski, 2 Vet. App. 429, 432-33 (1992) (“no equities, no matter how compelling, can create a right to payment out of the United States Treasury which has not been provided for by Congress.”). (Continued on the next page) As there simply is no provision of law under which the Board may grant the relief sought by the Veteran in this appeal, the Veteran’s claim must be denied. Nathan Kroes Veterans Law Judge Board of Veterans’ Appeals ATTORNEY FOR THE BOARD A. Odya-Weis, Counsel