Citation Nr: 20003522 Decision Date: 01/16/20 Archive Date: 01/15/20 DOCKET NO. 16-46 343 DATE: January 16, 2020 REMANDED The issue of whether the Department of Veterans Affairs (VA) was correct to withhold retroactive payment of Dependency and Indemnity Compensation (DIC) benefits based on receipt of Department of Defense (DOD) Survivor Benefit Plan (SBP) benefits is remanded. REASONS FOR REMAND The Veteran served on active duty from April 1961 to November 1984. He died in January 1994. The Appellant is his surviving spouse. This matter comes before the Board of Veterans’ Appeals (Board) on appeal from a December 2015 rating decision from the Department of Veterans Affairs (VA) Regional Office (RO). The issue on appeal was previously remanded by the Board in January 2019 and October 2019. In the December 2015 rating decision, the Appellant was awarded DIC. However, $302,188.00 of those benefits were withheld by VA as a result of an overpayment to the Appellant of SBP benefits from DOD. See April 5, 2016 VA Notification Letter; April 5, 2016 VBMS Compensation and Pension Award. The Appellant contends that she should be entitled to concurrent payment of both DIC from VA and payments from SBP. She further asserts that VA failed to afford her the appropriate due process protections by providing her with notice and an opportunity to challenge the indebtedness prior to having retroactive DIC payments withheld and paid to the DOD to offset SBP payments she previously received. SBP is an insurance-style program, administered by DOD, allowing eligible servicemembers and military retirees to elect to have premiums deducted from their pay in order to provide their spouses with additional benefits after their deaths. 10 U.S.C. § 1448 (2006). By contrast, DIC is a separate benefit, administered by VA, which is paid to the surviving beneficiary of a veteran who died while on active duty or as a result of a service-connected disability. 38 U.S.C. §§ 1310 (a), 1318. Here, the appellant was eligible to receive both SBP and DIC benefits for the period beginning February 1, 1994. The SBP benefit scheme has a provision regulating offsets for those who receive both SBP and DIC. This provision calls for reducing SBP payments by the amount the recipient receives in DIC benefits. 10 U.S.C. § 1450 (c)(1). This statute deals with offsetting SBP benefits (from DOD) and not offsetting DIC benefits (from VA). In Roberts v. McDonald, the Court of Appeals for Veterans Claims held that in situations such as this, VA must provide an appellant with notice of the statutes and regulations regarding recoupment of overpayment. Roberts v. McDonald, 27 Vet. App. 108, 110 (2014). In that case, the Court noted that the applicable provisions governing the offset of SBP benefit payments provide a debtor with due process protections, and further require that the military service certify that due process procedures have been followed. See id. at 112-13. The Court in Roberts held that because VA provided the appellant in that case with an Statement of the Case (SOC) that relied on inapplicable regulations as the sole basis for reducing the appellant’s DIC award, the SOC she received did not provide the governing authority under which VA has the authority to act and recoup the asserted overpayment of benefits created through the DOD and, therefore, did not comply with 38 C.F.R. § 19.29 (stating than an SOC must include “a summary of the applicable laws and regulations, with appropriate citations, and a discussion of how such laws and regulations affect the determination”). The Court found that the SOC issued did not put the appellant in that case on notice of the laws and regulations that VA believed were applicable. Id. at 112. Here, the August 2016 SOC did not address the issue of whether the appropriate due process protections were afforded to the appellant before her retroactive DIC benefits were withheld to offset the payment of SBP benefits she received. Moreover, it is unclear from the record whether DOD provided the proper due process protections as required by the applicable regulations. As such, this matter was remanded by the Board in January 2019 for appropriate development and the issuance of an SOC. In October 2019, the Board again remanded the matter as the previous VA adjudications (i. e., the August 2016 SOC and the May 2019 SSOC) did not indicate the governing authority VA is relying upon to offset VA benefits for a DOD overpayment. As such, the issue was remanded so that a SSOC could be issued that placed the Appellant on notice of the laws and regulations that VA believed were applicable. A review of the most recent November 2019 SSOC shows that the AOJ relied on the following governing authority upon which to offset the VA benefit for the DOD overpayment, including: 38 C.F.R. § 3.5, Dependency and indemnity compensation; and 38 C.F.R. § 3.10, Dependency and indemnity compensation rate for a surviving spouse. Notably, these regulations do not provide adequate governing authority under which VA has the authority to act and recoup the asserted overpayment of benefits created through DOD, and therefore the SSOC did not comply with the regulations, notably 38 C.F.R. § 19.29 (2018) (requirements for SOC). As such, there has not been substantial compliance with the Board’s previous remand directives and another remand is required. Stegall v. West, 11 Vet. App. 268, 271 (1998). The Board notes that in Roberts, the Court explained that the VA Secretary relied on 38 U.S.C. § 5314 (West 2014) (“Indebtedness offsets”) and its implementing VA regulation (38 C.F.R. §§ 1.911 (a) and 1.912(a) (2016)), as well as a “Memorandum of Understanding Between the Department of Veterans Affairs and the Department of Defense-Retired Pay and Survivor Annuities” (MOU), which contains provisions concerning DIC and SBP. See Department of Defense Financial Management Regulation 7000.14.R, vol. 7B, app. G, art. I-V (Oct. 2010) (“MOU”). To clarify, on remand, the AOJ must provide the Appellant with a SSOC that satisfied the requirements of 38 C.F.R. § 19.29 (2018). In order to satisfy the requirements of 38 C.F.R. § 19.29, the Appellant must be furnished with a SSOC that addresses, at a minimum, the applicability of 38 U.S.C. § 5314 and 38 C.F.R. §§ 1.911 (a) and 1.912, and any other statutes and/or regulations, to the facts in this case. It should also address the law that authorizes VA to recoup the asserted overpayment on behalf of DOD by reducing the Appellant’s DIC award and any law or regulations governing her ability to request a waiver of this reduction. Specifically, this should include: (1) any applicable, Title 10 or Title 38 provisions; (2) the Memorandum of Understanding Between VA and the DOD - Retired Pay and Survivor Annuities (MOU), DOD 7000.14.R, Volume 7B, Appendix G; DoD Financial Management Regulations governing SBP - Annuities, DOD 7000.14.R, Volume 7B, Chapter 46; and (3) the authority for VA to enter into the MOU as to SBP-DIC offsets that result in a reduction of the DIC award, as well as the relevance of, and any fact-finding pertinent to any other DOD regulation. This SSOC should also include an accounting of how the amount of offset was determined and whether this was found to be an overpayment of DIC benefits or an overpayment of SBP benefits. Although an April 5, 2016 VBMS Compensation and Pension Award print-out sheet notes that the withholding was made to “pay SBP overpayment,” this determination was not provided in the April 2016 notice letter to the Appellant. If an overpayment of DIC benefits was found, the Appellant should be provided with notification of how to request a waiver of overpayment. If an overpayment of SBP benefits was found, the SSOC should address the basis upon which VA determined that this offset was the appropriate method for liquidation of the Appellant’s SBP debt, including whether the annuitant’s written authorization was necessary. The matters are REMANDED for the following actions: 1. The body of this remand should be reviewed in its entirety to aid the AOJ in complying with this directive and to avoid a need for subsequent remands. 2. Provide the Appellant (and her representative) with a SSOC that discusses how applicable laws and regulations affect the determination, including any applicable right to request a waiver of overpayment or other potential recoupment available in response to this offset. 3. The SOC should address the applicability of 38 U.S.C. § 5314 and 38 C.F.R. §§ 1.911 and 1.912, and any other statutes and/or regulations, to the facts in this case. It should also address the law that authorizes VA to recoup the asserted overpayment on behalf of DOD by reducing the Appellant’s DIC award and any law or regulations governing her ability to request a waiver of this reduction. Specifically, this should include any title 10 or title 38 provisions; the Memorandum of Understanding Between VA and the DoD - Retired Pay and Survivor Annuities (MOU), DoD 7000.14.R, Volume 7B, Appendix G; DoD Financial Management Regulations governing SBP - Annuities, DoD 7000.14.R, Volume 7B, Chapter 46; and the authority for VA to enter into the MOU as to SBP-DIC offsets that result in a reduction of the DIC award, as well as the relevance of, and any fact-finding pertinent to any other DoD regulation. 4. The SOC should also include an accounting of how the amount of offset was determined and whether this was found to be an overpayment of DIC benefits or an overpayment of SBP benefits. If an overpayment of DIC benefits was found, the Appellant should be provided with notification of how to request a waiver of overpayment. If an overpayment of SBP benefits was found, the SOC should address the basis upon which VA determined that this offset was the appropriate method for liquidation of the Appellant’s SBP debt, including whether the annuitant’s written authorization was necessary. 5. The Appellant has already perfected her appeal and issuance of this corrected SSOC does not affect this claim’s appellate status. After allowing for an appropriate opportunity to respond, return the case to the Board for appellate consideration. JAMES G. REINHART Veterans Law Judge Board of Veterans’ Appeals Attorney for the Board Department of Veterans Affairs The Board’s decision in this case is binding only with respect to the instant matter decided. This decision is not precedential, and does not establish VA policies or interpretations of general applicability. 38 C.F.R. § 20.1303.