Citation Nr: 21010184
Decision Date: 02/24/21	Archive Date: 02/24/21

DOCKET NO. 16-05 806A
DATE: February 24, 2021

REMANDED

Whether the recoupment of separation pay in the amount of $12,953.65 by withholding Department of Veterans Affairs (VA) disability compensation was proper is remanded.

REASONS FOR REMAND

The Veteran served on active duty from August 1997 to November 2007.

This appeal to the Board of Veterans’ Appeals (Board) is from a March 2011 decision by a VA Agency of Original Jurisdiction (AOJ). 

The Veteran testified at a virtual hearing in January 2021 before the undersigned Veterans Law Judge. A transcript of the hearing is of record. 

1. Whether the recoupment of separation pay in the amount of $12,953.65 by withholding VA disability compensation was proper is remanded.

Section 1174 of Title 10, United States Code, directs that an award of VA compensation is subject to recoupment of an amount equal to the total amount of separation, severance or separation benefits received.  See 10 U.S.C. § 1174(h)(2).  Where payment of severance pay was made after September 30, 1996, VA will recoup from disability compensation an amount equal to the total amount of the severance pay less the amount of Federal income tax withheld from such pay.  38 C.F.R. § 3.700(a)(3).   

A December 2014 VA Information Report reflects that the Veteran received gross pay in the amount of $17,271.54 at separation in November 2007. $4,317.89 was withheld in Federal Tax and the Veteran was paid a net amount of $12,953.65 at separation. The Veteran asserts that she was not paid $12,953.65 at separation. Rather, she contends that she was actually paid $9,554.17 (after taxes) at separation. Given the discrepancy in the amount purportedly paid ($12,953.65) compared to the amount the Veteran claims to have been paid ($9,554.17), the Board cannot accurately determine the proper amount of disability compensation to recoup without further development. 

The matter is REMANDED for the following action:

1. The AOJ must contact the Defense Finance and Accounting Service (DFAS) to verify whether net separation pay in the amount of $12,953.65 was ever actually disbursed to the Veteran. Documentation (i.e., copies of pay stubs or other accounting for payments and their components and deductions) that demonstrates an actual disbursement of this net separation pay amount and date of payment (or direct deposit) is required. 

If $12,953.65 was not paid to the Veteran, obtain from DFAS the actual amount of net separation pay disbursed to the Veteran at her service separation. Documentation (i.e., copies of pay stubs or other accounting for payments and their components and deductions) of the net amount of separation pay disbursed to the Veteran and date of payment (or direct deposit) is required.

 

2. The AOJ should request that the Veteran submit bank account statements showing the amount of separation pay deposited to her account and dates of such deposit.

 

 

S. L. Kennedy

Veterans Law Judge

Board of Veterans’ Appeals

Attorney for the Board	G. Jackson

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.