Citation Nr: 21039893
Decision Date: 07/01/21	Archive Date: 07/01/21

DOCKET NO. 16-42 859
DATE: July 1, 2021

ORDER

Entitlement to payment of an apportioned share of the Veteran's Department of Veterans Affairs (VA) nonservice-connected pension benefits to his child T. during periods of incarceration is denied.

The overpayment of Department of Veterans Affairs VA pension benefits in the cumulative amount of $16,723.89, was not properly created; the appeal is granted.

FINDINGS OF FACT

1. The annual family income of the Veteran's dependent, T., exceeded the maximum allowable for a spouse of an incarcerated Veteran during the periods of incarceration from April [REDACTED], 2013 through October [REDACTED], 2013, and from September [REDACTED], 2014 through August [REDACTED], 2015.

2. The Regional Office (RO) retroactively terminated the Veteran's pension benefits on the respective 61st days of incarceration which resulted in debts of $2,891.89 and $13,832.00; the cumulative total is $16,723.89.

3. The RO received prompt notification of both incarcerations but did not promptly terminate pension. 

4. The Veteran neither had knowledge of nor should have been aware of the erroneous award of benefits and the error in payment was not due to the Veteran's actions or failure to act.

CONCLUSIONS OF LAW

1. The criteria for entitlement to an apportionment of the incarcerated Veteran's VA pension benefits for T. the periods of incarceration from April [REDACTED], 2013 through October [REDACTED], 2013, and from September [REDACTED], 2014 through August [REDACTED], 2015, have not been met.  38 U.S.C. §§ 5103A, 5107, 5307; 38 C.F.R. §§ 3.450, 3.666.

2. The overpayment of VA pension benefits in the amount of $16,723.89 was not properly created. 38 U.S.C. § 5112; 38 C.F.R. §§ 3.500, 3.666. 

REASONS AND BASES FOR FINDINGS AND CONCLUSIONS

The Veteran had active duty service in the United States Army from January 1973 to January 1976.  In January 2021, an attorney validly filed a VA Form 21-22a.  However, the form limited representation to the issue of "entitlement to VA disability benefits for: hepatitis C."  see also June 2016 & October 2015 VA Forms 21-22a.  Therefore, the Veteran is not currently being represented on the issues currently under appeal.

Apportionment

Pursuant to 38 U.S.C. § 1505, pension benefits administered by the Secretary shall not be paid to or for an individual who has been imprisoned in a Federal, State, or local penal institution because of conviction of a felony or misdemeanor for any part of the period beginning 61 days after such individual's imprisonment begins and ending when such individual's imprisonment ends.  38 U.S.C. § 1505(a); 38 C.F.R. § 3.666.  With regard to the current appeal, the Veteran had two periods of incarceration and the Regional Office (RO) has retroactively terminated the Veteran's pension benefits for those two incarceration dates.  The Veteran was incarcerated from April [REDACTED], 2013 through October [REDACTED], 2013.  The 61st day of that incarceration was June [REDACTED], 2013.  The Veteran was thereafter incarcerated from September [REDACTED], 2014 through August [REDACTED], 2015, with the 61st day occurring on November [REDACTED], 2014.

Special rules govern the apportionment of VA pension benefits payable on account of incarcerated veterans.  Payment may be made to the spouse or child of an incarcerated veteran only if the annual income of the spouse or child is such that death pension would be payable.  38 C.F.R. § 3.666.  Pension is payable at a specified maximum annual pension rate (MAPR), which is reduced on a dollar-for-dollar basis by the amount of the countable annual income.  38 U.S.C. §§ 1521, 1541; 38 C.F.R. §§ 3.3, 3.271, 3.273.  The MAPR is revised every December 1st and is applicable for the following 12-month period.  See 38 U.S.C. §§ 1503, 1521; 38 C.F.R. §§ 3.3, 3.23(b).  Fractions of dollars will be disregarded in computing annual income.  See 38 C.F.R. § 3.271(h).  Some expenses, such as unreimbursed medical expenses that are in excess of five percent of the MAPR may reduce countable income.  The MAPR for a child alone as of December 1, 2012 is $2,129; as of December 1, 2013, is $2,161; as of December 1, 2014, is $2,198.  Five percent of the MAPR for 2013 is $106.45; in 2014 is $108.05; and for 2015 is $109.90.

In this case, for the pertinent time period, the family income for T. was $1,746 per month in wages, so an annual income of $20,952.  Monthly medical expenses were $400 ($4,800 annually divided by 12).  Accordingly, the family income for T. was well above the allowable limit.  Thus, an apportionment of pension is precluded due to excess income.  

Debt

As noted, the pension benefits must be terminated the 61st day of incarceration.  The Veteran was paid pension benefits from April [REDACTED], 2013 through October [REDACTED], 2013.  The 61st day of that incarceration was June [REDACTED], 2013.  The overpayment created for the period of June [REDACTED], 2013 through October [REDACTED], 2013 totals $2,891.89.  For the second incarceration period of September [REDACTED], 2014 through August [REDACTED], 2015, the 61st day was November [REDACTED], 2014.  The debt from November [REDACTED], 2014 to August [REDACTED], 2015 totals $13,832.  The two debts combined total $16,723.89.

The Veteran maintains that he was unaware of payment to him while he was incarceration and he did not cash any payments.

The record shows that in May 2013, the RO was notified that the Veteran was incarcerated.  See VA Form 21-0820.  This notification pre-dated the 61st date of incarceration.  The record also shows that on November 16, 2014, within the same month of the 61st day of incarceration, the Veteran's attorney notified VA of his incarceration.  

The Board has considered whether there was sole administrative error in the payment of the additional benefits for a child in light of the factual history in this case.  Under 38 U.S.C. § 5112(b)(10), the effective date of a reduction or discontinuance of compensation by reason of an erroneous award based solely on administrative error or error in judgment shall be the date of last payment.  See also 38 C.F.R. § 3.500(b)(2).  "Stated another way, when an overpayment has been made by reason of an erroneous award based solely on administrative error, the reduction of that award cannot be made retroactive to form an overpayment debt owed to VA from the recipient of the erroneous award."  Erickson v. West, 13 Vet. App. 495, 499 (2000).  The Board notes, however, that sole administrative error may be found to occur only in cases where the Appellant neither had knowledge of nor should have been aware of the erroneous award.  Further, such error contemplates that neither the Appellant's actions nor his or her failure to act contributed to the erroneous award.  38 U.S.C. § 5112(b)(10); 38 C.F.R. § 3.500(b)(2).  In this case, VA was promptly notified of the Veteran's two incarcerations.  However, action was not promptly taken to terminate the pension benefits.  The Veteran's assertions that he was unaware of the payments is credible as he was incarcerated and was not directly receiving the payments and did not have proper knowledge of them.  

The Board finds that because the overpayment in the cumulative amount of $16,723.89 was the result of sole VA error, it was not properly created and the appeal is granted.  

 

There is no remaining debt to be waived.  

 

MARTHA R. LUBOCH

Acting Veterans Law Judge

Board of Veterans' Appeals

Attorney for the Board	J. Connolly

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.