BVA9503625 DOCKET NO. 92-10 091 ) DATE ) ) On appeal from the decision of the Department of Veterans Affairs Regional Office in New Orleans, Louisiana THE ISSUES 1. Whether the appellant may renounce that amount of improved death pension benefits which is paid to her for a dependent of the veteran who is not in her custody. 2. Whether the veteran's son must be considered a dependent in determining the appellant's award of improved death pension benefits. REPRESENTATION Appellant represented by: The American Legion ATTORNEY FOR THE BOARD Susan S. Toth, Associate Counsel INTRODUCTION The veteran had active service from June 1942 to October 1945, and passed away in August 1970. This appeal arises from a March 1992 determination of the Regional Office (RO) which denied the appellant's request to have additional improved pension benefits that are paid to her on account of the veteran's dependent son paid directly to the child. The Board of Veterans' Appeals (Board) remanded the case in August 1993 for further adjudication. The Board submitted a request for an opinion to the office of General Counsel in November 1994. In accordance with 38 C.F.R. § 20.903 (1994), the Board provided the appellant's representative with a copy of the General Counsel's response in January 1995, and provided them with an opportunity to respond. The representative provided additional written argument during that month. CONTENTIONS OF APPELLANT ON APPEAL The appellant contends, in effect, that the RO erred in its determination that her improved death pension benefit could not be reduced without affirmative action by the veteran's dependent son. She asserts that the veteran's son is not in her custody and that her improved death pension award should not include an additional monthly benefit on account of his being the veteran's child. She further asserts that the veteran's son is the one who should receive the benefit of the additional moneys paid to her, and she wishes to have her monthly pension rate payable reduced. DECISION OF THE BOARD The Board, in accordance with the provisions of 38 U.S.C.A. § 7104 (West 1991), has reviewed and considered all of the evidence and material of record in the veteran's claims file. Based on its review of the relevant evidence in this matter, and for the following reasons and bases, it is the decision of the Board that the appellant's claim to renounce a fixed dollar amount of her improved pension benefits lacks legal merit; and that the veteran's son, who is not in the appellant's custody, may not be considered a dependent for purposes of VA improved death pension benefits. FINDINGS OF FACT 1. All relevant evidence necessary for an equitable disposition of the veteran's appeal has been obtained by the RO. 2. The appellant seeks to renounce that fixed dollar amount of improved death pension benefits which is paid to her on account of a child of the veteran who is not in her custody. 3. The veteran's helpless child is not in the appellant's custody. CONCLUSIONS OF LAW 1. The appellant may not renounce a fixed monetary amount of her improved death pension benefits. 38 U.S.C.A. §§ 5107(a), 5306(a) (West 1991); 38 C.F.R. § 3.106(a) (1994). 2. The veteran's son may not be considered a dependent for purposes of determining the appellant's maximum annual rate under the improved death pension benefits program. 38 U.S.C.A. §§ 1541, 5107(a) (West 1991); 38 C.F.R. § 3.23 (1994). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The appellant filed a claim for dependency and indemnity compensation or death pension benefits in September 1970. She indicated that the veteran was married once before, had no children by her and no children out of her custody. Pursuant to rating decision of October 1970, the RO awarded the appellant Section 306 death pension benefits based on the veteran's nonservice-connected death. In November 1970, the veteran's 38 year old child (through his mother) filed a claim for death pension benefits asserting that he was a helpless child. The RO determined in a rating determination of November 1970, that the veteran's child was permanently incapable of self-support before the age of 18 by reason of mental retardation. In February 1971, the appellant's Section 306 death pension benefits were apportioned for the benefit of the veteran's son. The RO notified the appellant in July 1981 that her election to receive improved pension benefits in lieu of Section 306 benefits was effective in March of that year. In an Improved Pension Eligibility Verification Report of January 1992, the appellant requested that all moneys paid to her on account of the veteran's dependent child be sent directly to him. Specifically, she requested that a monthly pension benefit of $413 be paid to her in order that she might qualify for Supplemental Security Income. The RO notified her by letter of March 1992 that the veteran's child did not elect to receive improved pension benefits and therefore remained entitled to a Section 306 monthly pension benefit of $30. It was indicated that her improved pension award, nevertheless, was based on the total amount of dependents. She was also informed that she was not entitled to request apportionment of her benefits on the son's behalf. In order to attain the result she sought, the veteran's son would have to elect improved pension benefits and then seek apportionment of her improved death pension benefits. The appellant has appealed that determination. I. Whether the appellant may renounce the amount of improved death pension benefits payable to her for a dependent of the veteran who is not in her custody and is not supported by her. The appellant may not renounce that fixed dollar amount of improved death pension benefits which would reduce her monthly pension benefit to $413. The applicable criteria provide that any person entitled to pension may renounce his or her right to that benefit but may not renounce less than all of the component items which together comprise the total amount of the benefit to which the person is entitled nor any fixed monetary amounts less than the full amount of entitlement. 38 U.S.C.A. § 5306(a); 38 C.F.R. § 3.106(a). Clearly, the appellant cannot renounce only a fixed portion of her monthly pension benefit payable. Under the governing criteria, she must renounce the full amount of pension payable to her, a course which she has decided not to pursue. As a result, her claim to renounce only a fixed portion of her improved death pension benefits must be denied for lack of legal merit. In that regard, the United States Court of Veterans Appeals has held that in a case where the law is dispositive of the claim, the claim should be denied or the appeal to the Board terminated because of the absence of legal merit or the lack of entitlement under the law. Sabonis v. Brown, 6 Vet.App. 426, 430 (1994). II. Whether the veteran's son must be considered a dependent in determining the appellant's award of improved death pension benefits. Initially, the Board notes that the appellant satisfied the threshold requirement of presenting a well-grounded claim within the meaning of 38 U.S.C.A. § 5107(a). That is, she set forth a claim which was plausible. The panel is also satisfied that all relevant evidence has been properly developed, and that no further assistance is required to comply with the Department of Veterans Affairs' (VA) duty to assist as mandated by 38 U.S.C.A. § 5107(a). In that regard, the panel notes that the Board remanded the case in August 1993 for further adjudication by the RO. The RO was to adjudicate the issue of whether or not the veteran's son should be considered a dependent in determining the appellant's award of improved death pension benefits. The RO issued an administrative decision in October 1993, whereby it was determined that the appellant should be paid at a rate which included a dependent child of the veteran. Section 306 death pension and improved death pension are both monthly benefits payable by the Department of Veterans Affairs to a surviving spouse or child because of a veteran's nonservice- connected death. 38 C.F.R. § 3.3(b)(3); (4). All or any part of the pension payable on account of any veteran may be apportioned. 38 C.F.R. § 3.450(a)(1). Where any of the children of a deceased veteran are not living with the veteran's surviving spouse, the pension otherwise payable to the surviving spouse may be apportioned. 38 U.S.C.A. § 5307(b); 38 C.F.R. § 3.450(a)(2). However, death pension will be apportioned if the child of the deceased veteran is not in the custody of the surviving spouse. 38 C.F.R. § 3.460. The veteran's son received an apportioned share of the appellant's Section 306 death pension benefits dating from February 1971. The appellant asserts that the RO should directly pay to the veteran's son that amount of money which is currently paid to her on account of his being the veteran's dependent. Except as otherwise provided, a person entitled to receive pension under more than one law or section of a law administered by the VA may elect to receive whichever benefit, regardless of whether it is the greater or lesser benefit, even though the election reduces the benefits payable to his or her dependents. An election by a surviving spouse controls the claims of all children including children over 18 and children not in the custody of the surviving spouse. The election of improved pension by a surviving spouse, however, shall not prejudice the rights of any child receiving an apportionment on December 31, 1978. 38 C.F.R. § 3.701(a). A specific claim in the form prescribed by the Secretary must be filed in order for death benefits to be paid or furnished to any individual under the laws administered by the VA. 38 U.S.C.A. § 5101(a). While the appellant elected to receive improved death pension benefits effective in March 1981, the veteran's son chose to continue receiving Section 306 death pension benefits. The appellant may not seek additional apportionment of a portion of her improved death pension benefits on his behalf. In order for the veteran's son to receive monetary benefits under the improved death pension benefits program, he must be the one to file an election. The veteran's son is entitled to either continue receiving the apportioned amount of benefits to which he was entitled while both he and the appellant were receiving Section 306 pension benefits; or he must elect to receive improved death pension benefits. He cannot continue to receive monthly benefits based on the apportionment and then also receive that amount of improved pension benefits which are paid to the appellant due to the son's status as a dependent. The veteran's son would then receive pension benefits under two separate provisions of law which is a practice prohibited by 38 C.F.R. § 3.701(a). It remains to be considered whether or not the veteran's son must be considered a dependent for the purposes of the appellant's improved pension award. 38 U.S.C.A. § 1541(a) provides that the VA shall pay to the surviving spouse of each veteran of a period of war who met the requisite requirements, pension at the rate prescribed by this section, as increased from time to time under § 5312. If no child of the veteran is in the custody of the surviving spouse, improved pension shall be paid to the surviving spouse at a prescribed maximum annual rate for a surviving spouse alone, reduced by the amount of the surviving spouse's annual income. 38 U.S.C.A. § 1541(b); 38 C.F.R. § 3.23(a)(5), (b). If there is a child or children of the veteran in the custody of the surviving spouse, pension shall be paid to the surviving spouse at an increased annual rate, to be reduced by the amount of the surviving spouse's annual income and the annual income of each such child. 38 U.S.C.A. § 1541(c); 38 C.F.R. § 3.23(a)(5). The maximum annual rate for a surviving spouse and one child in his or her custody effective December 1, 1992 was $6,689. 38 U.S.C.A. § 1541(a), 5312(a), (c)(1); 38 C.F.R. § 3.23(a); 57 Fed. Reg. 56,633 (1992). The RO determined that the appellant was entitled to a monthly payment of improved pension benefits of $527. This amount was calculated by dividing $6,689 by 12 months and then reducing the resulting amount by $30. $30 is the amount of Section 306 death pension benefits being withheld from her monthly benefit to pay the veteran's son. The surviving spouse was entitled to the entire maximum annual pension rate since there was no countable annual income. 38 C.F.R. § 3.273. The appellant contends, in effect, that the veteran's son should not be considered a dependent for purposes of determining her maximum annual rate. She further contends, in effect, that the veteran's son is erroneously considered a child of the veteran in her custody for improved death pension benefits purposes. In November 1994, the Board requested an opinion from the General Counsel. In January 1995, the General Counsel provided an opinion as follows: QUESTION PRESENTED: a. Is the Department of Veterans Affairs Adjudication Procedure Manual M21-1, part IV, 20.46b., inconsistent with applicable law and regulation insofar as the manual directs that a surviving spouse's improved- pension award shall reflect the dependency of a child who is not in the surviving spouse's custody, but who receives a protected apportionment of the surviving spouse's pension under section 306 of Public Law No. 95-588? b. If the manual provision is consistent with the law and regulations, must it be applied uniformly regardless of whether it is to the surviving spouse's advantage? COMMENTS: 1. The claimant, the surviving spouse of a deceased wartime veteran, established entitlement to death pension in October 1970. Part of her monthly pension was apportioned to the veteran's child from a previous marriage, who has been adjudged permanently incapable of self-support. The child is not in the custody of the surviving spouse. In 1981, the surviving spouse elected to receive improved pension benefits under the Veteran's and Survivors' Pension Improvement Act of 1978, Pub. L. No. 95-588, 92 Stat. 2497. The child did not make such an election. Under 38 C.F.R. § 3.701(a), the surviving spouse's election of improved pension benefits does not affect the child's right to continue receiving the apportioned amount in effect on December 31, 1978. Pursuant to her election, the surviving spouse was granted improved-pension benefits at the rate prescribed in 38 U.S.C. § 1541(c), which applies "[i]f there is a child of the veteran in the custody of the surviving spouse." The apportionment to the child was continued at the protected rate. 2. The surviving spouse now asserts that her pension should not be paid under section 1541(b), which applies "[i]f no child of the veteran is in the custody of the surviving spouse." She states that the additional pension amount awarded on account of the veteran's child renders her ineligible for Supplemental Security Income. The regional office has concluded that the spouse's improved pension must be paid under section 1541(c). The regional office apparently relied upon a provision in the VA Adjudication Procedure Manual, M21-1, part IV, 20.46 (April 3, 1992), which provides as follows: The election by a surviving spouse also controls the rights of all children in the case except for those children outside the surviving spouse's custody who are receiving an apportioned share of the surviving spouse's Section 306 or Old Law award. a. Child Not in Custody. A surviving spouse's election of Improved Pension will not deprive a child not in the spouse's custody of continued entitlement to receive the same rate of payment which he or she was receiving under Old Law or Section 306 pension. Such a child may elect Improved Pension if it is to the child's advantage. b. Child's Protected Rate Continued. If the protected rate is continued to the children, reflect their dependency in the surviving spouse's award with the additional amount for each child included in determining the surviving spouse's maximum rate payable, with the rebuttable presumption that the children's income is not considered as being available to the surviving spouse, and with the apportioned amount shown as type 1 withholding. The manual provision thus provides that the improved-pension award to a surviving spouse pursuant to an election be paid at the higher rate under section 1541(c) where, as here, there is a child of the veteran who is not in the surviving spouse's custody, but who has a protected entitlement to an apportionment. That requirement is seemingly inconsistent with 38 U.S.C. § 1541, which requires payment of the lesser rate in section 1541(b) when there is no child of the veteran in the custody of the surviving spouse. 3. Where the language of a statute is clear and unambiguous, the statute must be applied according to its plain meaning, unless a straightforward application of the language as written would violate or affect the clear purpose of the statute. See Dameron v. Brodhead, 345 U.S. 322, 326 (1953); see also West Virginia Univ. Hospitals, Inc. v. Casey, 499 U.S. 83, 98- 99 (1991); K Mart Corp. v. Cartier, 486 U.S. 281, 291 (1980). The provisions of section 1541(b) and (c) unambiguously provide that the lesser rate in section 1541(b) is to be paid when there is no child of the veteran in the custody of the surviving spouse, and the higher rate in section 1541(c) is to be paid when there is a child of the veteran in the custody of the surviving spouse. The statute makes no exception for cases involving a surviving spouse's election or a protected apportionment to a child not in the spouse's custody. Rather, section 306 of the Pension Improvement Act provides that all elections of improved pension would be "subject to the terms and conditions in effect with respect to the receipt of such pension." Pub. L. No. 95-588, § 306, 92 Stat. at 2508. Accordingly, once a surviving spouse elects to receive improved pension, pension must be paid in accordance with the current provisions of section 1541, and VA lacks authority to pay the increased statutory rate under section 1541(c) when the veteran's child is not in the surviving spouse's custody. See O.G.C. Prec. 4-92, at 2. 4. Applying 38 U.S.C. §§ 1541(b) and (c) according to their plain meaning would not violate the clear purpose of the Pension Improvement Act. The basic purpose of that statute was "to provide greater assistance to those in need and to remove a number of inconsistencies, anomalies, and problems which prevent the current program from operating in all cases in the equitable manner intended by Congress." H.R. Rep. No.1225, 95th Cong., 2d Sess. 4 (1978). Section 107 of the Pension Improvement Act established higher rates of pension to surviving spouses when children of the veteran were in the surviving spouse' custody. The legislative history indicates that this provision was "aimed at providing a rational, cost-effective system that insures that available tax dollars are applied to those who need it and in proportion to their needs." H.R. Conf. Rep. No. 1225, 95th Cong., 2d Sess., 34 (1978). Under 38 C.F.R. § 3.57(d)(1), a surviving spouse will be considered to have custody of child when the spouse "has the legal right to exercise parental control and responsibility for the welfare and care of the child." Accordingly, consistent with the stated purpose of relating pension to actual need, section 1541(c) limits payment of increased pension to instances where the surviving spouse has responsibility for the welfare and care of the veteran's child, and presumably incurs regular costs in providing such care. 5. We recognize, however, that the straightforward application of that statute to the claimant in the instant case raises additional concerns. Under the old pension law, the surviving spouse's award would be paid at the increased rate whenever there was a child of the veteran, regardless of whether the child was in the surviving spouse's custody. Accordingly, under the old law, the surviving spouse whose pension was subject to apportionment for an out-of- custody child would be receiving an increased pension on account of that child. In contrast, current 38 U.S.C. § 1541 authorizes payment of the increased rate only when the child is in the surviving spouse's custody. However, under current 38 U.S.C. § 1542, a veteran's child who is not in the surviving spouse's custody is entitled to a separate pension in his or her own right. Accordingly, the current statute apparently contemplates that the surviving spouse's award need not be increased on account of an out-of-custody child because that child may receive pension in his or her own right, rather than through apportionment of the surviving spouse's pension. In the instant case, however, the out-of-custody child's apportionment under the old law is protected and must continue to be paid even thought the spouse's improved pension no longer includes the additional statutory amount for a child of the veteran. It may appear inequitable to apportion part of the surviving spouse's pension in favor of the veteran's child when the spouse's pension does not include an additional amount on account of the child. However, for the reasons set forth below, we do not believe that the straightforward application of the statutes and regulations produces a result so inequitable as to justify ignoring the plain language of 38 U.S.C. § 1541(b) and (c). 6. First, nothing in the applicable statutes or regulations clearly indicates that the pension benefit payable to the child must be paid through withholding of the surviving spouse's improved-pension award, rather than as a distinct entitlement payable under prior law and protected under the Pension Improvement Act. Although an apportionment is a derivative benefit, we have previously noted that an apportionment "represents a portion of the primary beneficiary's total entitlement, divested from that beneficiary and vested in the apportionee." O.G.C. Prec. 74-90. Accordingly, an apportionee obtains a legal right to the apportionment, subject to the primary beneficiary's continued entitlement to the underlying benefit. VA regulations at 38 C.F.R. § 3.701 provides that "[t]he election of improved pension by a surviving spouse...shall not prejudice the rights of any child receiving an apportionment on December 31, 1978." This provision might be viewed as essentially freezing the apportionee's rights in place as of December 31, 1978, such that the surviving spouse's election of improved pension destroys the spouse's entitlement to section 306 pension, but does not affect the child's right to receive an apportioned share of the section 306 award. Accordingly, we believe that the statute and regulations would permit the protected pension benefit of the child to be paid as a separate payment under the old law, rather than as a portion of the surviving spouse's improved pension award. 7. We note, however, that the transmittal sheet accompanying the issuance of the pertinent provisions of section 3.701(a) stated that, because a child's apportionment was protected, "a surviving spouse who wishes to elect improved pension must consider the amount of an apportionment in deciding whether receipt of improved pension is advantageous." Trans. Sheet 661, at ii 97-27-79). This would suggest the view that the protected apportionment must be paid through withholding from the surviving spouse's improved-pension rather than as a distinct payment because it would not be necessary to consider the amount of apportionment if the protected apportionment were paid separately from the surviving spouse's improved pension. However, because the transmittal sheet is, by its terms, merely informative and not regulatory, we do not believe it would present a significant obstacle to adoption of the interpretation discussed above. 8. Second, even if the protected apportionment is paid out of the surviving spouse's improved-pension award, we do not believe that paying the rate prescribed in 38 U.S.C. § 1541(b) in this case would produce a result so absurd as to justify disregarding the statutory language. Withholding the protected apportionment for an out-of-custody child from the surviving spouse's monthly payment will result in a decrease in the surviving spouse's benefits, which would not be offset by an increased award for the child under 38 U.S.C. § 1541(c). However, because of the significant differences between improved- pension rates and pension rates under prior law, awarding the spouse the rate under section 1541(c) would result in a substantial and unjustified windfall to the surviving spouse. In the instant case, for example, the protected apportionment amounts to $30 per month, which has been withheld from the surviving spouse's award. However, the difference between the improved-pension rates for a spouse alone and a spouse with one child in custody amounts to approximately $135 per month. See VA Adjudication Procedure Manual M21-1, part I, appendix B. Accordingly, the claimant receives approximately $105 per month above the statutory rate prescribed for surviving spouses with no children of the veteran in their custody, and thus receives a significantly greater amount than similarly-situated surviving spouses in cases not involving protected apportionments. We cannot, therefore, conclude that the procedure described in VA Adjudication Procedure manual M21-1, part IV, 20.46b., is more consistent with the statutory purpose than applying 38 U.S.C. § 1541(b) and (c) according to their plain meanings. 9. Finally, we note that nothing in the statutes or regulations precludes apportionment of a surviving spouse's pension when the spouse is being paid at the rate for a spouse alone under 38 U.S.C. § 1541(b). The Secretary has broad authority under 38 U.S.C. § 5307(b) to apportion a surviving spouse's pension in favor of a veteran's child not in the spouse's custody. VA regulations provide that death pension "will be apportioned if the child or children of the deceased veteran are not in the custody of the surviving spouse." 38 C.F.R. § 3.460. Those statutory and regulatory provisions originated at a time when a surviving spouse's pension award included an additional amount on account of any child of the veteran, whether or not in the spouse's custody. However, they apply by their terms to improved pension as well, and would provide a basis for paying an apportionment to an out-of-custody child even though the surviving spouse's improved pension does not include an additional allowance for that child. 10. For the foregoing reasons, we believe that the provisions of 38 U.S.C. § 1541 must be applied according to their plain meaning. Because the provisions in VA Adjudication Procedures Manual M21-1, part IV, 20.46b. would require payment of the rate in 38 U.S.C. § 1541(c) to a surviving spouse who does not have custody of any children of the veteran, that provision is inconsistent with the plain language of the statute. 11. In view of our conclusion that the manual provision is inconsistent with the statute, the issue raised in your second question, concerning the application of the manual provision, is moot. HELD: a. The provision in VA Adjudication Procedure Manual M21-1, part IV, 20.46b., requiring payment of increased improved- pension to a surviving spouse when a veteran's child not in the spouse's custody receives a protected apportionment, is inconsistent with the provisions of 38 U.S.C. § 1541(b) and (c) which authorize payment of the increased rate only when the veteran's child is in the surviving spouse's custody. b. In view of the holding in paragraph a., above, the second question presented is moot. VA O.G.C. Prec. Op. No. 1-95 (January 4, 1995). The Board is bound by the holding in the General Counsel's opinion, therefore, the veteran's son may not be considered a dependent in this case. Since the veteran's son is not in the appellant's custody, she may not receive extra monetary benefits on account of his dependency status. As such, the appellant must be considered a surviving spouse alone for the purpose of determining the maximum annual rate of improved death pension benefits payable to her. ORDER The appellant's claim to renounce a fixed dollar amount of her improved pension benefits lacks legal merit and is denied. The veteran's son may not be considered a dependent for the purpose of calculating the surviving spouse's improved death pension benefit; to this extent the appeal is granted. C. W. SYMANSKI The Board of Veterans' Appeals Administrative Procedures Improvement Act, Pub. L. No. 103-271, § 6, 108 Stat. 740, ___ (1994), permits a proceeding instituted before the Board to be assigned to an individual member of the Board for a determination. This proceeding has been assigned to an individual member of the Board. NOTICE OF APPELLATE RIGHTS: Under 38 U.S.C.A. § 7266 (West 1991), a decision of the Board of Veterans' Appeals granting less than the complete benefit, or benefits, sought on appeal is appealable to the United States Court of Veterans Appeals within 120 days from the date of mailing of notice of the decision, provided that a Notice of Disagreement concerning an issue which was before the Board was filed with the agency of original jurisdiction on or after November 18, 1988. Veterans' Judicial Review Act, Pub. L. No. 100-687, § 402 (1988). The date which appears on the face of this decision constitutes the date of mailing and the copy of this decision which you have received is your notice of the action taken on your appeal by the Board of Veterans' Appeals.