Citation NR: 9634605 Decision Date: 12/05/96 Archive Date: 12/13/96 DOCKET NO. 95-21 757 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Baltimore, Maryland THE ISSUE Whether the veteran’s income is excessive for the payment of nonservice connected pension benefits to include the question of whether amounts garnished from the veteran’s Social Security benefits for the veteran’s separated wife is countable as income. REPRESENTATION Appellant represented by: Maryland Veterans' Service Commission ATTORNEY FOR THE BOARD Debbie A. Riffe, Associate Counsel INTRODUCTION The veteran had active service from December 1943 to May 1946. This appeal arises from a November 1994 administrative determination of the Baltimore, Maryland Regional Office (RO), whereby the veteran’s application for nonservice connected pension benefits was denied on the basis that his income exceeded the maximum allowable rate established by VA laws and regulations. CONTENTIONS OF APPELLANT ON APPEAL The veteran contends that the RO erred when it denied his application for nonservice connected pension benefits on account of excessive income. Specifically, he claims that he actually received only $571 per month of the $971 that he was entitled for Social Security benefits because $400 per month is garnished for his wife from whom he is separated. The veteran requests that he be considered as a single veteran and that his entitlement to pension be determined on the basis of what he actually received in income from Social Security, to the exclusion of the garnishment. DECISION OF THE BOARD The Board, in accordance with the provisions of 38 U.S.C.A. § 7104 (West 1991 & Supp. 1995), 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 veteran’s claim that the garnishment of Social Security benefits for his separated wife should not be considered as countable income in determining his entitlement to nonservice connected pension benefits lacks legal merit. FINDINGS OF FACT 1. In March 1995, the Social Security Administration verified that the veteran’s total monthly award of Security benefits was $971, from which there was a $400 garnishment for his spouse; in a March 1995 letter, the veteran affirmed the total monthly award and the garnishment amount. 3. By letter in November 1994, the RO notified the veteran that his application for nonservice connected pension benefits was denied on the basis that his income exceeded the maximum allowable annual limit. CONCLUSION OF LAW The veteran’s countable annual income, to include the amount garnished from his Social Security benefits for his separated wife, is in excess of the maximum amount allowable for payment of nonservice connected pension benefits. 38 U.S.C.A. § 1521(a),(c) (West 1991); 38 C.F.R. §§ 3.3(a), 3.23, 3.271, 3.272 (1995). REASONS AND BASES FOR FINDINGS AND CONCLUSION In November 1994, the veteran submitted a claim for nonservice connected pension benefits in the form of an Improved Pension Eligibility Report (EVR). He reported that he was married and not living with his spouse, and that he contributed $4,800 toward his spouse’s support during the last year. He indicated that his only income consisted of $544 per month from Social Security. By letter in November 1994, the RO notified the veteran that his application for nonservice connected pension benefits was denied on the basis that his income exceeded the maximum allowable annual limit. The RO stated that it considered the garnishment paid to his wife as countable income. A March 1995 Report of Contact form indicates that the Social Security Administration (SSA) verified that the veteran’s total benefits amounted to $971, that there was a garnishment of $400 for his spouse since 1988, and that the veteran’s gross amount of benefits was $571. In a March 1995 notice of disagreement, the veteran indicated that he actually received only $571 of his Social Security benefits due to a $400 garnishment for his wife, who lived in California. He indicated that the garnishment was effected by a California court order in 1988. He stated that he had no contact with his wife and did not know if his wife had any other income. The veteran requested that the RO consider him as a single veteran and consider his income based on what he actually received from Social Security and not the full amount of his entitlement. He added that he had made numerous attempts to obtain a divorce but that he was blocked by his wife. The veteran submitted a computer generated form from the SSA which reflected that he was credited with $571 in monthly gross benefits effective in December 1994 and before that was due $544 in monthly benefits. Under the applicable regulations, nonservice connected pension is a benefit payable by the VA to veterans of a period of war because of disability. Basic entitlement exists if, among other things, the veteran’s income is not in excess of the applicable maximum pension rate specified in 38 C.F.R. § 3.23, and the pension rate is increased in situations where the veteran has a dependent. 38 U.S.C.A. § 1521(a),(c); 38 C.F.R. § 3.3(a)(3) (1995). Nonservice connected pension benefits shall be paid at the maximum annual rate reduced by the amount of annual income received by the veteran and spouse. 38 U.S.C.A. § 1521(c); 38 C.F.R. §§ 3.3(a)(3)(vi), 3.23(a), (b), (d)(4). Effective December 1993, the maximum annual rate of nonservice connected disability pension for a veteran with a spouse was $10,240; effective December 1994, the maximum annual rate was $10,527. 38 C.F.R. § 3.23(a). Payments of any kind from any source shall be counted as income during the 12-month annualization period in which received unless specifically excluded. 38 C.F.R. § 3.271(a). In determining annual income, all payments of any kind or from any source shall be counted as income during the 12- month annualization period in which received unless specifically excluded under 38 C.F.R. § 3.272. 38 C.F.R. § 3.271(a). Recurring income, received or anticipated in equal amounts and at regular intervals such as weekly, monthly, quarterly and which will continue throughout an entire 12- month annualization period, will be counted as income during the 12-month annualization period in which it is received or anticipated. 38 C.F.R. § 3.271(a)(1). The exclusions from countable income, as set forth in 38 C.F.R. § 3.272, include the following: welfare, maintenance, VA pension benefits, reimbursement for casualty loss, profits realized from a property sale, joint accounts, unreimbursed medical expenses, expenses of last illnesses/burials/just debts, educational expenses, certain portion of a child’s income, Domestic Volunteer Service Act program payments, distribution of funds under 38 U.S.C.A. § 1718, hardship exclusion of child’s available income, survivor benefit annuity paid by the Department of Defense, Agent Orange settlement payments, restitution to individuals of Japanese ancestry, the portion of proceeds from the cash surrender of a life insurance policy which represents a return of insurance premiums, income received by American Indian beneficiaries from trust or restricted lands, Radiation Exposure Compensation Act payments, and Alaska Native Claims Settlement Act payments. Moreover, VA Adjudication Procedure Manual, M21-1, Part IV § 16.02(g)(2),(3) provides If there is garnishment of a payee’s Social Security or involuntary withholding from a payee’s Social Security check due to legal action initiated by a third party, the entire benefit is countable as IVAP [income for VA purposes] even though it may never be received by the beneficiary...If there is garnishment of Social Security or involuntary withholding due to legal action initiated by a third party, it is as if the beneficiary had received the benefits and used the funds to pay a creditor. In this case, the law is very clear and leaves no alternative but to consider the garnishment of the veteran’s Social Security benefits for his wife as income in determining his entitlement to pension benefits. In computing income, payment of any kind from any source will be counted as income unless specifically excluded under 38 C.F.R. § 3.272. A review of the provisions of § 3.272 does not show that the veteran’s income meets any of the specified exclusions. Additionally, M21-1, Part IV § 16.02(g)(2), which provides guidance regarding garnishment of Social Security benefits, states that the entire benefit is countable as income for VA purposes, regardless if the veteran actually received it. While M21-1 is not regulatory, the cited provision from M21-1 is consistent with the regulatory requirements. The veteran’s representative argued that the computer generated form from the SSA, submitted in March 1995, showed that there was a $400 drop in the veteran’s gross Social Security benefits in December 1994 which brought him within the appropriate income limits. While it is true that the SSA form reflects that the veteran was credited with gross benefits of $944 in June 1994 and $571 in December 1994, the form also shows that prior to December 1994 the veteran’s due amount was $544. The form merely did not reference the garnishment for the veteran’s spouse which had been in effect since 1988, as subsequently verified by the SSA in March 1995. The veteran argued that he should be considered as a single veteran. This contention is not material since the amounts garnished for spousal support would still be countable as income; thus the veteran’s status as single or married would have no bearing on the ultimate decision warranted in this case. 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 because of lack of entitlement under the law. Sabonis v. Brown, 6 Vet.App. 426, 430 (1994). In this case, since garnishment of the veteran’s Social Security benefits is not listed as a specific exclusion, it must be concluded that the garnishment of $400 from the veteran’s income for his separated spouse is countable as income for the purpose of determining the veteran’s nonservice connected pension entitlement. ORDER The veteran’s countable income to include amounts garnished from his Social Security benefits is excessive for the payment of nonservice connected disability pension; therefore, his appeal is denied. C.W. SYMANSKI Member, Board of Veterans' Appeals The Board of Veterans' Appeals Administrative Procedures Improvement Act, Pub. L. No. 103-271, § 6, 108 Stat. 740, 741 (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 & Supp. 1995), 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, 102 Stat. 4105, 4122 (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. - 2 -