Citation Nr: 0003231	
Decision Date: 02/09/00    Archive Date: 02/15/00

DOCKET NO.  96-47 521	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Regional Office in Manila, 
Philippines


THE ISSUE

Whether the veteran's minor children, C. and F., are entitled 
to an increased apportioned share of the veteran's disability 
compensation benefits, from $150 to $200.

WITNESS AT HEARING ON APPEAL

Appellant


ATTORNEY FOR THE BOARD

Robin M. Webb, Associate Counsel



INTRODUCTION

The veteran has a recognized period of service as a New 
Philippine Scout from May 1946 to September 1949.

This appeal arises before the Board of Veterans' Appeals 
(Board) from a July 1996 Special Apportionment Decision of 
the Department of Veterans Affairs (VA) Regional Office (RO) 
in Manila, Philippines.  In that decision, the amount of the 
veteran's disability compensation apportioned to his 
children, C. and F., was increased from $150 to $200.  The 
veteran then appealed the increased apportionment.

The Board notes that the veteran's appeal in this instance 
was first before the Board in November 1997.  At that time, 
it was remanded for further development.  Specifically, the 
RO was directed to determine whether two additional children, 
A. and S., could be recognized as dependents of the veteran.  
The RO was also directed to obtain financial status reports 
from both the veteran and the custodian of C. and F.  Review 
of the veteran's claims file indicates that the RO complied 
with the Board's directives, to the extent possible, as 
required by law.  See Stegall v. West, 11 Vet. App. 268 
(1998).  Here, the RO determined that A. and S. were 
dependents of the veteran.  The RO also obtained from the 
veteran a financial status report and statements from the 
custodian of C. and F. as to the continued need of an 
increased apportionment.

Additionally, the Board notes that coincident to the 
veteran's appeal in this instance, the veteran also initiated 
an appeal as to the RO's proposed reductions in his assigned 
disability rating, from 100 percent, to 50 percent, to 30 
percent.  Accordingly, the apportionment to the veteran's 
children, C. and F., was also reduced.  In this respect, the 
record indicates that the attendant reduction in 
apportionment was not a contested issue by either the veteran 
or the custodian of C. and F.  The record also indicates that 
the veteran ultimately prevailed as to the RO's proposed 
reduction in benefits and that his 100 percent disability 
rating was reinstated, effective from the proposed date in 
reduction.  Given that the veteran was returned to the same 
financial status (at least for VA disability compensation 
purposes) for the affected time period, along with the 
absence of any indication that either the veteran or 
custodian contested the amount of the reduced apportionment, 
the Board finds that the issue before it for consideration is 
as framed on the title page of this decision.


FINDINGS OF FACT

1.  All evidence necessary or an equitable disposition of the 
veteran's appeal has been obtained by the RO.

2.  The veteran has established service connection for 
pulmonary tuberculosis and is currently in receipt of a 100 
percent disability rating.

3.  C. and F. do not reside with the veteran.

4.  A $200 apportionment equals 21 percent of the 
compensation benefit payable to the veteran and provides a 
reasonable amount for the veteran's minor children, C. and F.

5.  The record does not demonstrate that an apportionment of 
$200 will result in financial hardship on the part of the 
veteran.


CONCLUSION OF LAW

An increase in the amount of apportionment of the veteran's 
VA disability compensation, from $150 to $200, on behalf of 
his minor children, C. and F., is warranted.  38 U.S.C.A. 
§§ 5107, 5307 (West 1991); 38 C.F.R. §§ 3.450, 3.451 (1999).



REASONS AND BASES FOR FINDINGS AND CONCLUSION

I.  Pertinent Law and Regulations

Applicable law allows for an apportionment of a veteran's 
compensation benefits if the veteran's child is not in his or 
her custody, and the veteran is not reasonably discharging 
his or her responsibility for the child's support.  38 
U.S.C.A. § 5307(a) (West 1991); 38 C.F.R. § 3.450(a)(1)(ii) 
(1999).  However, if a veteran is providing for his or her 
dependents, no apportionment will be made.  38 C.F.R. § 
3.450(c) (1999).  Nevertheless, a veteran's compensation may 
be specially apportioned if hardship is shown to exist on the 
part of the veteran's dependent, as long as such 
apportionment would not cause undue hardship to the veteran.  
38 C.F.R. § 3.451 (1999).

In determining the rate of apportionment, consideration will 
be given to such factors as the amount of VA benefits 
payable, other resources and income of the veteran and of the 
dependent on whose behalf apportionment is claimed, and the 
special needs of the veteran, his or her dependents, and the 
apportionment claimant.  38 C.F.R. §§ 3.451, 3.453 (1999).  
Ordinarily, apportionment of more than 50 percent of the 
veteran's benefits would constitute undue hardship on him or 
her, while apportionment of less than 20 percent of the 
veteran's benefits would not provide a reasonable amount for 
any apportionee.  38 C.F.R. § 3.451 (1999).  A veteran's 
benefits will not be apportioned where the total benefit 
payable to the disabled person does not permit payment of a 
reasonable amount to the apportionee.  38 C.F.R. § 3.458(a) 
(1999).

II.  Factual Background

The record shows that the veteran has established service 
connection for pulmonary tuberculosis.  The record also shows 
that the veteran is currently evaluated as 100 percent 
disabled.

In March 1996, the custodian of C. and F. submitted to the RO 
a request for an increased apportionment, as the present $150 
was not enough for the children's daily needs, especially 
given that one had started school and the other was to start 
in June of that year.  In response to the RO's request for 
additional financial information, the custodian submitted VA 
Form 21-4138 (Statement in Support of Claim), dated in June 
1996, in which she individually listed her monthly expenses.  
When converted from pesos, it was noted that the custodian's 
monthly expenses came to $211.62.  The only source of income 
indicated was the $150 apportionment from the VA.

The veteran, in response to the RO's notification and request 
for additional financial information, also submitted VA Form 
21-4138 (Statement in Support of Claim), dated in June 1996, 
in which he stated that the current $150 apportionment was 
more than enough to meet the needs of C. and F.  The veteran 
indicated that the children were only in public grade school 
and asserted that they did not need any additional money for 
their education and daily needs.  He believed that the 
custodian only requested the increase for herself.  The 
veteran did not provide any of the requested financial 
information.

A July 1996 Special Apportionment Decision allowed the 
custodian's request for an increased apportionment and 
provided for a $200 apportionment, effective April 1996.  
With respect to the veteran, it was noted that he received 
monthly disability compensation of $1,056.50, which included 
additional benefits for an estranged wife and two minor, 
illegitimate children, C. and F.  The veteran's monthly 
expenses were $270.96, which resulted in a net income after 
expenses of $785.54.  It was also noted that the veteran did 
not contribute to the children's support, except for the $150 
apportionment.  With respect to the custodian of C. and F., 
it was noted that the only monthly income she received was 
the VA apportionment.  Her monthly expenses were $211.62, 
which resulted in a negative net income after expenses of 
$61.62.  Both the veteran and the custodian of C. and F. were 
notified of this decision that same month.

The veteran filed a notice of disagreement as to the 
apportionment decision, also in July 1996.  The following 
month, in an August 1996 Statement of the Case, the RO 
provided the veteran with the applicable law and informed him 
that the allowed apportionment would not cause him undue 
hardship but would alleviate C. and F.'s present financial 
hardship.  The RO indicated that even after deducting the 
apportioned amount from the veteran's monthly compensation 
benefits, he would still retain a substantial amount for 
himself.  The veteran then filed a substantive appeal, in 
November 1996.

At his RO hearing (conducted in November 1996), the veteran 
testified that the amount of money his two children received 
was more than enough to take care of their needs.  
(Transcript (T.) at 1).  The veteran also testified that he 
had other children to support.  Id.  The veteran asserted 
that an increased apportionment would be against equity and 
good conscience, as his disability rating was to be reduced 
to 50 percent, effective February 1998.  (T. at 1-2).

In a February 1997 Supplemental Statement of the Case, the RO 
confirmed and continued the increased apportionment, 
effective April 1996, but noted that this amount would be 
reduced in the future, in keeping with the veteran's proposed 
reduced disability rating.

Subsequent to the Board's November 1997 remand, the veteran 
submitted a financial status report.  His December 1997 
report listed his monthly income as $781.75 and his monthly 
expenses as $239.40, leaving a balance of $542.35.  The 
custodian of C. and F. submitted VA Form 21-4138 (Statement 
in Support of Claim), dated in September 1999, in which she 
referenced an earlier statement as to the increased financial 
need of C. and F., now that they were in school.

Also pursuant to the Board's November 1997 remand, the RO, in 
May 1998, determined that A. and S. were also children of the 
veteran.  As such, the RO provided additional disability 
compensation to include A. and S.

An October 1999 Special Apportionment Decision reinstated the 
$200 apportionment, as the veteran's assigned disability 
rating reverted to 100 percent.  It was noted that hardship 
was not shown in this instance, because the veteran would 
still be left with over $11,000 in retroactive benefits for 
himself.

A November 1999 Special Apportionment Decision indicated that 
the veteran was in receipt of additional benefits for his two 
other children, A. and S.  The veteran's monthly income was 
found to be 36,161.93 pesos, as he received 3,500 pesos in 
PVAO annuities and 32,661.93 pesos in VA disability 
compensation.  These amounts were not converted into U.S. 
dollars.  The veteran's reported monthly expense of 1,000 
pesos for educational expenses for A. and S. was discounted, 
as the two children were both preschoolers and could not have 
had such financial needs.  With respect to the custodian of 
C. and F., it was noted that the only income she received was 
from the VA apportionment.  It was determined that a $200 
apportionment would not cause the veteran undue hardship.  
The dependent's in his custody were below seven and did not 
incur as many expenses as school children.  On the other 
hand, C. and F., as a result of the increased apportionment, 
would have more funds to cover other expenses, such as 
clothing and medical expenses.

In a November 1999 Supplemental Statement of the Case, the RO 
reiterated that a $200 apportionment would not cause the 
veteran undue hardship but would surely alleviate C. and F.'s 
present financial predicament.  It was noted that a $200 
apportionment was only 21 percent of the compensation benefit 
payable to the veteran.  It was also noted that A. and S. 
were recognized children of the veteran and that the veteran 
received additional benefits for these children.  Even with 
the apportionment of $200, it was noted that the veteran 
would be left with a substantial income, as he received PVAO 
annuities and was rated as 100 percent disabled for VA 
compensation purposes.  The RO also distinguished between C. 
and F., both of whom were in school, and A. and S., who were 
too young to be in school.  An increased apportionment would 
help C. and F.


III.  Analysis

The Board recognizes the veteran's contention that because he 
has two children in his custody, he cannot afford an 
increased apportionment for C. and F.  The Board also 
recognizes the veteran's contention that the custodian of C. 
and F. only requested the increased apportionment for her own 
use.  However, given the applicable law in this instance and 
the current evidence of record, the Board finds that the 
veteran's appeal must be denied.  C. and F. are entitled to 
an increased apportionment, from $150 to $200.

Here, as to the veteran's contention that he cannot afford an 
increased apportionment because of his other children, the 
Board notes that the veteran currently receives additional 
benefits for A. and S.  As such, VA has provided additional 
financial resources for A. and S., and the veteran does not 
experience a greater cumulative financial loss providing for 
four children rather than two.

As to the veteran's contention that the custodian of C. and 
F. requested the increased apportionment only for her use, 
the Board notes that the veteran presented no evidence other 
than his assertions to support this argument.  Also, review 
of the record shows that the custodian of C. and F. filed her 
request for an increased apportionment coincident to C. and 
F. starting school.  In this regard, the Board finds the 
custodian's request for an increased apportionment in keeping 
with an obvious increase in financial need, i.e., school 
expenses.

Moreover, as discussed above, a veteran's compensation may be 
specially apportioned if hardship is shown to exist on the 
part of the veteran's dependent, as long as such 
apportionment would not cause undue hardship to the veteran.  
See 38 C.F.R. § 3.451.  In determining the rate of 
apportionment, consideration is given to such factors as the 
amount of VA benefits payable, other resources and income of 
the veteran and of the dependent on whose behalf 
apportionment is claimed, and the special needs of the 
veteran, his or her dependents, and the apportionment 
claimant.  See 38 C.F.R. §§ 3.451, 3.453.  Ordinarily, 
apportionment of more than 50 percent of the veteran's 
benefits would constitute undue hardship on the veteran, 
while apportionment of less than 20 percent of the veteran's 
benefits would not provide a reasonable amount for any 
apportionee.  See 38 C.F.R. § 3.451.

In this regard, the Board notes that the veteran is in 
receipt of more than a $1,000 a month in VA disability 
compensation benefits and that he also receives a monthly 
annuity from PVAO.  The Board also notes that the veteran's 
monthly expenses are approximately $240.  With respect to the 
custodian of C. and F., the Board finds that the financial 
status report submitted by her, as well as her various 
statements, consistently indicate a negative net income 
monthly and financial hardship, as well as showing that her 
only source of income is the VA apportionment.  Further, the 
Board reiterates that the custodian of C. and F. requested an 
increased apportionment coincident with C. and F. starting 
school, an obvious additional expense.  Additionally, the 
record indicates that a $200 apportionment equals 21 percent 
of the benefits payable to the veteran.

Therefore, given the facts in this instance and the reasons 
just discussed, the Board finds that the veteran's children, 
C. and F., are entitled to an increased apportionment, from 
$150 to $200.  The custodian of C. and F. experiences 
hardship in providing for them, especially now that they are 
in school.  Further, her financial resources are limited to 
the VA apportionment.  On the other hand, this increased 
amount does not constitute an undue hardship on the veteran, 
given his financial resources and the percentage of the 
apportionment compared to the total benefits received.

As to the veteran's argument made at his RO hearing in 
November 1996 that he could not afford an increased 
apportionment as his benefits were being decreased, the Board 
points out that the apportionment given to his children was 
also decreased, in keeping with a reduction in benefits.  The 
Board also points out that the veteran ultimately prevailed 
regarding the proposed reduction in benefits and that his 100 
percent disability rating was reinstated.



ORDER

Entitlement to an apportionment of the veteran's disability 
compensation, in the amount of $200, for the veteran's 
children, C. and F., is established.  The veteran's appeal is 
denied.



		
	V. L. Jordan
	Member, Board of Veterans' Appeals