Citation Nr: 0006354 Decision Date: 03/09/00 Archive Date: 03/17/00 DOCKET NO. 98-08 028 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Columbia, South Carolina THE ISSUE Entitlement to an earlier effective date for the exclusion of children's income due to hardship. REPRESENTATION Appellant represented by: The American Legion WITNESS AT HEARING ON APPEAL Appellant ATTORNEY FOR THE BOARD H. Roberts, Counsel INTRODUCTION The veteran served on active duty from October 1970 to June 1971. This appeal arises before the Board of Veterans' Appeals (Board) from an April 1998 decision of the Columbia, South Carolina, Regional Office (RO) of the Department of Veterans Affairs (VA), which granted an exclusion of children's income due to hardship and assigned an effective date for that exclusion of January 1, 1997, but assigned a date for commencement of payments of the increased benefits of February 1, 1997. FINDINGS OF FACT 1. The veteran is in receipt of nonservice-connected pension, the rate of which prior to January 1, 1997, was determined using his children's income as countable income. 2. There is no communication of record prior to January 20, 1998, which could constitute a claim, formal or informal, of entitlement to a hardship exclusion from countable income for his children's income. CONCLUSION OF LAW The criteria for entitlement to an earlier effective date for the exclusion of children's income due to hardship are not met. 38 U.S.C.A. §§ 501, 5107, 5110, 5111 (West 1991); 38 C.F.R. §§ 3.23, 3.31, 3.272, 3.400, 3.660 (1999). REASONS AND BASES FOR FINDINGS AND CONCLUSION The veteran contends that he is entitled to an earlier effective date for the exclusion of children's income due to hardship. After a review of the record, the Board finds that the veteran's contentions are not supported by the evidence, and his claim is denied. The veteran established entitlement to payment of a nonservice-connected pension by means of a September 1993 rating decision. On January 20, 1998, VA received a VA Form 21-0571, Application for Exclusion of Children's Income. The Board notes that a veteran's annual rate of pension is determined using his annual income. The veteran's annual income includes the veteran's annual income, the annual income of the veteran's dependent spouse, and the annual income of each child of the veteran (other than a child for whom increased pension is not payable under 38 U.S.C. § 1522(b)) in the veteran's custody or to whose support the veteran is reasonably contributing (to the extent such child's income is reasonably available to or for the veteran, unless in the judgment of VA to do so would work a hardship on the veteran). There is a rebuttable presumption that all of such a child's income is reasonably available to or for the veteran. 38 C.F.R. § 3.23(d)(4) (1999). For the purposes of 38 C.F.R. § 3.23(d)(4), a child's income shall be considered "reasonably available" when it can be readily applied to meet the veteran's or surviving spouse's expenses necessary for reasonable family maintenance, and "hardship" shall be held to exist when annual expenses necessary for reasonable family maintenance exceed the sum of countable annual income plus VA pension entitlement. Expenses necessary for reasonable family maintenance include expenses for basic necessities (such as food, clothing, shelter, etc.) and other expenses, determined on a case-by- case basis, which are necessary to support a reasonable quality of life. 38 C.F.R. § 3.23(d)(6) (1999). The regulations also provide that the some income shall be excluded from countable income for the purpose of determining entitlement to improved pension. Unless otherwise provided, the exclusions deductible are deductible only during the 12- month annualization period in which they were paid. 38 C.F.R. § 3.272 (1999). When hardship is established under the provisions of 38 C.F.R. § 3.23(d)(6), there shall be excluded from the available income of any child or children an amount equal to the amount by which annual expenses necessary for reasonable family maintenance exceed the sum of countable annual income plus VA pension entitlement computed without consideration of this exclusion. The amount of this exclusion shall not exceed the available income of any child or children, and annual expenses necessary for reasonable family maintenance shall not include any expenses which were considered in determining the available income of the child or children or the countable annual income of the veteran or surviving spouse. 38 C.F.R. § 3.272(m) (1999). In the veteran's initial application for a nonservice- connected pension, the veteran did not claim entitlement to a hardship exclusion for his children's income. Additionally, in subsequent contact with the VA the veteran did not claim entitlement to a hardship exclusion for his children's income prior to the receipt of his January 20, 1998. There is no communication of record prior to January 20, 1998, which could constitute a claim, formal or informal, of entitlement to a hardship exclusion for his children's income. The regulatory provisions regarding effective dates provide that except as otherwise provided, the effective date of an evaluation and award of pension based on an original claim, a claim reopened after final disallowance, or a claim for increase will be the date of receipt of the claim or the date entitlement arose, whichever is the later. 38 C.F.R. § 3.400 (1999). Where pension was paid at a lower rate for a particular 12- month annualization period based on anticipated or actual income, benefits otherwise payable may be authorized commencing the first of a 12-month annualization period as provided in 38 C.F.R. § 3.660. Otherwise, benefits may not be authorized for any period prior to the date of receipt of a new claim. Where payments were made at a lower rate because of anticipated income, pension may be awarded or increased in accordance with the facts found but not earlier than the beginning of the appropriate 12-month annualization period if satisfactory evidence is received within the same or the next calendar year. 38 C.F.R. § 3.660(b)(1) (1999). Regardless of VA regulations concerning effective dates of awards, and except as provided in 38 C.F.R. § 3.31(c), payment of monetary benefits based on original, reopened, or increased awards of pension may not be made for any period prior to the first day of the calendar month following the month in which the award or increased award became effective. 38 C.F.R. § 3.31 (1999); 38 U.S.C.A. § 5111 (West 1991). Increased award for this purpose means an award which is increased because of an added dependent, increased in disability or disability rating, or reduction in income. 38 C.F.R. § 3.31(a) (1999). The Board notes that 38 C.F.R. § 3.31(c) lists a variety of exceptions which are not applicable in the present case. The Board notes that for the period in question, the veteran's 12-month annualization period for payment of pension was the calendar year, running from January 1 to December 31. The veteran's claim of entitlement to a hardship exclusion of his children's income from his countable income was received January 20, 1998. Therefore, pursuant to the effective date provisions found in 38 C.F.R. § 3.660, the earliest possible effective date is January 1, 1997. As the claim was received in the calendar year of 1998, it may only date back to January 1, 1997, as the effective date is fixed at the beginning of a 12-month annualization cycle (a calendar year in this case) if the evidence is received in that year or the next year. Since the claim was received in 1998, the effective date may not go back to January 1, 1996, as the claim would need to have been submitted by December 31, 1997, in order to go back to the previous 12-month annualization cycle. However, the regulatory provisions of 38 C.F.R. § 3.31 apply regardless of any effective date provisions and thus supersede the provisions found in 38 C.F.R. § 3.660 regarding effective dates. That regulation, 38 C.F.R. § 3.31, provides that payment of monetary benefits based on increased awards of pension may not be made for any period prior to the first day of the calendar month following the month in which the increased award became effective. The veteran's rate of pension was increased, effective January 1, 1997, based upon reduced income because of the hardship exclusion of his children's income. Because the basis of the increased award was a reduction in the veteran's income, the provisions of 38 C.F.R. § 3.31 apply. Therefore, payment of monetary benefits based on that increased award may not be paid for any period prior to the first day of the calendar month (February) following the month in which the increased award became effective (January). Thus, the appropriate date of payment of monetary benefits based on the increased award is February 1, 1997, while the appropriate effective date for the reduction in income due to the hardship exclusion of the children's income from countable income is January 1, 1997. The veteran, at his September 1998 hearing, argued that VA failed to properly inform him of the possibility of acquiring a hardship exclusion of his children's income from his countable income or he would have requested an exclusion with his original claim for benefits if he had been properly advised in the completion of his application. However, the Board notes that where a claimant has relied upon advice from a VA official, the remedy for breach of any obligation to provide accurate information about eligibility cannot involve payment of benefits where statutory eligibility requirements for those benefits are not met. Harvey v. Brown, 6 Vet. App. 416, 424 (1994). Here, the eligibility requirement for the exclusion of the children's income from the veteran's countable income were not met as the veteran had not filed a claim for that hardship exclusion. Accordingly, the Board finds that the criteria for entitlement to an earlier effective date for the exclusion of children's income due to hardship are not met and the veteran's claim therefor is denied. 38 U.S.C.A. §§ 501, 5107, 5110, 5111 (West 1991); 38 C.F.R. §§ 3.23, 3.31, 3.272, 3.400, 3.660 (1999). ORDER Entitlement to an earlier effective date for the exclusion of children's income due to hardship is denied. M. W. GREENSTREET Member, Board of Veterans' Appeals