BVA9500977 
DOCKET NO.  93-07 825     )       DATE
          )
          )

On appeal from the decision of the
Department of Veterans Affairs Regional Office in St. Petersburg,
Florida

THE ISSUE

Whether the veteran's improved disability pension was properly
terminated effective in February 1989 due to excess family
income.

REPRESENTATION

Appellant represented by: The American Legion

ATTORNEY FOR THE BOARD

R. A. Caffery, Counsel

INTRODUCTION

The veteran served on active duty from December 1944 to November
1946.  This is an appeal from an October 1992 action by the
Department of Veterans Affairs (VA) Regional Office, St.
Petersburg, Florida, which terminated the veteran's award of
improved disability pension effective February 1, 1989, due to
excess family income.  His award was resumed effective
February 1, 1990.

REMAND
The record reflects that the veteran has been in receipt of
improved disability pension benefits for a number of years.  His
spouse, Inez, has been included as a dependent on his awards.

The record further discloses that as of January 1989 the
veteran's award was based on his report that his Social Security
benefits of $5,434 per year constituted the only family income.
Effective in October 1989 the veteran's spouse began receiving
Social Security benefits of $2,628 per year.

In August 1992 the regional office indicated it had received
information from the veteran's spouse that she had had earned
income from Mrs. [redacted] in the amount of $730 and earned
income from [redacted] in the amount of $3,640 in 1989.

The veteran was advised by the regional office in August 1989
that it proposed to terminate his award of improved disability
pension effective in February 1989 due to excessive family income
including the earned income of his spouse.  He was advised that
his payments would not be adjusted for 60 days and that if he
wished he could submit evidence during that time showing that the
adjustment should not be made.  No response was received from the
veteran.

In October 1992 the regional office terminated the veteran's
award of improved disability pension effective February 1, 1989,
due to excessive family income of $9,804 consisting of his Social
Security benefits and his spouse's earnings.  Effective February
1, 1990, his improved disability pension award was resumed based
on the Social Security benefits of himself and his spouse only.

Although, as noted above, the regional office indicated in August
1992 that it had received information from the veteran's spouse
that she had had earned income during 1989, the claims folder
does not contain the actual documentation providing confirmation
of the receipt of that income from either the veteran or his
spouse.

With regard to the fact that the claims folder does not contain
the actual correspondence from the veteran's spouse verifying her
1989 earnings, the Board assumes that this was due to the
regional office's exercise of caution to exclude confidential
income information from the claims folder.  While the Board
understands and commends the regional office in this respect, the
precepts of due process require that some form of the
documentation which provides the basis of the regional office's
determination be included in the record for purposes of appellate
review.  To this end, M21-1, Part IV, Chapter 31, Subchapter IX
(particularly paragraph 31.70), which material was formerly set
out in VBA Circular 20-91-11 (February 22, 1993), now provides
for ways of extracting "sanitized" documentation for inclusion in
the claims folder.

Accordingly, the case is REMANDED for the following action.

The regional office should, in accordance
with the provisions of M21-1, Part IV,
Chapter 31, Subchapter IX, take the
necessary action to extract appropriate
documentation for inclusion in the claims
folder, which documentation supports any
finding that the veteran's spouse was in
receipt of income during the relevant
period.

When the above action has been completed the case should be
reviewed by the regional office.  If the denial is continued the
veteran and his representative should be sent a supplemental
statement of the case and be afforded the appropriate time in
which to respond.  Thereafter, the case should be returned to the
Board for further appellate consideration, if otherwise in order.
No action is required by the veteran unless he receives further
notice.

The purpose of this REMAND is to obtain clarifying information.
The Board intimates no opinion as to the disposition warranted in
this case pending completion of the requested action.

          JAMES R. ANTHONY
          Member, Board of Veterans' Appeals

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.

Under 38 U.S.C.A. § 7252 (West 1991), only a decision of the
Board of Veterans' Appeals is appealable to the United States
Court of Veterans Appeals.  This remand is in the nature of a
preliminary order and does not constitute a decision of the Board
on the merits of your appeal.  38 C.F.R. § 20.1100(b) (1993).