BVA9504416 
DOCKET NO.  92-10 762     )       DATE
          )
          )

On appeal from the decision of the
Department of Veterans Affairs Regional Office in Honolulu,
Hawaii,
received from the Regional Office in Manila, Philippines

THE ISSUE

Whether the increase of the monthly apportionment from $100 to
$200 of the veteran's compensation on behalf of his children, E.
and M., in the custody of R. F., from May 1, 1990, is warranted.

WITNESS AT HEARINGS ON APPEAL

Appellant

ATTORNEY FOR THE BOARD

P. B. Werdal, Associate Counsel

INTRODUCTION

The veteran served on active duty from April 1944 to July 1944.

This matter came before the Board of Veterans' Appeals (Board) of
the Department of Veterans Affairs (VA) on appeal from a special
apportionment decision dated May 24, 1990, from the Honolulu,
Hawaii, Regional Office (RO).  The veteran's notice of
disagreement was received in June 1990.  The statement of the
case was sent to both the veteran and R. F. in June 1990.  The
veteran's substantive appeal was received in August 1990.

This matter was previously before the Board and was remanded in
February 1994.

The Board notes that R. F. requested an additional increase in
apportionment in April 1993.  That claim was denied by the RO in
a letter dated May 20, 1993.  R. F. submitted a notice of
disagreement regarding that decision in November 1993.  The
statement of the case regarding that issue was sent to her in
June 1994.  To date a substantive appeal regarding that claim has
not been received.  However, the Board observes that the letter
that accompanied the statement of the case sent to R. F. in June
1994 did not inform her of the necessity of filing a substantive
appeal regarding her claim for an increased apportionment.  That
claim is not in appellate status, and the Board refers it to the
RO so that she can be provided with the opportunity to submit a
timely substantive appeal.

CONTENTIONS OF APPELLANT ON APPEAL

The veteran contends he should not have to pay an apportionment
of $100 per month for each of his children in the custody of
R.F., as he cannot afford to make such a payment without
substantial hardship to him and his family.

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 five-volume
basic 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 increase in the monthly
apportionment payable to R. F. on behalf of the veteran's two
minor children in her custody, M. F. and E. F., from $50 per
child to $100 per child per month is warranted.

FINDINGS OF FACT

1.  The veteran is in receipt of compensation benefits based on
his permanent and total disability rating.

2.  R. F. is the custodian of two of the veteran's minor
children, M. F. and E. F.

3.  R. F. currently receives an apportionment in the amount of
$100 per month per child on the children's behalf from the
veteran's VA monthly compensation benefits.  That is the only
source of income for the children, and R. F. supplements that
amount to help meet household expenses by doing household chores
for neighbors.

4.  The veteran does not otherwise regularly contribute to the
support of M. F. and E. F.

5.  The apportioned amount of $100 per child per month is more
than the additional benefit that the veteran currently receives
per dependent child by virtue of having dependent children.

6.  Apportionment of $100 per child per month for M. F. and E. F.
does not result in undue hardship to the veteran.

CONCLUSION OF LAW

Apportionment of the veteran's VA compensation benefits in the
amount of $100 per month per child for M. F. and E. F. to R. F.
from May 1, 1990, is warranted, and does not create undue
hardship on the veteran.  38 U.S.C.A. § 5307(a) (West 1991); 38
C.F.R. §§ 3.450(a)(1)(ii), 3.451, 3.452 (1994).

REASONS AND BASES FOR FINDINGS AND CONCLUSION

The law provides that all or any part of a veteran's compensation
may be apportioned on behalf of his children who are not in his
custody, as prescribed by the Secretary.  38 U.S.C.A. § 5307(a)
(West 1991).  The regulations provide that if the veteran's
children are not residing with him and the veteran is not
reasonably discharging his responsibility for his children's
support, the veteran's compensation benefits may be apportioned
on their behalf.  38 C.F.R. § 3.450 (1994).  The amount of the
apportionment is to be determined based on the facts of the case,
with consideration given to whether undue hardship is present.
In determining the basis for special apportionment, consideration
is given to such factors as the amount of VA benefits payable to
the veteran, the veteran's other sources of income, the other
sources of income available to the recipients of the
apportionment, and the special needs of the veteran, his
dependents, and the apportionees.  Ordinarily, apportionment of
more than 50 percent of the veteran's benefits would constitute
undue hardship for him, while apportioning less than 20 percent
of his benefits would not provide a reasonable benefit for an
apportionee.  38 C.F.R. § 3.451 (1994).  The applicable law
provides that for each child in excess of one, the veteran
receives $54.  38 U.S.C.A. § 1115(1)(B) (West 1991).  Therefore,
for M. F. and E. F. the veteran receives an additional $108 each
month.

The record shows that the veteran has been in receipt of
compensation benefits since separation from active duty, and is
now deemed totally disabled due to his service-connected
disability.  An apportionment of the veteran's service-connected
compensation benefits was previously awarded to R. F., as
custodian of and on behalf of M. F. and E. F.  In September 1989
R. F. requested that the amount be increased from $50 per child
per month.  A field examination was performed in January 1990,
and the examiner reported his conclusion that M. F. and E. F.'s
monthly expenses exceeded the $50 apportionment by $63.63 per
child.  In February 1990 the RO notified the veteran of the RO's
intention to increase the monthly apportionment for each child
from $50 to $100.  In an attempt to dissuade the RO from
increasing the apportionment, the veteran submitted evidence to
prove that to require him to pay the increased apportionment
would cause severe financial hardship for him and his family:  he
reported in March 1990 that he paid $255 for a rental deposit,
and $255 per month for rent.  He said he spent $600 per month for
food, $40 per month for laundry, $25 for toilet and medical
articles, $200 for clothes for two other children, $352 for
clothes for his wife, and a church contribution of approximately
$100 per month.  In addition to those expenses the veteran
reported he had extra expenses incurred incident to his struggle
to obtain custody of his son (not one of the children directly
involved in this claim), and reported attorneys fees of $1,400
paid over the previous few months, and that he had sent $800 to
his wife in the Philippines in January and $200 to her in
February.  He added that he owed $6,000 to American Express, and
that he has no assets.  The Board notes that those expenses, if
accurately reported, are extraordinary and were not recurrent.
At a hearing in December 1990 he submitted an itemization of his
monthly expenses that showed expenses totaling $1,645.  At that
time his VA benefits were $13 less than his expenses.  Effective
May 1, 1990, the apportionment was increased from $50 per month
per child to $100 per month per child.

The field examination performed in January 1990 revealed that R.
F. had no income other than the apportionment she received from
the veteran on the children's behalf.  She submitted a VA Form
21-4138, Statement in Support of Claim, in March 1990 reflecting
monthly expenses of 6,000 pesos, and asking that the
apportionment be increased to $500 per month.  The veteran
reported that he buys shoes and clothing for M. F. and E. F. from
time to time, but did not submit evidence that showed he
regularly contributed to their support.  Since they do not reside
with the veteran and since he does not otherwise contribute to
their support, the Board finds that an apportionment of a share
of his compensation benefits on their behalf is warranted.  In a
letter dated in May 1994, the veteran's monthly VA benefit is
reported as $1,927.

The evidence establishes that the children, M. F. and E. F., in
the custody of R. F., have no other source of income than the
funds apportioned from the veteran's compensation benefits.
Those apportioned funds are their sole source of financial
support.  The veteran has not shown that he and the others
affected suffer financial hardship as the result of the increased
apportionment, and so his claim that the apportionment be reduced
from $100 per month per child for M. F. and E. F. must be denied.
Based on the foregoing, the Board concludes that the payment of
$100 per child per month for M. F. and E. F. from the veteran's
compensation award from May 1, 1990, is warranted, and the appeal
is denied.  38 U.S.C.A. § 5307(a) (West 1991); 38 C.F.R.
§§ 3.450(a)(1)(ii), 3.451, 3.452 (1994).

ORDER

The appeal is denied.

          G.H. SHUFELT
          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.

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.