BVA9505844 DOCKET NO. 93-12 099 ) DATE ) ) On appeal from the decision of the Department of Veterans Affairs Regional Office in Seattle, Washington THE ISSUE Whether the veteran's disability compensation should be withheld to recoup his Armed Forces separation pay. REPRESENTATION Appellant represented by: AMVETS ATTORNEY FOR THE BOARD Suzie St. Vil, Associate Counsel INTRODUCTION The record indicates that the veteran served on active duty from June 1976 to November 1982, from December 1984 to February 1988, and from December 1989 to March 1992. He has been represented throughout his appeal by AMVETS. This matter came before the Board of Veterans' Appeals (hereinafter Board) on appeal from action taken by the Seattle, Washington Regional Office (RO) to withhold payment of disability compensation, effective April 1, 1992. By letter dated in October 1992, the veteran was informed that his claim for disability compensation had been approved, but that the award was subject to recoupment of $10,452.33 which represented the separation pay received from the service department. A notice of disagreement with this determination was received in October 1992. The statement of the case was issued in December 1992. The substantive appeal (VA Form 1-9) was received in January 1993. The appeal was received at the Board in June 1993. We note that the service representative has made reference to claims of service connection and increased rating which were addressed in a statement of the case dated in January 1993. However, the Board notes that the claims file does not currently contain a substantive appeal with respect to those issues. Accordingly, those issues have not been properly developed for appellate review and will not be addressed herein. The Board will limit its decision to the issue reflected on the cover page. CONTENTIONS OF APPELLANT ON APPEAL The veteran contends, in effect, that the money he received upon separation should not be recouped, as he received separation pay based on his length of service and was not separated due to disability. The veteran indicates that he had to pay income tax on the separation pay; therefore, he argues that it would be unfair for the VA to recoup the money in question. The veteran asserts that he should not be taxed twice on the same amount of money. 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 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 withholding of the veteran's disability compensation until the Armed Forces separation pay is recouped is proper. FINDINGS OF FACT 1. All relevant evidence necessary for an equitable disposition of the veteran's claim has been obtained by the RO. 2. The veteran served on active from June 1976 to November 1982, from December 1984 to February 1988, and from December 1989 to March 1992; the narrative reason for separation was "Reduction in authorized strength-qualitative early transition program." 3. Upon separation from military service on March 2, 1992, the veteran received separation pay in the amount of $10,452.33. 4. In a rating decision dated October 5, 1992, service connection was granted for residuals, recurrent corneal erosion; a 10 percent rating was assigned. Service connection was also established for residual, left plantar fasciitis; residual, shin splints, tibial stress reaction, bilateral; and residual hemorrhoids, colon polyps; each was assigned a noncompensable disability rating. 5. In a letter dated October 9, 1992, the veteran was informed that his service connected disability benefits would be withheld until the full amount of separation pay which he received in March 1992 from the service department had been recovered. CONCLUSION OF LAW The payment of the veteran's disability compensation is properly withheld until his Armed Forces separation pay of $10,452.33 is recouped. 38 C.F.R. § 3.700(a)(5) (1994). REASONS AND BASES FOR FINDINGS AND CONCLUSION The pertinent facts in this case are not in dispute and may be briefly described. The record reflects that the veteran was released from his third period of active duty in March 1992. His Certificate of Release or Discharge from Active Duty (DD Form 214) indicates that the narrative reason for separation was "Reduction in authorized strength-qualitative early transition program." This form also indicates that the veteran received $10,452.33 in separation pay. In March 1992, the veteran filed an application for benefits with the VA seeking service connection for several disabilities. By rating action of October 1992, the RO granted service connection for residual, recurrent corneal erosion; a 10 percent rating was assigned. Service connection was also established for residual, left plantar fasciitis, residual, shin splints, tibial stress reaction, bilateral, and residual, hemorrhoids, colon polyps; each was assigned a noncompensable disability rating. By letter dated in October 1992, the veteran was informed of his award of service connection and disability compensation. He was also informed that the award was subject to recoupment of the separation pay from the service department. The controlling regulation provides that a veteran who has received separation pay may receive disability compensation for disability incurred in or aggravated by service prior to the date of receipt of separation pay subject to recoupment of the total amount received as separation pay. 38 C.F.R. § 3.700(a)(5)(i) (1994). In this case, the record reflects that the veteran was released from active duty and that he received what the service department described as "separation pay" in the amount of $10,452.33. The above regulation provides for only one exception to the recoupment of separation pay. That is, compensation payable for service-connected disability incurred in or aggravated during a subsequent period of service is not reduced for the purpose of offsetting the separation pay based on a prior period of service. 38 C.F.R. § 3.700(a)(5)(ii) (1994). Such is not the case here. Although the Board has carefully considered the veteran's contentions and is aware of his concerns, the applicable regulation is quite clear and provides that the payment of VA disability compensation is subject to recoupment of the total amount received as "separation pay." Accordingly, there is no legal basis for a finding that the veteran's separation pay is not subject to recoupment. The regulation is binding on both the veteran and the Board, even if its application appears unfair to the veteran. We note that where the law is dispositive, the claim should be denied because of the absence of legal merit. Sabonis v. Brown, 6 Vet.App. 426 (1994). On this record, the law is dispositive. Therefore, the Board has no alternative but to deny the veteran's appeal as the payment of disability compensation is properly being withheld until his Armed Forces separation pay of $10,452.33 is recouped. ORDER The appeal is denied. N. R. ROBIN 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. (CONTINUED ON NEXT PAGE) 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.