Roberts: SBP and DIC Offsets and Non-prejudicial Error

Jacqueline S. Roberts v. Robert A McDonald, Case Number 13-1240, decided October 7, 2014 concerns the VAs attempt to offset a DIC award by the amount of SBP benefits a surviving spouse received.

While alive, the veteran had his monthly disability award reduced under the Surviving Benefits Plan (SBP) and after his death, the spouse began to receive SBP payments.  Meanwhile, the spouse also filed a DIC claim  Five years later, DIC was awarded with an effective date of her husband’s death.  Shortly thereafter, the RO was told by the Defense Finance and Accoutning Service that the wife had received approximately $30,000 in SBP payments and the RO decided to withhold that amount from DIC payments (basically withheld the past due DIC benefits) based on 38 C.F.R. Section 3.658.  The spouse appealed.

The Court heard the case and agreed to vacate and remand for a new decision.  By law a survivor cannot receive both SBP and DIC.  However 10 U.S.C. Section 1450 appears to apply to overpayments of SBP, and states a reduction in SBP payment may be made, but not of the DIC.  The statute also allows limited authority for the DoD to recoup SBP payments, but also includes safeguards for the survivor.  The VA conceded to the Court that 38 C.F.R. Section 3.658 did not apply, but argued other statutory and regulatory provisions authorize the VA to deduct SBP payments from a DIC award and therefore there was no prejudicial error.

The Court vacated and remanded for a new decision that takes into account all regulations and statutes.  The Court also rejected the non-prejudicial error argument.  They said the point of a statement of the case as issued by the VA is to give the veteran notice of the authority relied upon and thus give the opportunity to challenge the decision on the correct legal basis or authority.  Id. at *6.

While this case deals with a rather narrow issue, its consideration of non-prejudicial error and rejection of the VA position that failing to address the proper statute or regulation is not important because the point of a Statement of the Case is to give a veteran an opportunity to challenge a decision on the correct legal basis or authority is potentially applicable to a broad number of cases.

Authored by Judge Moorman and joined by C.J. Kasold and Judge Bartley.

Thomas Andrews is an attorney in Columbia, South Carolina.  You can visit his website at http://thomasandrewslaw.com/