Nailos: Earlier Effective Date for A&A When DIC Existed

Nailos v. McDonough, Case Number 19-0517, was decided August 10, 2021 and involves an earlier effective date for DIC based on the need for aid and attendance earlier than the date of the claim for aid and attendance.

The Court noted

This matter was referred to a panel of the Court to determine under what circumstances 38 C.F.R. § 3.402(c)(1) permits an effective date for the award of increased dependency and indemnity compensation (DIC) based on the need for aid and attendance earlier than the date of receipt of the claim for aid and attendance benefits. 3 For the following reasons, the Court concludes that § 3.402(c)(1) does not permit an effective date earlier than the date of the aid and attendance claim unless DIC is in effect for a period prior to the date of the DIC claim, i.e., there is a retroactive award of DIC.

Id. at *1-2.

The surviving spouse applied for DIC and accrued benefits after the veteran’s 2002 death.  This resulted in RO and BVA decisions denying benefits, which were affirmed by the Veteran’s Court in 2004.  Years later, the claim was reopened and resulted in DIC in a 2015 decision with a 2009 effective date.  This resulted in an appeal and denial by the Board. 

In 2017 the surviving spouse submitted an intent to file and a completed aid and attendance form, which led to a grant from the date of the application.  The surviving spouse argued her effective date should have been 2 years prior which corresponds to the date of her accident and inability to care for herself. 

The case focused on 38 CFR Section 3.402(c)(1) which states:

Awards of pension, compensation, or [DIC] to or for a surviving spouse will be effective as follows: . . . . (c) Aid and attendance and housebound benefits. (1) Date of receipt of claim or date entitlement arose[,] whichever is later. However, when an award of [DIC] or pension based on an original or reopened claim is effective for a period prior to date of receipt of the claim, any additional DIC or pension payable to the surviving spouse by reason of need for aid and attendance or housebound status shall also be awarded for any part of the award's retroactive period for which entitlement to the additional benefit is established.

(emphasis added).  The case focused on the “however” sentence which creates an exception to the general effective date rule. 

The Court noted: “appellant asserts that the Court should interpret 38 C.F.R. § 3.402(c)(1) as providing an exception to the general effective date rule when a claimant seeks aid and attendance benefits after having already been awarded DIC and that, under that exception, she is entitled to a retroactive award of aid and attendance benefits prior to the date of her claim for those benefits.”  Id. at *4.

She argued:

the first portion of the "[h]owever" sentence as permitting retroactive aid and attendance benefits "when an award of [DIC] . . . based on an original or reopened claim is effective for a period prior to date of receipt of the [aid and attendance] claim." 38 C.F.R. § 3.402(c)(1) (modified to reflect the appellant's proffered interpretation); see Appellant's Br. at 7. If the regulation is read otherwise, she avers, it would govern an "impossible scenario" because DIC may be paid retroactively if the claim is received within 1 year of the veteran's death and a DIC claim could not be "reopened" during that 1-year period.

Id. at *5.

The Court read the text of the section and determined

Starting with the triggering event, the regulation refers to a "claim" and then to "the claim."  The first use explains what led to an award of DIC—"an original or reopened claim"—and thus is a reference to the DIC claim. Id. (emphasis added). When "the claim" then appears 11 words later, it reasonably is understood as referring to the "claim" that was just mentioned—the DIC claim.

Id. at *9.

The Court reasoned:

Although the appellant instead looks to the phrase "[d]ate of receipt of claim" in the general rule to conclude that "the claim" in the exception refers to a claim for aid and attendance, because "the claim" appears later in the same clause of the same sentence that discusses a DIC claim, it should be read as referring back to that more immediate use of claim, rather than a farther removed use in a different sentence.

Id. at *10.  The Court summarized:

Putting all this together, the meaning of the regulation is clear from its text and structure: "[W]hen an award of [DIC] . . . based on an original or reopened claim is effective for a period prior to date of receipt of the [DIC] claim, any additional DIC . . . payable to the surviving spouse by reason of need for aid and attendance . . . shall also be awarded for any part of the [DIC] award's retroactive period for which entitlement to the additional benefit is established." That means, if DIC has not been awarded for a period prior to the date of the DIC claim—and there is thus no retroactive period—the exception in (c)(1) simply does not apply.

Id. at *12.

The Court also looked at the legislative history of the section and found it supported its conclusion. 

Judge Greenberg dissented, arguing:

Claimants are presumed to be seeking the maximum benefits, but that presumption is overcome by the widow merely checking the wrong box on a DIC application. "The VA disability compensation system is not a trap for the unwary," Comer v. Peake, 552 F.3d 1362, 1369 (Fed. Cir. 2009), yet today the majority has allowed the widow of a Pearl Harbor survivor to be ensnared by VA's maze-creating forms.

Id. at *18.

This is a case where the Court focused on the plain language and secondarily the legislative history and reached a reading different from either the veteran or Secretary.  It appears to be a hard result for the surviving spouse and it will be interesting to see if it is appealed.

Decision by Judge Meredith and joined in by Judge Toth with dissent by Judge Greenberg.

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