What is VA Apportionment?
Although Congress has done a pretty thorough job of protecting veterans benefits from assignment or garnishing, VA apportionment is one way that Congress specifically allowed this veil to be peirced.
VA disability compensation is not taxable, for example, and it cannot be garnished by a veteran’s creditor or employer.
However, there are certain family members who are entitled to an apportionment – or a split – of a veterans disability compensation or non-service connected pension.
The unique aspect of VA apportionment is that the VA pays the family member directly – without the money ever going through the veteran.
If a person such as a veteran’s estranged spouse, a veteran’s child in the custody of his or her estranged spouse’s, or children who are not living with the veteran (but for whom the veteran is not reasonably contributing support), the VA will take a portion of the veteran’s disability payment and allocate it directly to that individual.
Apportionment of a veterans benefits are authorized by Congress in 38 U.S.C. §5307. The VA has codified regulations enacting those rules at 38 C.F.R. §§3.450 – 3.461.
Who Qualifies for VA Apportionment?
There are several scenarios where the VA will award a family member apportionment of the veterans benefits.
First, if a veteran is incompetent and in the hospital, an institution or a VA domiciliary, the VA will apportion his or her benefits to the spouse, children or dependent parents. 38 C.F.R. §3.450(a)(i).
Second, if a veteran is not living with their spouse, or if the veteran’s children do not reside with the veteran and the veteran is not reasonably supporting their spouse or children, the VA will apportion the veteran’s compensation. 38 C.F.R. § 3.450(a)(ii).
Third, when a veteran has passed away, but their children are not living with a surviving spouse who is receiving a survivor’s pension or Dependency Indemnity Compensation (DIC) the VA may apportion the survivor’s benefits to the veteran’s children. 38 C.F.R. §3.450(a)(2).
When and how will VA apportion veterans benefits?
First, let’s talk about the two types of VA apportionment. Second, we’ll discuss when the VA will NOT apportion a veteran or survivor’s benefits.
There are two types of VA apportionment.
The first is known as “general apportionment.” It is available if the “veteran is not residing with his or her spouse . . . and the veteran is not reasonably discharging his or her responsibility for the spouse’s … support.” 38 C.F.R. §3.450(a)(1)(ii). General apportionment focuses on the degree to which a veteran is supporting their estranged spouse, children, or dependent parents.
The second is known as “special apportionment.” This type of VA apportionment has nothing to do with the veteran’s degree of support to estranged spouse, children or dependent parents. Instead, it turns on a dependent’s showing of hardship.
When the dependent shows a hardship, the VA can “specially apportion” the veteran’s compensation “on the basis of the facts in the individual case as long as it does not cause undue hardship” to another interested persons. 38 C.F.R. §3.451. Ordinarily, apportionment of more than 50-percent of a veterans compensation constitutes and undue hardship, and apportionment less than 20-percent would not provide a reasonable amount to the appointee.
This last point is important because there are several circumstances where the VA will not apportion a veterans compensation. 38 C.F.R. §3.458. The first is where the total amount of veteran’s compensation “does not permit payment of a reasonable amount to any apportionee.” 38 C.F.R. §3.458(a).
There are six other scenarios where the VA will not apportion the veterans benefits, and you can read them at 38 C.F.R. §3.458(b – g).
How does Spousal Separation affect VA apportionment?
In most states, a veteran can get separated without divorcing. In fact, only Delaware, Florida, Georgia, Mississippi, Pennsylvania, and Texas do not recognize or provide a process for a legal separation other than divorce.
However, VA apportionment is independent from a separation agreement. Apportionment is a federal benefit available from the VA to a qualifying dependent. They are not available from the veteran.
This is an important technical consideration.
Take the facts presented in a 2020 Federal Circuit precedential opinion, Batcher v. Wilkie.
In a New York state separation proceeding, a veteran negotiated payment of a one-time $7,000 lump sum to his estranged wife in lieu of any payments of future maintenance and support. While the terms of the separation agreement reached by the veteran and his spouse included the spouse’s waiver of certain payments for additional support, it did not preclude the spouse from seeking apportionment of a veteran’s VA benefits.
The BVA could not determine from the terms of the separation agreement whether the veteran was reasonably discharging his support responsibility, and therefore could not award general apportionment. This case is a good lesson for spouses and children seeking apportionment – knowing what evidence to submit to prove your claim is critical. Most VA appeals are lost not because of a failure of the law, but because of a failure of the evidence submitted by a claimant.
Instead, the BVA determined that the veteran’s estranged spouse had shown a financial hardship because her expenses exceeded her income and she had periods of homelessness. The veteran, by contrast, had not produced any evidence showing a hardship. Therefore the BVA awarded a “special apportionment” based on the competing hardships.
The proper place for the veteran and the estranged spouse to address the issue of VA general apportionment is any separation proceeding or agreement.
However, because the separation agreement in this case did not foreclose the right of the veteran’s spouse to independently seek VA apportionment, the Federal Circuit held that the VA properly permitted a special apportionment. And, because it is focused on hardship and not spousal or child support, a state separation agreement plays no role in a “special apportionment” determination.
How does divorce affect VA Apportionment?
So due to the Uniformed Services Former Spouses’ Protection Act, VA disability compensation is not considered marital property and not subject to division under a state’s property division law.
However, in some states, VA disability compensation may be subject to child support or alimony. You really need to consult with a family lawyer in your state to understand how divorce and separation affects your disability compensation and how it will impact VA apportionment.
It is always the case, however, that apportionment is not automatic. The spouse or dependents must apply for apportionment.
Claiming and appealing a VA Apportionment.
To file a claim for VA apportionment, the person seeking apportionment must file a VA claim for apportionment. That person must fill out and file VA Form 21-0788 (Information Regarding Apportionment of Beneficiary’s Award).
Upon receipt of the claim, the VA will develop evidence to decide the claim. When the VA decides the VA apportionment claim, it will notify both the veteran and the VA apportionment claimant, and possibly other known interested parties. Either the veteran or the apportionment claimant then appeal the VA’s determination
To understand more about how the VA says that it will handle VA apportionment claims, you can click here to see what is written in the VA’s M-21 Manual.
Have questions about VA apportionment? Ask them in the comments, below.
If the question affects a large number of veterans or VA apportionment claimants, I will either answer the question or publish a new post on the topic.
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