MEB'd out with severance at 0 percent, new rating is 50 percent. New claim showing up on benefits for payment recoupment.

So I was discharged via MEB from the Guard for spontaneous pneumothorax with a rating of 0 percent in 2018. I was recently diagnosed with sleep apnea and claimed it as well, and just got the rating of 50 percent, but they lumped it in with spontaneous pneumothorax residuals rather than PTSD, and now I think they will be recouping the severance paid to me. Any insight on this situation? Is there anything I can do or should do?
 
So I was discharged via MEB from the Guard for spontaneous pneumothorax with a rating of 0 percent in 2018. I was recently diagnosed with sleep apnea and claimed it as well, and just got the rating of 50 percent, but they lumped it in with spontaneous pneumothorax residuals rather than PTSD, and now I think they will be recouping the severance paid to me. Any insight on this situation? Is there anything I can do or should do?
Hello @frankengunn

If I understand your situation correctly, you were rated by the DoD at zero percent and separated with disability severance pay. Since then, you filed a claim with the VA and you were awarded 50-percent by the VA. It is unclear whether you currently have an on-going recoupment of severance pay (i.e., started before the new VA award of 50-percent).

Here is some information from the VA regarding recoupment.

M21-1, Part III, Subpart v, Chapter 4, Section B - Recoupment of Separation Benefits



III.v.4.B.3.b. General Policies Regarding Withholdings to Recoup Disability Severance PayGenerally, if a Veteran received disability severance pay, VA must withhold from his/her monthly compensation an amount equal to the monthly compensation payable for the disability(ies) for which the Veteran received disability severance pay. VA continues to withhold this amount until it has recouped the amount specified in M21-1, Part III, Subpart v, 4.B.2.d.

Important:
  • The monthly withholding may never exceed the monthly amount of compensation payable based on the initial, compensable rating, as defined in M21-1, Part III, Subpart v, 4.B.3.c, that VA assigns the severance-pay disability(ies).
  • If a Veteran has multiple, severance-pay disabilities, each rated 0-percent disabling, and VA assigns a 10-percent disability rating to them under 38 CFR 3.324, no withholding is necessary for these disabilities until VA assigns a compensable rating to one or more of them, individually.
  • Withhold the additional benefits payable because of application of the bilateral factor if
    • the initial, compensable rating included application of the bilateral factor, and
    • entitlement to the bilateral factor was based exclusively on severance-pay disabilities.
Ron
 
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No sir I did not have anything recouped after I was released. My initial rating was 0 percent until three years after I was discharged. So if I'm reading this correctly, since my initial rating was 0 percent and I was only given a rating of 30% or higher after I was discharged, they won't recoup?
 
No sir I did not have anything recouped after I was released. My initial rating was 0 percent until three years after I was discharged. So if I'm reading this correctly, since my initial rating was 0 percent and I was only given a rating of 30% or higher after I was discharged, they won't recoup?
Hello @frankengunn

You are going to have to clarify the source of your new rating. I infer that the DOD initially
gave you a zero rating which resulted in disability severance pay.

Did you appeal that rating OR more likely, did the VA give you a 30% or more rating three years later?

Bottom line: Who gave you your recent rating AND is it based on the same disabilities for which you received a DoD rating of zero and severance pay?

Ron
 
The VA gave me the rating based on sleep apnea. According to the documentation they sent, since both sleep apnea and my original 0 percent rated disability of spontaneous pneumothorax are lung conditions, they combined the two, giving me a rating based on the most severe (sleep apnea). Attached is what they sent with the decision letter.
 
The VA gave me the rating based on sleep apnea. According to the documentation they sent, since both sleep apnea and my original 0 percent rated disability of spontaneous pneumothorax are lung conditions, they combined the two, giving me a rating based on the most severe (sleep apnea). Attached is what they sent with the decision letter.
I did not see an attachment.

Based on the info you provided (no VA rating other than zero until recently), you did not have a compensable VA rating until you received the 50% rating for sleep apnea.

Definition: Initial, Compensable Disability Rating​

For the purpose of this section, initial, compensable disability rating means the first disability rating VA assigns to a disability that is 10 percent or higher, except100-percent ratings under 38 CFR 4.28, 4.29, or 4.30.

If VA assigns a compensable disability rating for the first time, and subsequently increases the rating effective the same date it assigned the first one, the very first rating VA assigned is still considered the “initial, compensable disability rating” for the purpose of this section.
If my inferences are accurate, it appears the following wiil apply:
  • The monthly withholding may never exceed the monthly amount of compensation payable based on the initial, compensable rating, as defined in M21-1, Part III, Subpart v, 4.B.3.c, that VA assigns the severance-pay disability(ies).
  • ————
This would result in a recoupment at the 50% VA rate.

You might want to check with the VA on this matter. A veterans service officer could be of assistance. This was a new one for me.

Good luck,
Ron

cc: @Provis @Guardguy11 @chaplaincharlie @Jason Perry
 
My issue is that sleep apnea is secondary to my PTSD/TBI, it doesn't seem right to lump it in with spontaneous pneumothorax. Again it's only under review at the moment, but this is really going to suck if they start garnishing half of my disability.
 
My issue is that sleep apnea is secondary to my PTSD/TBI, it doesn't seem right to lump it in with spontaneous pneumothorax. Again it's only under review at the moment, but this is really going to suck if they start garnishing half of my disability.
Ref: “The monthly withholding may never exceed the monthly amount of compensation payable based on the initial, compensable rating, as defined in M21-1, Part III, Subpart v, 4.B.3.c, that VA assigns the severance-pay disability(ies).”

It would be 100% of the 50% VA rating amount based on the info you provided.

Ron

Edited to add:
I don’t think you mentioned PTSD /TBI previously. Most medical discharges have two separate ratings—one for the DoD unfitting conditions and one for all VA service-connected ratings.

1. What were the unfitting conditions that caused your disability separation (DoD ratings)? Percentage for each please.
2. What were your initial VA ratings for VA compensation (VA Ratings)? Percentage for each please.
 
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Hello @frankengunn

I located one of your posts from four years ago that clarifies matters. Its content follows:


Good morning, all. I've been going through the MEB process for about a month now, having been referred for two spontaneous pneumothoraces (random lung collapse) that occurred while I was on active orders for my Guard unit. LOD and all has been taken care of, and as soon as the Chapter 3 was completed last year I applied for VA benefits. The VA C&P exams gave me a total of 70% for various things, but the actual condition causing my imminent separation was processed at 0% after I conducted a spirometry exam. I understand that since the condition is not chronic, as in it isn't affecting my breathing at all times, that it doesn't rate a percentage, though it is service connected.

My question is this. Since I am receiving VA disability, but do not rate a percentage for the condition causing my MEB referral, when the inevitable decision to medically discharge me with severance pay comes down the pipes (since the condition for which I was referred does not rate a 30% or higher disability), will the VA recoup the severance from my other ratings, or will they recoup only the percentage from the pneumothoraces (so, basically nothing since it's at 0%)?

I want to get a jump start on this, as it will affect whether I agree to severance or not. The untaxable monthly income seems to be more convenient than a taxed lump sum.
[end of old post]
=====================

Current situation.

At the beginning of the current thread, you said: "So I was discharged via MEB from the Guard for spontaneous pneumothorax with a rating of 0 percent in 2018. I was recently diagnosed with sleep apnea and claimed it as well, and just got the rating of 50 percent, but they lumped it in with spontaneous pneumothorax residuals rather than PTSD, and now I think they will be recouping the severance paid to me. Any insight on this situation? Is there anything I can do or should do?"

  • The monthly withholding may never exceed the monthly amount of compensation payable based on the initial, compensable rating, as defined in M21-1, Part III, Subpart v, 4.B.3.c, that VA assigns the severance-pay disability(ies).
  • ————
This would result in a recoupment at the 50% VA rate which is the initial compensable rating for recoupment consideration. It appears that your total VA rating is more than 50% based on the newly discovered information about the previous 70% VA rating from four years ago.

Ron
 
Yes, my original rating for spontaneous pneumothorax was 0 percent. According to eBenefits it is still listed as follows:

residuals of spontaneous pneumothorax (claimed as lung condition)0%Service Connected02/22/2017

The new sleep apnea rating is shown like this:

posttraumatic stress disorder with traumatic brain injury and vertigo70%Service ConnectedPTSD - Combat09/22/2017
> obstructive sleep apnea with residuals of spontaneous pneumothorax50%Service Connected08/23/2021

The 50% is secondary to TBI/PTSD. Will this make a difference in whether they decide to recoup?
 
Yes, my original rating for spontaneous pneumothorax was 0 percent. According to eBenefits it is still listed as follows:

residuals of spontaneous pneumothorax (claimed as lung condition)0%Service Connected02/22/2017

The new sleep apnea rating is shown like this:

posttraumatic stress disorder with traumatic brain injury and vertigo70%Service ConnectedPTSD - Combat09/22/2017
> obstructive sleep apnea with residuals of spontaneous pneumothorax50%Service Connected08/23/2021

The 50% is secondary to TBI/PTSD. Will this make a difference in whether they decide to recoup?
I cannot venture a guess. The original zero DOD rating was based on “pneumothorax “ and a later VA rating mentions the same at different rate.
However, the secondary aspect might have a bearing. Recommend you see a VSO and determine if he/she can offer advice on tge matter.

Ron
 
Everything I've been able to find seems to point to not having a leg to stand on. Regardless, I'm trying to find the silver lining. If they recoup due to this, will I be eligible for retroactive retirement? How does all this get determined?
 
Everything I've been able to find seems to point to not having a leg to stand on. Regardless, I'm trying to find the silver lining. If they recoup due to this, will I be eligible for retroactive retirement? How does all this get determined?
I can think of one consideration for a Chapter 61 retiree with less than 20 years AD.

In order to receive VA compensation, retirees must agree to waive retired pay dollar for dollar in the amount of VA compensation received.

Ron
 
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