Court Affirms That VA Benefits Are Calculated From the Date When You File Your Claim - For Now

Court Affirms That VA Benefits Are Calculated From the Date When You File Your Claim - For Now
Mitch Wright West & Dunn student associate Mitch Wright discusses the impact of the Federal Circuit’s recent decision in Arellano v. McDonough. Mr. Wright is a Student Associate at West & Dunn and third-year law student at the University of Wisconsin - Madison.
On June 17, 2021, the United States Court of Appeals for the Federal Circuit decided a case titled Arellano v. McDonough. The main question of the case was whether Mr. Arellano, who applied for benefits from the Department of Veterans Affairs (“VA”) thirty years after separation from service, can calculate disability benefits starting on the date of separation. The court unanimously answered no, but split evenly 6-6 on its reasoning.

Six judges determined that if the veteran applies for disability benefits more than one year after separating from service, the veteran can only calculate benefits from the date he or she submitted a claim and not from the separation date. The other six judges would have held that the one-year deadline is more flexible and can be extended in difficult circumstances, allowing calculation of benefits back to the date of separation. However, these six judges believed that Mr. Arellano’s case did not present a circumstance justifying extension of the one-year deadline.

Background

Adolfo Arellano is a Navy veteran. He served honorably from 1977 to 1981. In 1980, he was almost crushed while working on the flight deck of an aircraft carrier and was swept overboard. Since then, he has lived with a severe post-traumatic stress disorder and has been cared for by his brother. On June 3, 2011, thirty years after his separation from service, he applied for disability benefits. VA granted him benefits and assigned him a 100% disability rating.

Notably, VA calculated his benefits effective from June 3, 2011 – the date he filed his claim. Mr. Arellano appealed, arguing that his complete mental disability prevented him from filing his claim earlier. He argued that VA should have calculated his benefits from 1981 – the date he separated from service and was already suffering from his mental conditions. On appeal, both the Board of Veterans Appeals (the “Board”) and Court of Appeals for Veterans Claims (the “Veterans Court”) disagreed with Mr. Arellano, denied his appeal, and kept his effective date as June 3, 2011.

Setting the Effective Date

The effective date for a veteran’s disability benefits is the date from which VA calculates the amount of benefits due to the veteran. This date depends on two provisions of the United States Code in 38 U.S.C. § 5110. Section 5110(a)(1) states that the default effective date is the date on which VA receives the veteran’s application for disability benefits. However, section 5110(b)(1) grants a one-year grace period following a veteran’s separation or discharge from service. In light of the way these sections work together, VA will set the effective date as the day after the veteran separates from service if the veteran files the benefits claim within one year from separation or discharge.

Section 5110(b) also allows the one-year grace period if the veteran experiences one of the situations listed in the statute, such as an increase in the severity of a disability, permanent and total disability, death of a spouse, or correction of military records. Importantly, however, once one year passes following the veteran’s separation or discharge from service, none of the provisions of section 5110(b) apply, and the agency will assign an effective date to be the date on which the veteran filed the application for benefits.

Nevertheless, courts can make exceptions to some filing deadlines when some extraordinary circumstance prevented a person from filing in time. For example, if the veteran is tricked into filing something too late, or if she filed something in time but her papers were defective for some technical reason, the court may still allow the veteran to file the document on time or fix her papers. These kinds of extensions of deadlines are generally known as “equitable tolling.” In Mr. Arellano’s case, the court tackled the question: Can a court “equitably toll” the one-year filing deadline set by section 5110(b) if the veteran experienced some extraordinary hardship?

The rule prior to Mr. Arellon’s case was established in a case from 2003 called Andrews v. Principi. In Andrews, the court held that the one-year filing deadline established by section 5110(b)’s cannot be extended, even in the case of extenuating circumstances. If a veteran files an application for benefits later than one year after separating from service, the effective date will be the date of the application for benefits – no exceptions.

Mr. Arellano challenged Andrews, arguing that his complete mental disability is the very circumstance that prevented him from filing his application for benefits within the one-year time limit after separating from the Navy. Had he not been suffering from the service-connected condition, he argued, he would have filed his application back in 1981, and would have been receiving benefits since that time. But, due to his condition, he was prevented from filing his application, and was unfairly denied thirty years of benefits, only receiving benefits from 2011 going forward. He argued that courts should be able to extend the one-year deadline in extreme circumstances such as his.

Arellano v. McDonough - The Ruling

The Federal Circuit unanimously ruled against him. All twelve judges agreed that Mr. Arellano cannot receive the benefit of equitable tolling, and as a result the effective date of his benefits award remains June 3, 2011. However, the judges split evenly 6-6 as to why.

Six judges voted to uphold Andrews and held that section 5110(b)’s one-year deadline cannot be extended by equitable tolling. Specifically, they argued that because the one-year deadline does not eliminate the possibility of veteran benefits (it merely shifts the effective date to the date the veteran filed the application), it is not a typical statute of limitations and therefore cannot be equitably tolled under the ruling in Andrews. Thus, they argued, a court could not extend 5110(b)’s one-year filing deadline, even if they wanted to.

The other six judges voted to overturn Andrews and hold that section 5110(b) does allow for equitable tolling of the deadline because it creates a one-year deadline that, if the veteran misses, cuts off disability benefits for any time before the veteran files the application. However, these judges ultimately found that Mr. Arellano could not benefit from an equitable extension of the deadline because Mr. Arellano had been cared for by his brother since his separation from the Navy in 1981, and his brother could have filed his claim for him at that time, or at any time between 1981 and 2011.

Under either point of view, both camps of judges found that Mr. Arellano filed too late–his effective date needed to remain set in 2011. Ultimately, although the Federal Circuit found against Mr. Arellano, the Supreme Court may be willing to hear his case due to the 6-6 judge split on the Andrews issue (i.e. whether section 5110(b)’s one-year deadline can be equitably tolled in the first place).

What this Means for Your VA Benefits Claim

The Federal Circuit did not overrule Andrews, which means that unless and until the Supreme Court hears Mr. Arellano’s case, section 5110(b)’s one-year deadline remains firm. If you separate or are discharged from military service and want VA to calculate your disability benefits from that date, you have one year from the date of your separation to file your claim. If that one-year deadline has passed, your benefits can only start, at the earliest, on the day you file your claim.

There are, however, other legal tools available to challenge the effective date or disability rating assigned to you by VA. The attorneys at West & Dunn have years of experience and success challenging VA disability decisions, and have been able to obtain benefits and compensation for veterans previously denied by VA. If you or a family member want help appealing your claim, challenging a VA decision, or have other questions related to seeking VA benefits, please feel free to call us at (608) 490-9449 or contact us online.

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