The VA Got This Wrong for 79 Years Straight
101st Airborne soldiers observing a valley -Operation Wheeler 1967
It’s not often that a decision comes down that exposes that the VA has been misinterpreting the law for 79 years straight. I know this will come as an absolute shock to you all given the VA’s “flawless” record of interpreting the law and adjudicating claims.
I call it the “Barry bump clause” and this one is going to put a big dent in the VA’s coffers.
For those of you who aren’t familiar, Veterans receiving Special Monthly Compensation (SMC) at the SMC-L through SMC-N rates may be eligible for half or full step bumps to higher levels of SMC if you have additional permanent disabilities independently rated at 50% or 100% that are separate and distinct and involve different anatomical segments or bodily systems from the disability or disabilities that were the basis for the SMC award.
USS Benewah and smaller craft on the My Tho River in 1967
For instance if you were awarded SMC-L and had a separate and distinct permanent disability or combo of disabilities independently rated at 50% you should be bumped up to SMC-L ½. In the same example, if you had a separate 100% permanent disability instead, you would be bumped to SMC-M. If you had both, you should be bumped to SMC-M ½. But that’s not how the VA was doing it.
Since the law was instituted in 1945, the VA had staunchly argued that Veterans who were receiving Special Monthly Compensation at rates L through N were only permitted one bump apiece under 38 CFR §3.350(f)(3) or (f)(4). They even took it a step further, asserting that if you had been awarded aid and attendance for a 100% service-connected condition and had a separate and distinct condition rated at 50% or greater that had granted you a half step bump, and the VA subsequently awarded another 100% condition, you would lose your half step bump under §3.350(f)(3) and it would revert to only a whole step bump under (f)(4).
Downed 9th Infantry Division UH-1 and M113 in 1967
I guess it shouldn’t be surprising, but it’s mind-blowing to me that the VA interpreted the very plain text of the law in that way. Look at it yourself:
From §3.350(f)(3):
(3) Additional independent 50 percent disabilities. In addition to the statutory rates payable under 38 U.S.C. 1114 (l) through (n) and the intermediate or next higher rate provisions outlined above, additional single permanent disability or combinations of permanent disabilities independently ratable at 50 percent or more will afford entitlement to the next higher intermediate rate or if already entitled to an intermediate rate to the next higher statutory rate under 38 U.S.C. 1114, but not above the (o) rate. In the application of this subparagraph the disability or disabilities independently ratable at 50 percent or more must be separate and distinct and involve different anatomical segments or bodily systems from the conditions establishing entitlement under 38 U.S.C. 1114 (l) through (n) or the intermediate rate provisions outlined above. The graduated ratings for arrested tuberculosis will not be utilized in this connection, but the permanent residuals of tuberculosis may be utilized.
101st Airborne Squad moving to setup observation post -Vietnam 1967
§3.350(f)(4):
(4) Additional independent 100 percent ratings. In addition to the statutory rates payable under 38 U.S.C. 1114 (l) through (n) and the intermediate or next higher rate provisions outlined above, additional single permanent disability independently ratable at 100 percent apart from any consideration of individual unemployability will afford entitlement to the next higher statutory rate under 38 U.S.C. 1114 or if already entitled to an intermediate rate to the next higher intermediate rate, but in no event higher than the rate for (o). In the application of this subparagraph the single permanent disability independently ratable at 100 percent must be separate and distinct and involve different anatomical segments or bodily systems from the conditions establishing entitlement under 38 U.S.C. 1114 (l) through (n) or the intermediate rate provisions outlined above.
101st Airborne soldiers crossing creek -Operation Harrison 1966
Here is the critical difference:
(f)(3) says: “additional single permanent disability or combinations of permanent disabilities independently ratable at 50 percent or more.”
Conversely, (f)(4) says: “additional single permanent disability independently ratable at 100 percent.”
In May of 2024, the US Court of Appeals for the Federal Circuit handed down Barry v. McDonough, asserting that the VA’s position was unlawful and smacking some common sense into the VA after 79 years of shafting severely disabled Veterans on this issue.
The Federal Circuit determined that for Veterans who have additional separate and distinct disabilities ratable at 50% or more, that 38 CFR §3.350(f)(3) entitles a Veteran to multiple intermediate-rate SMC increases.
The real interesting part of all this is that it is retroactive as far back as 1945. For those Veterans who should have been receiving these bumps to higher SMC rates all along, Barry v McDonough makes a great basis for filing a Clear and Unmistakable Error (CUE) claim against the VA. That could be quite a retro check for some Veterans.
