Court Opinion

ID: 4663821
Source: CourtListenerOpinion
Date Created: 2021-03-01 19:01:14.323024+00
Date Added: 2024-06-11T08:02:31.543317
License: Public Domain

UNITED STATES COURT OF APPEALS FOR VETERANS CLAIMS

                                           No. 19-2009

                               ROBERT E. COOPER, JR., APPELLANT,

                                                V.

                                   DENIS MCDONOUGH,
                         SECRETARY OF VETERANS AFFAIRS, APPELLEE.

                         On Appeal from the Board of Veterans' Appeals

                                   (Decided February 26, 2021)

       Christopher F. Attig, of Little Rock, Arkansas, was on the brief for the appellant.

      William A. Hudson, Jr., Acting General Counsel; Mary Ann Flynn, Chief Counsel; Kenneth
A. Walsh, Deputy Chief Counsel; and Jessica K. Grunberg, Senior Appellate Attorney, all of
Washington, D.C., were on the brief for the appellee.

       Before PIETSCH, MEREDITH, and TOTH, Judges.

       MEREDITH, Judge, filed the opinion of the Court. TOTH, Judge, filed an opinion
concurring in part and in the judgment.

       MEREDITH, Judge: The appellant, Robert E. Cooper, Jr., through counsel appeals a
February 26, 2019, Board of Veterans' Appeals (Board) decision that denied his request to exclude
state unemployment compensation from his total countable income for purposes of calculating the
amount of his non-service-connected (NSC) pension. Record (R.) at 4-11. This appeal is timely,
and the Court has jurisdiction to review the Board's decision pursuant to 38 U.S.C. §§ 7252(a) and
7266(a). This matter was referred to a panel of the Court to determine whether the exclusion of
"donations from public or private relief or welfare organizations" from countable income for NSC
pension purposes in 38 U.S.C. § 1503(a)(1) requires VA to exclude state unemployment
compensation from countable income. For the following reasons, the Court answers that question
in the negative and will thus affirm the Board's decision.

                                       I. BACKGROUND
       The appellant served on active duty in the U.S. Marine Corps from March to September
1972, R. at 770-71, and from February to April 1973, R. at 768-69. A VA pension management
center (PMC) granted entitlement to NSC pension in October 2008. R. at 507-18. In July 2013, the
appellant notified VA that he was in receipt of Social Security Disability Insurance, R. at 364-66,
and, in October 2013, the PMC reduced his monthly NSC pension payment, R. at 355-59. VA also
created an overpayment but later waived the debt. R. at 341, 354.
        In 2014, VA notified the appellant that it adjusted his countable income from December
2008 through 2010 based on his collection of unemployment compensation from the state of
Wisconsin and that, as a result, VA had overpaid him $13,094. R. at 308-13, 331; see R. at 342.
The appellant disagreed with VA's creation of the overpayment and requested a waiver of the debt.1
R. at 282-88, 324. The PMC clarified in a December 2014 letter to the appellant that the
overpayment was not due to the compensation he received based on his participation in a VA
Compensated Work Therapy (CWT) program in 2008, but rather the state unemployment
compensation that he collected in 2010 and requested that he clarify the issue with which he
disagreed. R. at 278-79. The appellant responded that he did not believe his state unemployment
compensation should be counted as income. R. at 277. Specifically, he asserted that, because the
wages he received prior to collecting unemployment compensation were obtained through the
CWT program and are not countable as income, the unemployment compensation he received after
ending that employment also should not count towards income. Id. After the PMC issued a
Statement of the Case, in which it concluded that unemployment income was countable income
for NSC pension purposes and that the overpayment was properly created, R. at 164-200, the
appellant perfected his appeal to the Board, R. at 151, 156-58.
        The Board issued the decision on appeal in February 2019, denying the appellant's request
to exclude unemployment compensation from his total countable income for purposes of NSC
pension. R. at 4-11. First, the Board found that, contrary to the appellant's argument, VA had not
counted payments from his participation in the CWT program as income for NSC pension
purposes. R. at 8. Next, the Board found that, unlike CWT wages, "there is no applicable exclusion
[in 38 C.F.R. § 3.272] for [unemployment compensation] from the [appellant's] countable income"
for NSC pension purposes and therefore his request to exclude such income must be denied. Id.
This appeal followed.

       1
         The Court notes that the issue of waiver of the appellant's debt based on his receipt of unemployment
compensation remains pending before VA. See Secretary's Brief (Br.) at 3.

                                                      2
                                         II. ANALYSIS
                                    A. The Parties' Arguments
       The appellant contends that, because state unemployment compensation is "public relief
for the unemployed," it constitutes a donation from public relief or welfare organizations and is
thus excluded from countable income under 38 U.S.C. § 1503(a)(1). Appellant's Br. at 4; id. at
5-16; Reply Br. at 1-14. He further asserts that, based on a harmonious reading of section 1503
and 38 U.S.C. § 1718(g)(3), which provides an exclusion from income for payments received as a
result of participation in VA's CWT program, it follows that unemployment compensation should
be excluded from countable income. Appellant's Br. at 11-15. He avers that any other reading
would lead to an absurd result and he asks the Court to reverse the Board's decision. Id. at 14, 16.
       The Secretary argues that the Court's decision in Walker v. Brown, 8 Vet.App. 356, 358
(1995), controls the outcome here because the Court in Walker established that "there is 'nothing
ambiguous'" about the language of section 1503(a), which includes all payments except for those
specifically enumerated. Secretary's Br. at 6 (quoting Walker, 8 Vet.App. at 358); see id. at 6-7.
He further asserts that unemployment compensation is not synonymous with welfare; not all
tax-funded benefits should be considered donations from a public relief organization, especially
given that some Social Security benefits are included as countable income; and Congress could
have specifically excluded unemployment compensation, but it did not. Id. at 8-10. Regarding
Congress's specific exclusion of CWT income, the Secretary contends that CWT is not an
unemployment benefit but rather a "'clinical vocational rehabilitation program'" that is designed to
promote employment opportunities for veterans. Id. at 11 (quoting Compensated Work Therapy,
VETERANS HEALTH ADMIN., https://www.va.gov/health/cwt/ (last visited Mar. 11, 2020)). The
Secretary avers that the appellant has not shown that it would be absurd or irrational to treat
unemployment compensation and CWT wages differently, and therefore, the Secretary urges the
Court to affirm the Board's February 2019 decision. Id. at 7-13.
                                       B. Legal Landscape
       A veteran may be entitled to NSC pension if he or she served during a period of war (or
was discharged or released from service during a period of war for a service-connected disability),
meets specific income and net worth criteria, and is permanently and totally disabled due to
non-service-connected disabilities and not due to his or her own willful misconduct. 38 U.S.C.
§ 1521(a), (j); 38 C.F.R. § 3.3(a)(3) (2020). The maximum annual rate of pension is "reduced by

                                                 3
the amount of the veteran's annual income." 38 U.S.C. § 1521(b), (c). Generally, "all payments of
any kind or from any source" are included when calculating the veteran's income, but certain
categories of payments are specifically excluded from that calculation. 38 U.S.C. § 1503(a).
         "The legislative history of [38 U.S.C. § 1503]2 makes it clear that Congress sought to limit
the availability of pension benefits to those who were truly needy" and that,"[i]f a person could
obtain income from any other source, he would have to do so before qualifying for pension
benefits." Peed v. Cleland, 516 F. Supp. 469, 475 (1981). "The Joint Explanatory Statement
prepared by the House and Senate Committees on Veterans' Affairs that accompanied the
conference report on [the Veterans' and Survivors' Pension Improvement Act of 1978,] Public Law
95–588[,] stated:
         Both the House bill and the Senate amendment restructure the
         non-service-connected pension program for needy wartime veterans who are
         permanently disabled and totally disabled from non-service-connected causes or
         age 65 and over and the needy survivors of wartime veterans.
         Under both the House bill and the Senate amendment, the restructuring replaces the
         present method of determining the veteran's or surviving spouse's pension amount
         by using a maximum monthly rate, reduced by other income of the veteran or
         surviving spouse according to rate-decrement income limitation formulae. Under
         both the House bill and the Senate amendment, there would be a maximum annual
         rate, reduced dollar for dollar by the other income of the pensioner, including
         generally, the income of all family members for whom additional pension is paid;
         and fewer allowable exclusions from other income would be permitted than under
         the current program."
Johnson v. Brown, 9 Vet.App. 369, 373 (1996) (quoting Joint Explanatory Statement, Pub. L. No.
95–588, 95th Cong., 2d Sess. (1978) (emphasis added), reprinted in 1978 U.S.C.C.A.N. 5583,
5703).
                                     C. Statutory Interpretation
         This case presents a question of statutory interpretation. The statute at issue, 38 U.S.C.
§ 1503, provides that, when calculating annual income for purposes of NSC pension, "all payments
of any kind or from any source . . . shall be included except" for those forms of payment specified
in subsections 1503(a)(1) through 1503(a)(12). 38 U.S.C. § 1503(a). Among the exclusions from
countable income referred to in section 1503(a) is "donations from public or private relief or

         2
           In 1991, Congress renumbered 38 U.S.C. § 503 as section 1503. Department of Veterans Affairs
Codification Act, Pub. L. No. 102-83, § 5(a), 105 Stat. 378, 406 (1991).

                                                  4
welfare organizations." 38 U.S.C. § 1503(a)(1). The Secretary's implementing regulations mirror
the relevant portions of the statute. See 38 C.F.R. § 3.271(a) (2020) ("Payments of any kind from
any source shall be counted as income during the 12-month annualization period in which received
unless specifically excluded under § 3.272."); 38 C.F.R. § 3.272(a) (2020) (excluding from
countable income "[d]onations from public or private relief, welfare, or charitable organizations").
       At the outset, we acknowledge two issues relevant to our discussion. First, the United States
Court of Appeals for the Federal Circuit (Federal Circuit) dealt with a similar provision in the
context of federal income tax in Abrahamsen v. United States, 228 F.3d 1360, 1362 (Fed. Cir.
2000). There, former employees argued that their receipt of exit-incentive payments should not
fall within the tax code's definition of "'gross income,'" defined as "'all income from whatever
source derived.'" Id. (quoting 26 U.S.C. § 61(a)) (emphasis added). Rather, like here, the assertion
was that the payments should fall within an enumerated exclusionary provision. Id. The Federal
Circuit began its analysis by noting that the definition of gross income is "extraordinarily broad"
and that the Supreme Court has "'emphasized the corollary to § 61(a)'s broad construction, namely,
the default rule of statutory interpretation that exclusions from income must be narrowly
construed.'" Id. at 1362-63 (quoting Comm'r v. Schleier, 515 U.S. 323, 328 (1995)). The Federal
Circuit ultimately concluded that the exit-incentive payments did not fall within the narrow
exclusion for payments received "'on account of personal injuries or [physical] sickness.'"
Abrahamsen, 228 F.3d at 1363 (quoting Schleier, 515 U.S. at 337). The principles announced in
Abrahamsen are instructive for purposes of construing the provision at issue here, which broadly
includes "all payments" in income, subject to enumerated exceptions. 38 U.S.C. § 1503(a).
       Second, in Walker, this Court found "nothing ambiguous about the meaning of" the
provision that "'all payments of any kind or from any source . . . shall be included,' with the
exception of certain enumerated categories." 8 Vet.App. at 358 (quoting 38 U.S.C. § 1503(a)).
There, the Court concluded that payments from the total disability income provision of a National
Service Life Insurance policy were countable as income for NSC pension purposes because these
payments are not listed as one of the enumerated exclusions. Walker, 8 Vet.App. at 358. The Court
essentially reiterated the same principle in Johnson, by holding that "the plain meaning of [section
1503 and §§ 3.271, 3.272] require[] that . . . payments [under the Minimum Income Widow
provision of a Survivor Benefit Plan, an annuity from the Department of Navy,] be included as

                                                 5
annual income and that the appropriate deductions be made" because no specific exclusion for
such payments existed. 9 Vet.App. at 372.
       However, the Court in Walker and Johnson considered only whether the specific types of
income at issue were countable and offered little in the way of additional statutory interpretation.
The appellant's contention here is that, although unemployment compensation is not specifically
enumerated, these payments should nonetheless be excluded from countable income because
unemployment compensation falls within the meaning of "donations from public or private relief
or welfare organizations." 38 U.S.C. § 1503(a)(1); see Appellant's Br. at 5-16. Because Walker
and Johnson make clear that all payments are included as countable income unless specifically
excluded, the Court must determine whether, narrowly construed, unemployment compensation
falls within section 1503(a)(1)'s exclusion.
                    1. Donations from Public Relief or Welfare Organizations
       "When a statute is at issue, we begin with the statutory language." McGee v. Peake,
511 F.3d 1352, 1356 (Fed. Cir. 2008); see Williams v. Taylor, 529 U.S. 420, 431 (2000). "The
statute's plain meaning is derived from its text and its structure." McGee, 511 F.3d at 1356; see
Gardner v. Derwinski, 1 Vet.App. 584, 586 (1991) ("Determining a statute's plain meaning
requires examining the specific language at issue and the overall structure of the statute."), aff'd
sub nom. Gardner v. Brown, 5 F.3d 1456 (Fed. Cir. 1993), aff'd, 513 U.S. 115 (1994). The "plain
meaning must be given effect unless a 'literal application of [the] statute will produce a result
demonstrably at odds with the intention of its drafters.'" Gardner, 1 Vet.App. at 586-87 (quoting
Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571 (1982)); see Roper v. Nicholson,
20 Vet.App. 173, 180 (2006), aff'd, 240 F. App'x 422 (Fed. Cir. 2007).
       The first question in statutory interpretation is always "whether Congress has directly
spoken to the precise question at issue." Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc.,
467 U.S. 837, 842 (1984). "If the intent of Congress is clear, that is the end of the matter; for the
court, as well as the agency, must give effect to the unambiguously expressed intent of Congress."
Id. at 842-43. The interpretation of a statute is a question of law that the Court reviews de novo,
without deference to the Board's interpretation. See Butts v. Brown, 5 Vet.App. 532, 539 (1993)
(en banc).
       Neither party disputes that "unemployment compensation" is not explicitly enumerated in
section 1503. As noted above, the appellant avers that it should nonetheless be excluded from

                                                 6
annual income because unemployment compensation is a "donation[] from public . . . relief or
welfare organizations," which is an enumerated exclusion. 38 U.S.C. § 1503(a)(1); see Appellant's
Br. at 5-16; Reply Br. at 1-14. Because there are no statutory or regulatory definitions of the terms
used in section 1503(a)(1), the Court may assume that the words take on their "'ordinary,
contemporary, common meaning,'" which may be derived from general use dictionaries. Sandifer
v. U.S. Steel Corp., 571 U.S. 220, 227 (2014) (quoting Perrin v. United States, 444 U.S. 37, 42
(1979)).
       A "donation" is variously defined as "an act or instance of presenting something as a gift,
grant, or contribution," RANDOM HOUSE WEBSTER'S UNABRIDGED DICTIONARY 582 (2d ed. 2001)
[hereinafter WEBSTER'S]; "a gift, esp[ecially] to a charity; something, esp[ecially] money, that
someone gives to a person or an organization by way of help," BLACK'S LAW DICTIONARY 617
(11th ed. 2019) [hereinafter BLACK'S]; or "something that is given to a charity, esp[ecially] a sum
of money," NEW OXFORD AMERICAN DICTIONARY 515 (3d ed. 2010) [hereinafter OXFORD].
Further, Black's defines a "gift" as a "voluntary transfer of property to another without
compensation." 3 BLACK'S at 831. In other words, the plain language of the statute pertains to
voluntary gifts of, typically, money from one party to another and often involves a charity.
       Next, section 1503(a)(1) requires that the donation be received from public or private relief
or welfare organizations. 38 U.S.C. § 1503(a)(1). "Public" means "of, pertaining to, or affecting a
population or a community as a whole," and "of, pertaining to, or being in the service of a
community or nation, esp[ecially] as a government officer." WEBSTER'S at 1562-63; accord
BLACK'S at 1483 (defining "public" as "[o]f, relating to, or involving an entire community, state,
or country"). The noun it modifies—"relief"—means "aid or assistance given to those in need;
esp[ecially], financial aid provided by the state." BLACK'S at 1544 (emphasis added). For these
purposes, "welfare" means "financial or other assistance to an individual or family from a city,
state, or national government." WEBSTER'S at 2157; see BLACK'S at 1910 (defining "welfare" as
"[a] system of social insurance providing assistance to those who are financially in need, as by
providing food stamps and family allowances[;] . . . [a]lso termed (historically) poor relief; state
benefit; (BrE) income support" (emphasis added)). And, finally, an "organization" is "[a] group
that has formed for a particular purpose." BLACK'S at 1326.

       3
           As a verb, a "gift" is "[a] thing so transferred." BLACK'S at 831.

                                                            7
       Taken together, the plain meaning of "public . . . relief . . . organization[]" is understood as
a governmental entity providing aid or assistance to a population in need; and a "public . . . welfare
organization[]" similarly pertains to a governmental entity formed for the purpose of providing
financial or other assistance to individuals and communities in need. And, the payment provided
by these organizations—the donation—must be a voluntary or charitable transfer of money to a
recipient in need.
                                 2. Unemployment Compensation
       Here, it is undisputed that the appellant in 2010 received state unemployment insurance
benefits. R. at 5, 342. To determine if the statutory language in section 1503 plainly answers
whether the appellant's receipt of that unemployment compensation falls within the exception for
"donations from public . . . relief or welfare organizations," as the appellant contends, we turn to
the nature of these payments. 38 U.S.C. § 1503(a)(1). In that regard, the appellant argues that
unemployment compensation is "undeniably public relief" and "the oldest form of public welfare."
Appellant's Br. at 11-12. He contends that modern unemployment compensation benefits are
"donations . . . given to unemployed workers, based on financial need, from the 'moneys of the
nation,' and are used to 'relieve the unemployed.'" Id. at 13-14. In support of that assertion, he
argues that state unemployment insurance benefits "'provide temporary financial assistance to
workers unemployed through no fault of their own who meet [the state's] eligibility requirements,'"
id. at 11 (quoting https://www.benefits.gov/benefit/1828), and points to the Social Security Act of
1935, Pub. L. No. 74-271, 49 Stat. 620 (codified as amended at 42 U.S.C. §§ 301-1397), and the
source of unemployment compensation—state and federal unemployment taxes on businesses.
Appellant's Br. at 11-14. His arguments are not persuasive.
       Pursuant to 42 U.S.C. § 501, the federal government provides amounts to states to "assist[]
. . . in the administration of their unemployment compensation laws." "The policy of allowing
'broad freedom [to states] to set up the type of unemployment compensation they wish' has been a
basic theme of the program," Baker v. Gen. Motors Corp., 478 U.S. 621, 633 (1986) (quoting Ohio
Bureau of Emp. Servs. v. Hodory, 431 U.S. 471, 483 (1977)), so there is no singular definition of
unemployment compensation that we may consult. However, Black's defines "unemployment
compensation" as "[c]ompensation paid at regular intervals by a state agency to an unemployed
person, esp[ecially] one who has been laid off. [] Also termed unemployment insurance;
unemployment benefit." BLACK'S at 354. "Unemployment insurance" is defined as "[a] type of

                                                  8
social insurance that pays money to workers who are unemployed for reasons unrelated to job
performance. • Individual states administer unemployment insurance, which is funded by payroll
taxes." Id. at 959. In other words, the basic trigger for unemployment compensation is the lack of
a job.
         As an initial matter, the appellant does not address how unemployment compensation
comports with the plain meaning of donations, nor does he cite any specific authority supporting
his contention that unemployment payments are public relief. In that regard, although the stated
purpose of the Social Security Act of 1935 includes "provid[ing] for the general welfare by . . .
enabling the several States to make more adequate provision for . . . the administration of their
unemployment compensation laws," 49 Stat. at 620, the legislative history and U.S. Supreme Court
caselaw support the conclusion that unemployment payments are made as a matter of right and are
not need-based. In particular, a Senate Report accompanying 74 H.R. 7260, 4 reflects that an
important distinction was drawn between unemployment benefits and public relief:
         The essential idea in unemployment compensation is the creation of reserves during
         periods of employment from which compensation is paid to workmen who lose
         their positions when employment slackens and who cannot find other work.
         Unemployment compensation differs from relief in that payments are made as a
         matter of right, not on a needs basis, but only while the worker is involuntarily
         unemployed.
         ....
         Except for a few standards which are necessary to render certain that the State
         unemployment compensation laws are genuine unemployment compensation acts
         and not merely relief measures, the States are left free to set up any unemployment
         compensation system they wish, without dictation from Washington.
         ....
         Unemployment compensation will not completely eliminate the necessity for
         unemployment relief. To the extent, however, that unemployment reserves are
         accumulated, they will reduce the necessity for relief.
S. REP. NO. 74-628, at 11, 13, 15 (1935) (emphases added). These excerpts reflect that Congress
intended for unemployment compensation to serve a purpose other than public relief. See Hughes
v. United States, 138 S. Ct. 1765, 1774 (2018) (considering the purpose behind a statutory scheme
in interpreting a statutory provision). Indeed, in California Department of Human Resources

        4
          H.R. 7260 became law on August 14, 1935, and it is referred to as the Social Security Act of 1935. Pub. L.
No. 74-271, 49 Stat. 620 (codified as amended at 42 U.S.C. §§ 301-1397).

                                                         9
Development v. Java, the U.S. Supreme Court examined the legislative history of the Social
Security Act and similarly observed that the purpose of unemployment compensation was "to give
prompt if only partial replacement of wages to the unemployed, [and] to enable workers 'to tide
themselves over until they get back to their old work or find other employment, without having to
resort to relief.'" 402 U.S. 121, 131 (1971) (emphasis added) (quoting H.R. REP. NO. 615, 74th
Cong., 1st Sess., 7 (1935)); see Java, 402 U.S. at 131-32 (explaining "that the unemployment
compensation insurance program was not based on need in the sense underlying the various
welfare programs that had their genesis in the same period of economic stress" and that
unemployment compensation "serv[es] to maintain the recipient at subsistence levels without the
necessity of his turning to welfare or private charity"); see also New York Tel. Co. v. New York
State Dep't of Labor, 440 U.S. 519, 543 n.43 (1979). But see Appellant's Br. at 12 ("Not only is
state unemployment compensation undeniably public relief, the benefits may well be the oldest
form of public welfare, and one of the first forms of public relief in the United States."). The
Supreme Court further explained that "the Social Security Act received its impetus from the Report
of the Committee on Economic Security," Java, 402 U.S. at 130, which recommended "'[t]his
should be a contractual right not dependent on any means test,'" id. at 131 (quoting Report of the
Committee on Economic Security, Hearings on S. 1130 before the Senate Committee on Finance,
74th Cong., 1st Sess., 1321-22). This all reflects that unemployment compensation is not relief;
rather, it is generally provided as a matter of right based on the employment status of the recipient.
       We thus turn to the question of whether unemployment compensation payments—a state's
regular disbursement of funds set aside for the purpose of providing compensation to workers that
have lost employment for reasons unrelated to job performance—constitute donations from public
relief or welfare organizations, which we understand to mean voluntary gifts/transfers of money
to an individual or population in need from government assistance organizations. The Court holds
that they are not. As discussed above, the words donation, relief, and welfare in 38 U.S.C.
§ 1503(a) all connote payments premised upon the recipient's need, whereas unemployment
compensation turns on the recipient's employment status without regard to need. In sum, the
appellant has not demonstrated that the ordinary common meaning of the terms in section
1503(a)(1) includes unemployment compensation.5

       5
           In light of this conclusion, the Court need not address on the merits the appellant's contention that the

                                                        10
                                       3. Compensated Work Therapy
        The above conclusion, however, is not the end of the matter because the Court must address
the appellant's additional contention that to interpret section 1503(a)(1) as not excluding
unemployment compensation from countable income would lead to an absurd result. Appellant's
Br. at 13-15; see United States v. Turkette, 452 U.S. 576, 580 (1981) ("[A]bsurd results are to be
avoided."); Timex V.I., Inc. v. United States, 157 F.3d 879, 886 (Fed. Cir. 1998) (applying "the
canon that a statutory construction that causes absurd results is to be avoided if at all possible").
Specifically, he asserts that it would be inconsistent to exclude from countable income
compensation from CWT, as outlined in 38 U.S.C. § 1718(g)(3), but not income from
unemployment compensation because both constitute public relief for the unemployed. Appellant's
Br. at 7, 14-15. The Court disagrees.
        First, as discussed above, the appellant has not shown that Congress intended
unemployment compensation to constitute a form of public relief. Second, as argued by the
Secretary, the unemployment compensation program that we know of today existed when
Congress enacted the Veterans' Pension Act of 1959 and when Congress amended the pension
program through the Veterans' and Survivors' Pension Improvement Act of 1978. Secretary's Br.
at 8. Compare Pub. L. No. 74-271, 49 Stat. 620 (Aug. 14, 1935), with Pub. L. No. 86-211, 73 Stat.
432 (Aug. 29, 1959), and Pub. L. No. 95-588, 92 Stat. 2497 (Nov. 4, 1978). If Congress had wanted
to specifically exclude unemployment compensation from countable income for NSC pension
purposes, it knows how and could have done so.
        Congress took such action when it later specified that "[a] distribution of funds" based on
a veteran's participation in a CWT program "shall be considered for purposes of [NSC pension] a
donation from a public or private relief or welfare organization" and thus excluded from countable
income. Veterans' Benefits Improvement and Health Care Authorization Act of 1986, Pub. L. No.
99-576, § 205, 100 Stat. 3248 (codified at 38 U.S.C. § 1718(g)(3)). Congress has not made a

Secretary has broadly interpreted "donations from public or private relief or welfare organizations." 38 U.S.C.
§ 1503(a)(1); see Appellant's Br. at 7-8. In this regard, the appellant points only to a section in VA's Adjudication
Procedures Manual, M21-1, which instructs adjudicators not to "count any type of benefit for which eligibility is
based on the claimant's financial need, such as Welfare [and] Supplemental Security Income." Appellant's Br. at 8;
see M21-1, pt. V, subpt. iii, ch. 1, § I.3.b. The Court notes, however, that the M21-1 instructs that unemployment
compensation is countable income for pension benefits, and, as discussed above, the appellant has not shown that
unemployment compensation is based on financial need. See Secretary's Br. at 12-13 (citing M21-1, pt. V, subpt. iii,
ch. 1, § I.1.a).

                                                        11
similar amendment to the Social Security Act specifying that unemployment compensation shall
be similarly designated or listed unemployment compensation as an exclusion to income in
38 U.S.C. § 1503(a), as it has done for certain other categories of payments. See 38 U.S.C.
§§ 1503(a)(5) (adding in 2012 various reimbursement payments from accidents and losses), (a)(9)
(adding in 1978 payments equal to the amount of expenses for education or vocational
rehabilitation), (a)(10) (adding in 1978 the income of a veteran's dependent child), (a)(11) (adding
in 2010 state-provided veterans' benefits), (a)(12) (adding in 2004 proceeds from life insurance
policies); see also Marx v. Gen. Revenue Corp., 568 U.S. 371, 384 (2013) (finding that Congress's
use of explicit language limiting jurisdiction in one act "caution[ed] against" inferring a similar
limitation in a different act); Astrue v. Ratliff, 560 U.S. 586, 594-95 (2010) (finding that differences
between Social Security Act and Equal Access to Justice Act provisions reveal that "Congress
knows how to make fees awards payable directly to attorneys where it desires to do so"); Dep't of
Housing and Urban Dev. v. Rucker, 535 U.S. 125, 132 (2002) (comparing 21 U.S.C. § 881(a)(7)
with 42 U.S.C. § 1437d(l)(6) and concluding that the differences between the statutes "show[] that
Congress knew exactly how to provide an 'innocent owner' defense" and did not do so in section
1437d(l)(6)).
        Third, the legislative history of the CWT program does not support the appellant's assertion
that the program and unemployment compensation are so similar that they should be treated the
same for pension purposes. See Appellant's Br. at 7, 14-15. In this regard, the House of
Representatives highlighted the unique nature of participation in the CWT program in a House
Report accompanying H.R. 5192:6
        Congress has long viewed VA's incentive work therapy and [CWT] programs as
        valuable components of its array of therapeutic and rehabilitative activities for
        veteran patients. The "work" experiences in which these patients participate provide
        both a clinical opportunity to evaluate the patients' physical and mental capacities
        for work and encouragement for the development of good work habits–
        emphasizing attendance, reliability, productivity, and personal responsibility.
        Consistent with its recognition of the value of these programs, Congress has treated
        these "work-for-pay" activities very differently from conventional employment. It
        has provided, for example, that such patients are not considered employees of the
        United States (38 U.S.C. [§] 1718(a)). Further, recognizing the therapeutic value
        of a work regimen with monetary incentives, Congress has also provided that
        6
           H.R. 5192 passed the House of Representatives on October 1, 1992, and is included in H.R. 5193, which
reflects the compromise agreement between the Senate and House of Representatives Committees on Veterans'
Affairs, also known as the Veterans Health Care Act of 1992. Pub. L. No. 102-585, 106 Stat. 4943.

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        neither a veteran's participation in incentive [work therapy] or [CWT], nor a
        veteran's receipt of monies based on that participation, may be considered as a basis
        for denying or discontinuing a total disability rating for purposes of VA
        compensation or pension (38 U.S.C. [§] 1718(f)).
H.R. REP. NO. 102-622, at 7 (1992) (emphases added). 7 The legislative history supports the
conclusion that Congress intended for the CWT program to be differentiated from ordinary work
based on the rehabilitative and therapeutic components of participation in CWT. Id. The appellant
does not contend, and the legislative history does not reflect, that receipt of unemployment
compensation has similar therapeutic or rehabilitative characteristics.
        For these reasons, the Court concludes that the appellant's argument—that "[t]o think that
Congress meant to include one form of public relief for the unemployed, but exclude others, is
unreasonable"—is unsupported and not persuasive. Appellant's Br. at 14. The Court is not
persuaded that the two categories are so similar that unemployment compensation should also be
considered a "donation" for NSC pension purposes and, as discussed above, the nature of the
unemployment benefits reflects that those payments are not considered public relief.
                                              D. Application
        Here, the Board stated that, unlike CWT wages, "there is no applicable exclusion . . . for
[unemployment compensation] from the [appellant's] countable income" for NSC pension
purposes and therefore his request to exclude such income must be denied. R. at 8. Because the
appellant has not shown that the nature of unemployment compensation payments requires the
Court to find that they fall within the plain meaning of "donations from public or private relief or
welfare organizations" and should therefore be excluded from countable income for purposes of
NSC pension pursuant to 38 U.S.C. § 1503(a)(1)—the sole issue on appeal—the Court concludes
that he has not demonstrated that the Board erred in its determination. Accordingly, the Court will
affirm the Board's decision that the appellant's 2010 unemployment compensation must be
considered countable income for NSC pension purposes.

        7
          House Report 102-622 accompanied H.R. 5192 and is included as a related report in the 1992 Joint
Explanatory Statement on H.R. 5193. See Joint Explanatory Statement, 102 CONG. REC. S17,890 (daily ed. Oct. 8,
1992), reprinted in 1992 U.S.C.C.A.N. 4186, 4186.

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                                         III. CONCLUSION
        After consideration of the parties' pleadings and a review of the record, the Board's
February 26, 2019, decision denying the appellant's request to exclude state unemployment
compensation from his total countable income for purposes of calculating the amount of his NSC
pension is AFFIRMED.

        TOTH, Judge, concurring in part and in the judgment: I regard our analysis of the plain
meaning of 38 U.S.C. § 1503(a) and the guidance from caselaw as well-reasoned and sufficient to
resolve the dispute without having to venture into the vagaries of congressional reports and the
like. For this reason, I join the panel’s fine opinion in all aspects save those that discuss legislative
history.

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