Moffitt v. Shinseki, 26 Vet.App. 424 (Feb. 14, 2014)
HYPOTHETICAL ENTITLEMENT, RETROACTIVITY
Retroactive application of the VA rule prohibiting hypothetical entitlement to Dependency and Indemnity Compensation (DIC) benefits is not prohibited, even in cases where the claim for DIC under this theory was filed before VA took steps to prohibit hypothetical entitlement.
In 1946, the veteran was awarded a combined 100% disability rating for residuals of injuries sustained during World War II. In 1956, VA reduced his rating to 60%.In 1979, the veteran sought a total disability rating based on individual unemployability. The veteran died while that claim was pending. His surviving spouse was subsequently awarded DIC in 1983. In 1999, she applied for enhanced DIC, asserting that her husband should have been rated 100% for 10 or more years prior to his death. The CAVC discussed the history of hypothetical entitlement, and assessed the question of whether retroactive application of the rule prohibiting hypothetical entitlement was impermissible. The Court conducted the three-prong analysis required by Princess Cruises v. United States, 397 F.3d 1358 (Fed. Cir. 2005), and determined that retroactive application of the rule would not be impermissible in this case. Although this case continues to hammer the nail in the coffin of hypothetical entitlement, the Court’s review suggests that a case-by-case analysis of the Princess Cruises factors will be warranted in situations that are not precisely on point with the existing hypothetical entitlement cases.