Wilson v. Gibson, 753 F.3d 1363 (June 10, 2014)
REDUCTION OF COMPENSATION DURING INCARCERATION
Held: Reduction of compensation under 38 U.S.C. § 5313(a)(1) begins on the 61st day of incarceration for a felony conviction – regardless of whether post-conviction review is sought.
Veteran was found guilty of two felonies (attempted murder and aggravated battery) and sentenced to two concurrent life sentences. He began serving his sentences in October 2001 while he appealed his convictions. He continued to pursue his appeals up to the U.S. Supreme Court, which denied his petition in October 2010.
At the time of his conviction, the veteran was in receipt of a 70% disability rating from VA. Under 38 U.S.C. § 5313(a)(1), veterans with service-connected disabilities rated 20% or more who are incarcerated for a felony conviction will have their benefits reduced to 10% starting on the 61st day of their incarceration. VA notified the veteran in February 2002 that it would begin reducing his benefits to 10%, effective December 20, 2001 – the 61st day of his incarceration. VA then sought to collect an overpayment from Mr. Wilson in excess of $15,000. Mr. Wilson applied for a waiver and was denied.
He appealed to the CAVC, challenging the validity of the debt on the ground that the felony conviction “should not be deemed to occur until the conviction was absolutely final” – i.e., when he was denied review by the U.S. Supreme Court. The CAVC denied his appeal, holding that the incarceration period referred to in the statute “is calculated without regard to whether the veteran has appealed his conviction.” The Federal Circuit agreed, noting that the implementing regulation, 38 C.F.R. § 3.665(m), “does not contemplate full payment of benefits while post-conviction relief is sought.”