PREC 12-93    Payment of attorney fees from past-due benefits when Veteran's Indebtedness to the United States exceeds total amount of past-due Benefits      Citation: Vet. Aff. Op. Gen Couns. Prec. 12-93, VAOPGCPREC 12-93, 1993

QUESTION PRESENTED:

Pursuant to the opinion of the Court of Veterans Appeals (CVA) in In the Matter of the Fee Agreement of William G. Smith in Case Number 91-488 et al., 4 Vet. App. 487 (1990) appeal docketed, No. 94-7017 (Fed. Cir. Nov. 9, 1993) [hereinafter Matter of Smith], is the Department of Veterans Affairs (VA) required to pay 20 percent of a claimant's past-due benefit award directly to an attorney in accordance with an attorney fee agreement when the claimant would not be entitled to payment of any portion of the past-due benefit award because his outstanding indebtedness to the United States exceeded the amount of the past-due benefits award?

HELD:

The provisions of 38 U.S.C. § 5314(a) require VA to apply the entire amount of the past-due benefits award to offset the veteran's outstanding debt to the United States.  Therefore, no fund of past-due benefits payable to the veteran was created, and the veteran's attorney could not, by assignment under 38 U.S.C. § 5904(d), obtain a right to direct VA payment of attorney fees from the past-due benefits award.