Veterans with service connected disabilities may be eligible for Extra-Schedular compensation - a recent case elaborates on the standard.

The United States Court of Appeals for Veterans Claims recently issued a decision in the case of Yancy v. McDonald, No. 14-3390, which, in turn, analyzed and applied a case from the United States Court of Appeals for the Federal Circuit, Johnson v. McDonald, 462 F.3d 1362 (Fed. Cir. 2014) that set a new standard to be used to determine whether a veteran is entitled to Extra-Schedular compensation.      

What is Extra-Schedular compensation? 

I’m glad you asked!

Sometimes, a disability rating does not accurately address a veteran’s actual needs, given the severity of the disability involved.  The technical language for this is when "exceptional or unusual disability picture with such related factors as marked interference with employment or frequent periods of hospitalization as to render impractical the application of regular schedular standards."  38 C.F.R. § 3.321(b) (1).  In order to qualify for Extra-Schedular compensation, the VA looks at whether the veteran presents with an exceptional disability picture, for which the regular service connected disability ratings tables are inadequate. 

Wait, what does that really mean?  What the language from the regulations means is that sometimes a veteran is faced with a disability or disabilities which compound to have a more negative affect on him than is typical. 

For example, a veteran may have a service connected disability rating of thirty percent for a knee injury.  However, in many cases, that knee injury is going to cause the veteran problems that go beyond factors taken into account by the disability ratings schedule.  These may include repeated trips to the hospital or to the doctor to address pain or complications for the injury. 

The regulations also contemplate that multiple service connected disabilities may contribute to an increased negative impact on the veteran.  We have heard of the concept of synergy – two separate factors that work together to achieve efficiency, effectively being more than the sum of their separate parts.  Well, this is sort of the opposite.  Two or more service connected disabilities can “work together” to hamper a veteran’s lifestyle or employment to a greater degree than they would separately. 

When this happens, Extra-Schedular compensation is meant to make up for this increased impact. 

So, how does the VA determine whether a veteran qualifies for Extra-Schedular compensation? 

The VA employs a three step process in looking to see if a veteran qualifies for Extra-Schedular compensation.  This process was laid out in the case of Thun v. Peake, 22 Vet. App. 111 (2008). 

The first step is to compare the level of severity and symptomology – or “how bad the veteran’s disability is and how it affects him” – with the established criteria in the ratings table.  This step asks whether the criteria listed in the ratings table reasonably describes the veteran’s disability and how it affects him.  If so, then the VA sticks with the regular disability ratings table, and Extra-Schedular compensation is not needed. 

If it does not, then the analysis proceeds to the second step.  The Code of Federal Regulations state that, in this step, the VA must determine whether the veteran’s “exceptional disability picture” affects him in other ways, such as “marked interference with employment,” or “frequent periods of hospitalization.”  See 38 C.F.R. §3.321(b)(1). In other words, the VA looks at how the veteran’s disability or disabilities affect his life. 

If a veteran’s disabilities meet the requirements for the first two steps, then the third step is that the case is referred to the Undersecretary for Benefits, or the director of the Compensation and Pension Service.  The determination at this step is whether the assignment of an Extra-Schedular disability rating is appropriate in order to “accord justice.”  Clearly, some discretion is built into each of the three steps. 

So, what happened in the Yancy case? 

In the Yancy case, a veteran appealed a Board of Veteran’s Appeals decision addressing various service connected disabilities related to his foot, including the determination that he was not eligible for Extra-Schedular compensation.

Mr. Yancy was an Army veteran.  He served for a total of twenty one years.  Prior to his final discharge, he filed a claim for various service connected foot disabilities.  He was given a rating for the disabilities. 

Later, Mr. Yancy filed a Notice of Disagreement with the VA’s determination.  He claimed that his disabilities were more extensive than his rating accounted for.  He also claimed additional service connected disabilities, including pain in his knees.  The Board did increase Mr. Yancy’s disability ratings.  However, the Board denied that Mr. Yancy was eligible for Extra-Schedular compensation.  Mr. Yancy appealed to the United States Court of Appeals for Veteran’s Claims.

The appeal centered around two claims.  The first was that the Board erred in not granting a disability rating for Mr. Yancy’s foot greater than it did.  The second is that the Board erred in not holding that Mr. Yancy qualified for Extra-Schedular compensation.

The Court agreed on both counts.  While not the focus of this article, it is important to note that the Court held that the Board did not provide adequate reasons and bases for its determination that Mr. Yancy was not entitled to an even higher disability rating for his foot.  The Court also held that the Board erred with respect to Mr. Yancy’s claim for Extra-Schedular compensation. 

The Court noted that the Federal Circuit’s decision in the Johnson case affected the relevant analysis.  Prior to the decision in the Johnson case, the law was that if the veteran raised the issue of entitlement to Extra-Schedular compensation, or if entitlement was apparent from the record, then the Board was required to conduct the three-step analysis of the Thun case.  The Secretary of Veterans Affairs emphasized that each step of the Thun analysis is a separate, discrete inquiry.

The Court stated that the Johnson case held that Extra-Schedular compensation analysis can be based on the collective impact of multiple service connected disabilities.  The Court stated that this analysis is still conducted where a veteran raises the issue of Extra-Schedular compensation, or it is reasonably raised by the record.  And, although the Board must consider the combined effects of all of a veteran’s service connected disabilities in the analysis, that consideration must not include solely disabilities not currently on appeal.  In other words, the Board must look at the entire picture of a veteran’s service connected disabilities in its determination of whether Extra-Schedular compensation may be appropriate. 

How did the Court’s analysis affect Mr. Yancy?

The Court vacated the Board’s decision that Mr. Yancy was not entitled to Extra-Schedular compensation.  The Court held that the Board failed to consider the collective impact of all of Mr. Yancy’s service connected disabilities.  Although he had not been given a rating for the pain in his knees, Mr. Yancy had raised this issue in the record.  The Board, however, failed to take the pain to Mr. Yancy’s knees into account as an overall part of his disability picture.  As a result, the Court remanded the case to the Board for further consideration.