On May 16, 2024, the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) issued a precedent-setting decision in Barry v. McDonough that significantly impacts veterans who receive special monthly compensation (SMC).
A precedent-setting decision is a ruling that establishes a legal principle or interpretation that lower courts must follow in future similar cases.
The Federal Circuit reversed a decision by the Court of Appeals for Veterans Claims (“Veterans Court”) in Barry v. McDonough, No. 20-3367 (Vet. App. Oct. 25, 2021), which limited a veteran’s entitlement to additional SMC increases.
This ruling is a significant victory for veterans with severe disabilities.
Background: The Dispute Over Multiple SMC Increases
The case revolved around interpreting 38 C.F.R. § 3.350(f)(3), which sets forth the rates of SMC for veterans with specific severe disabilities. Daniel D. Barry, a Navy veteran, argued that the regulation allows for multiple intermediate-rate SMC increases if a veteran has additional disabilities independently ratable at 50% or more.
The Board of Veterans’ Appeals had previously denied Barry additional SMC increases. On appeal, the Veterans Court agreed with the Board, interpreting the regulation to permit only one SMC increase, regardless of the number of qualifying disabilities a veteran has.
The Federal Circuit’s Analysis and Reversal
However, the Federal Circuit reversed the Veterans Court’s decision in Barry v. McDonough, No. 22-1747 (Fed. Cir. May 16, 2024). The court held that the plain language of § 3.350(f)(3) does not limit the number of SMC increases a veteran can receive. Instead, it is a mandatory entitlement that can apply multiple times, subject to the statutory maximum rate outlined in 38 U.S.C. § 1114(p).
The Federal Circuit emphasized that the regulation’s use of singular and specific terms like “the next higher intermediate rate” indicates a half-step increase for each qualifying disability rather than a single increase overall. The court also situated this reading within the broader statutory SMC scheme under 38 U.S.C. § 1114, which recognizes the cumulative effects of multiple disabilities.
Implications for Veterans Currently Receiving SMC
The Barry decision is excellent news for veterans currently receiving SMC. It confirms that under 38 C.F.R. if you have additional service-connected disabilities independently ratable at 50% or more, § 3.350(f)(3) entitles you to multiple intermediate-rate SMC increases, which can result in a substantial increase in your monthly compensation.
If the VA has denied you additional SMC increases despite having multiple qualifying disabilities, the Barry ruling may provide grounds to challenge that denial. It would help if you discussed your circumstances with an experienced veterans law attorney or claims agent to determine the best course of action.
The Road Ahead: Implementing the Barry Decision
While the full impact of the decision will become more apparent as the VA implements it, Barry v. McDonough represents an important affirmation of the benefits Congress intended to provide to veterans with severe disabilities through the SMC program. The VA must update its adjudication procedures and manual, including the relevant sections of the M21-1 Adjudication Procedures Manual, to reflect the Federal Circuit’s interpretation of 38 C.F.R. § 3.350(f)(3).
Veterans service organizations and advocates will also actively inform veterans about the implications of the Barry decision and help them get the SMC benefits they are entitled to under the law.
As always, we at HadIt.com will keep you updated on further developments and provide resources to help you navigate the VA claims process.
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