Citation Nr: 0811198	
Decision Date: 04/04/08    Archive Date: 04/14/08

DOCKET NO.  05-17 616A	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Regional Office in Atlanta, 
Georgia


THE ISSUE

Entitlement to waiver of the recovery of overpayment of VA 
disability compensation in the amount of $5,390.33, to 
include the preliminary issue of the validity of the debt.


REPRESENTATION

Appellant represented by:	Veterans of Foreign Wars of 
the United States


WITNESS AT HEARING ON APPEAL

Appellant


ATTORNEY FOR THE BOARD

Simone C. Krembs, Associate Counsel
INTRODUCTION

The veteran served on active duty from September 1965 to 
September 1967, and from January 3, 2003 to March 31, 2004.

This matter comes before the Board of Veterans' Appeals 
(Board) from a February 2005 decision by the Committee on 
Waivers and Compromises (Committee) at a Department of 
Veteran's Affairs (VA) Regional Office (RO) that denied the 
veteran's claim for waiver of recovery of an overpayment of 
$5,390.33 in VA disability compensation.  In February 2008, 
the veteran testified before the Board at a hearing that was 
held via videoconference from the RO.


FINDINGS OF FACT

1.  The veteran was awarded VA disability compensation 
benefits for diabetes mellitus in July 2001.  The record 
reflects that because the veteran was in the Active Reserves 
he was advised that active or inactive duty training pay 
could not legally be paid concurrently with VA disability 
compensation or pension benefits.  He was also instructed 
that upon notification of active or inactive duty training, 
VA would assume that the veteran was waiving his entitlement 
to VA disability compensation in favor of active duty pay 
unless he specifically informed VA otherwise.

2.  By letter received at the RO on January 30, 2003, the 
veteran informed VA that he had been called to active duty on 
January 1, 2003, and that his period of active duty would 
last for 365 days.  He did not opt to continue to receive VA 
disability compensation in lieu of receiving active duty pay.

3.  The veteran was released from active duty on March 31, 
2004.  By letter received at the RO on April 13, 2004, the 
veteran informed VA that he had returned from active duty.

4.  Despite receiving timely notification from the veteran 
regarding his active duty status, VA did not adjust the 
veteran's disability compensation but rather continued to 
erroneously pay his disability compensation throughout the 
term of his active duty.  This erroneous payment resulted in 
the current overpayment of $5,390.33.

5.  The overpayment was solely the result of VA 
administrative error; the veteran's actions did not 
contribute to the creation of the debt.


CONCLUSION OF LAW

The overpayment of disability compensation benefits in the 
amount of $5,390.33 was based solely upon VA administrative 
error.  Therefore, the overpayment was not properly created.  
38 U.S.C.A. §§ 5112, 5302 (West 2005); 38 C.F.R. § 3.500 
(2007).


REASONS AND BASES FOR FINDINGS AND CONCLUSION

Waiver of Overpayment

The issue of the validity of a debt is a threshold 
determination that must be made prior to a decision on a 
request for waiver of the indebtedness.  See Schaper v. 
Derwinski, 1 Vet. App. 430 (1991).  

In order for the Board to determine that the overpayment was 
properly created, it must be established that the veteran was 
not legally entitled to the benefits in question, or, if 
there was no legal entitlement, then it must be shown that VA 
was solely responsible for the veteran erroneously being paid 
benefits.  The veteran in this case contends that he does not 
owe the debt because it was created due to sole 
administrative error.  When an overpayment has been made by 
reason of an erroneous award based solely upon administrative 
error, the reduction of that award cannot be made retroactive 
to form an overpayment of debt owed to VA from the recipient 
of the erroneous award.  See 38 U.S.C.A. § 5112(b)(10); 38 
C.F.R. § 3.500(b); Erickson v. West, 13 Vet. App. 495, 499 
(2000).  Administrative errors include all administrative 
decisions of entitlement, whether based upon mistake of fact, 
misunderstanding of controlling regulations or instructions, 
or misapplication of law.  VAOPGPREC 2-90 (July 17, 1989), 55 
Fed. Reg. 27757 (1990).  Sole administrative error, however, 
may be found to occur only in cases where the veteran neither 
had knowledge of, nor should he have been aware of the 
erroneous award.  Further, such error contemplates that 
neither the veteran's actions nor his failure to act 
contributed to payment pursuant to an erroneous award.  38 
U.S.C.A. § 5112(b)(10); 38 C.F.R. § 3.500(b)(2); Jordan v. 
Brown, 10 Vet. App. 171 (1997) (sole administrative error is 
not present if the payee knew, or should have known, that the 
payments were erroneous).

The record reflects that by letter dated July 26, 2001, the 
veteran was informed that he had been awarded additional 
disability benefits based upon a July 2001 rating decision.  
The record also reflects that because the veteran was in the 
Active Reserves he was advised that active or inactive duty 
training pay could not legally be paid concurrently with VA 
disability compensation or pension benefits.  He was also 
instructed that upon notification of active or inactive duty 
training, VA would assume that the veteran was waiving his 
entitlement to VA disability compensation in favor of active 
duty pay unless he specifically informed VA otherwise.

By letter received at the RO on January 30, 2003, the veteran 
informed VA that he had been called to active duty on January 
1, 2003, and that his period of active duty would last for 
365 days.  He did not opt to continue to receive VA 
disability compensation in lieu of receiving active duty pay.  
The veteran was released from active duty on March 31, 2004.  
By letter received at the RO on April 13, 2004, the veteran 
informed VA that he had returned from active duty.  Despite 
receiving timely notification from the veteran regarding his 
active duty status, VA did not adjust the veteran's 
disability compensation but rather continued to erroneously 
pay his disability compensation throughout the term of his 
active duty.

By a decision dated in August 2004, the RO determined that 
the veteran had erroneously received disability compensation 
in the amount of $5,390.33 as a result of having been paid 
disability compensation concurrently with active duty pay.  
In a September 2004 letter, VA informed the veteran that this 
overpayment had resulted in the creation of a debt in the 
amount of $5,390.33.  The veteran timely requested a waiver 
of the collection of this overpayment in September 2004 
correspondence and therefore meets the basic eligibility 
requirements for a waiver of recovery of the VA indebtedness.  
38 U.S.C.A. § 5302(a) (West 2002); 38 C.F.R. § 1.963(b)(2) 
(2007).

Significantly, however, the Board finds that the overpayment 
was created solely as a result of VA administrative error and 
it cannot, therefore, be held to have been properly created.  
It is clear that the veteran timely informed VA of his call 
to active duty and that despite his notification VA continued 
to pay him disability compensation.  This overpayment was the 
result of administrative error.  In order for the overpayment 
to be considered the result of sole administrative error, and 
for the veteran to consequently not be liable for the debt, 
the veteran must not have known, or should have known, that 
the payments were erroneous.  The veteran testified in 
February 2008 that he was unaware of the erroneous 
overpayment throughout the time he was on active duty because 
he was stationed in the Middle East and did not have access 
to his bank account.  Additionally, the veteran's family 
throughout that time period was regularly accessing and using 
the money in his bank account, as a result of which it was 
not immediately clear upon his return from active duty that 
he had been overpaid by VA.  In addition, the veteran stated 
that he had no reason to suspect that he might have been 
overpaid because he had properly notified VA of both his call 
to active duty and his discharge.  

The evidence of record does not demonstrate that the veteran 
had knowledge that he was receiving benefits to which he was 
not entitled or that he otherwise acted or failed to act in 
such a way as to perpetuate the error.  Accordingly, the 
Board finds that the overpayment was solely the result of VA 
administrative error, and that the debt therefore was not 
properly created and cannot legally be charged to the 
veteran.  Erickson v. West, 13 Vet. App. 495 (2000) (holding 
that when an overpayment has been made by reason of an 
erroneous award based solely on administrative error, the 
reduction of that award cannot be made retroactive to form an 
overpayment debt owed to VA from the recipient of the 
erroneous award).

In view of the finding that the overpayment resulted solely 
as a result of VA administrative error, the Board finds that 
the RO's decision to adjust the veteran's disability 
compensation effective January 3, 2003, through March 31, 
2004, was improper and that the debt is not a valid debt to 
VA.  38 U.S.C.A. §§ 5107, 5111(a), 5112(b)(2)(9)(10); 38 
C.F.R. §§ 3.401(b)(1), 3.500(b), 3.501(d)(2). 

Finally, the Board finds that the provisions relating to 
notice and development found in the Veterans Claims 
Assistance Act of 2000 (VCAA), Pub. L. No. 106-475, 114 Stat. 
2096 (2000), are not applicable to cases involving 
overpayment of indebtedness.  Barger v. Principi, 16 Vet. 
App. 132 (2002); Lueras v. Principi, 18 Vet. App. 435 (2004).  
Notwithstanding the fact that the notice and development 
provisions are not controlling in these matters, the Board 
has reviewed the case for purposes of ascertaining that the 
appellant has had a fair opportunity to present arguments and 
evidence in support of his challenge to the validity of the 
overpayment.  In short, the Board concludes from that review 
that the requirements for the fair development of the appeal 
have been met in this case.  Furthermore, given that this 
decision represents a full grant of the benefit sought on 
appeal, there would be no useful purpose in the further 
exploration of whether the veteran has been provided with 
adequate notice and assistance in pursuit of his claim.


ORDER

Waiver of the recovery of overpayment of VA disability 
compensation benefits in the amount of $5,390.33 is granted.



____________________________________________
Harvey P. Roberts
Veterans Law Judge, Board of Veterans' Appeals



 Department of Veterans Affairs