Citation Nr: 0811211 Decision Date: 04/04/08 Archive Date: 04/14/08 DOCKET NO. 05-32 562 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Anchorage, Alaska THE ISSUE Entitlement to waiver of the recovery of an overpayment of VA pension benefits in the calculated amount of $4,096. WITNESS AT HEARING ON APPEAL Appellant ATTORNEY FOR THE BOARD K.S. Hughes, Counsel INTRODUCTION The veteran served on active duty from August 1973 to August 1976. This appeal comes before the Board of Veterans' Appeals (Board) on appeal from an October 2003 decision of the Committee on Waivers and Compromises (Committee) of the Department of Veterans Affairs (VA) Anchorage, Alaska, Regional Office (RO). In May 2007, the veteran appeared before the undersigned Veteran's Law Judge and testified regarding this matter. A transcript is associated with the record. FINDINGS OF FACT 1. The amount of overpaid VA pension benefits is calculated as $4,096. 2. Despite being previously told of his duty to report his receipt of any income, the appellant was at fault in the creation of the overpayment of pension benefits since he did not promptly inform VA of his receipt of earnings. 3. VA was not at fault in the creation of the overpayment of the pension benefits. 4. The failure of the Government to insist upon its right to repayment of the assessed overpayment indebtedness would result in unjust enrichment of the appellant, inasmuch as he accepted benefits to which he was not entitled, based on his income. 5. Collection of that indebtedness would not defeat the purpose of the pension benefit program, or otherwise be inequitable. CONCLUSION OF LAW Recovery of the overpayment of VA pension benefits, in the amount of $4,096 would not be against equity and good conscience. 38 U.S.C.A. §§ 5107, 5302 (West 2002); 38 C.F.R. §§ 1.963, 1.965 (2007). REASONS AND BASES FOR FINDINGS AND CONCLUSION Initially, the Board notes that the Veterans Claims Assistance Act of 2000 (VCAA), codified at 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5106, 5107 (West 2002); 38 C.F.R. §§ 3.102, 3.156(a), 3.159, and 3.326(a), redefined VA's duties to notify and assist a claimant in the development of a claim. However, the notice provisions of the VCAA are inapplicable to waiver claims. Barger v. Principi, 16 Vet. App. 132 (2002). In his original nonservice connected disability pension claim, the veteran reported that his only monthly income was $700 of Supplemental Security (SSI)/Public Assistance. In a May 2001 VA Form 21-527, Income-Net Worth and Employment Statement, the veteran reported that he had no employment since he became totally disabled. He reported $1000 per month of Public Assistance income for himself and his two children. He further reported $1,900 per year from the Alaska Permanent Fund Distribution for himself and his two children. Upon consideration of the foregoing, the veteran was granted a nonservice-connected pension in a December 2001 rating decision effective in October 2000. In the January 2002 notice of his nonservice-connected pension award, the veteran was specifically informed of his duty to notify VA right away of any change in his income, to include his earnings. In a December 2002 VA Form 21-0517, Improved Pension Eligibility Verification Report (Veteran with Children), which was received by VA in January 2003, the veteran reported $4,000 in wages from all employment from January 1, 2002, to December 31, 2002, and from January 1, 2003, to December 31, 2003. He also reported $1,500 in total interest and dividends for himself and each of his two children for 2002 and 2003. Based on this information, in February 2003, the veteran was notified that VA was reducing his payment because he had earned income of $4000 for the year which VA had not been made aware of until receiving his Eligibility Verification Report in January 2003. In March 2003, the veteran was notified that he owed VA $4,096. The veteran claims entitlement to waiver of recovery of this overpayment of his pension benefits in the calculated amount of $4,096. The veteran does not dispute that an overpayment occurred. He does maintain, however, that undue hardship would result if he were required to repay the overpayment. In a March 2003 VA Form 5655, Financial Status Report, the veteran reported that he had been employed as a part time taxi driver since October 1999 and that he earned $400 per month. He also reported pension, compensation, or other income of $700 and a total monthly net income of $1,100. He reported expenses of $735 for rent or mortgage payment, $600 for food, $200 for utilities and heat, and $400 for monthly payments on installment contracts and other debts. His total monthly expenses were listed as $1,035. The veteran reported his assets as an automobile valued as $2,500 and real estate valued as $65,000. He indicated that he could pay from zero to $50 on a monthly basis toward his debt. An October 2003 decision by the Committee on Waivers and Compromises denied the appellant's claim for failure to immediately notify VA of his employment. Specifically, the Committee indicated that fault on the part of appellant was found. During his May 2007 Travel Board hearing before the undersigned, the veteran testified that he earns approximately $1000 per month as a taxi driver, receives $400 per month in food stamps, and he, his two children, and his live in girlfriend receive approximately $1,000 each from the Alaska Permanent Fund Distribution. He reported his utility bills average from $100 to $150 in the summer and $300 in the winter and that he has approximately $50,000 in credit card debt for which his monthly payment are approximately $3000. He further testified that he is approximately four months behind on his mortgage payments, which average about $1,300 per month, and his credit card payments. VA law provides that recovery of overpayment of any benefits shall be waived if there is no indication of fraud, misrepresentation, or bad faith on the part of the person or persons having an interest in obtaining the waiver, and recovery of the indebtedness from the payee who received such benefits would be against equity and good conscience. 38 U.S.C.A. § 5302; 38 C.F.R. § 1.963(a). The standard "Equity and Good Conscience" will be applied when the facts and circumstances in a particular case indicate a need for reasonableness and moderation in the exercise of the government's rights. The decision reached should not be unduly favorable or adverse to either side. The phrase "Equity and Good Conscience" means arriving at a fair decision between the obligor and the government. In making this determination, consideration will be given to the following elements, which are not intended to be all- inclusive: (1) Fault of the debtor. Where actions of the debtor contribute to the creation of the debt. (2) Balancing of faults. Weighing fault of the debtor against VA fault. (3) Undue hardship. Whether collection would deprive debtor or family of basic necessities. (4) Defeat the purpose. Whether withholding of benefits or recovery would nullify the objective for which benefits were intended. (5) Unjust enrichment. Failure to make restitution would result in unfair gain to the debtor. (6) Changing position to one's detriment. Reliance on VA benefits results in relinquishment of a valuable right or incurrence of a legal obligation. See 38 U.S.C.A. § 5302; 38 C.F.R. § 1.965(a). The United States Court of Appeals for the Federal Circuit (Federal Circuit) has recognized the Board's "authority to discount the weight and probity of evidence in light of its own inherent characteristics and its relationship to other items of evidence." Madden v. Gober, 125 F.3d 1477, 1481 (Fed. Cir. 1997). Based on the evidence of record, the Board finds recovery of the overpayment would not be against the principles of equity and good conscience. The record shows the appellant was at fault in the creation of the debt, in essence, for failure to properly report income. The Board finds that waiver of recovery would constitute unjust enrichment by creating an unfair gain to the appellant because he would be allowed to retain funds to which he was not entitled. The appellant was paid more than he was entitled under VA law because he failed to report his income. Although the appellant's hearing testimony, written communications, and financial status reports indicate limited income, the October 2003 Committee on Waivers and Compromises found that financial hardship was not shown as the veteran had provided incomplete income information. Notwithstanding any incompleteness in the income information, it is noted that the veteran has reported assets in excess of $65,000 which include his ownership of real estate as well as $1,000 per month of income from driving a taxi. The Board finds that collection of the debt would not defeat the purpose of paying benefits by nullifying the objective for which the benefits were intended. There is no indication that the appellant's reliance on the overpaid benefits resulted in the appellant's relinquishment of a valuable right or the incurrence of a legal obligation. Although the appellant demonstrates some financial hardship when considering his income, credit card payments, and being behind on the mortgage; he has not supplied evidence which would suggest that his indebtedness to the Government should not be afforded the same consideration and attention he provides to his other obligations, including current credit card balances. Additionally, given that the appellant has listed an automobile and real estate that were not listed on his previous financial disclosures, it is apparent that requiring him to adhere to a repayment schedule to reimburse the government would not deprive the appellant or his family of basic necessities. After weighing all the evidence of record, the Board finds that recovery of the overpayment would not be against equity and good conscience. The appellant's fault in the creation of the debt and his unjust enrichment outweigh any possible financial hardship that may result in the repayment. Simply put, the United States Government is due to the same consideration that the appellant affords his other creditors, and the record does not show that he would be deprived of life's basic necessities if recovery was required through the payment of reasonable monthly installments. When all the evidence is assembled VA is responsible for determining whether the evidence supports the claim or is in relative equipoise, with the appellant prevailing in either event, or whether a preponderance of the evidence is against the claim, in which case the claim is denied. Gilbert v. Derwinski, 1 Vet. App. 49, 55 (1990). In this case, the preponderance of the evidence is against a waiver of the assessed overpayment. The claim is denied. ORDER Entitlement to waiver of recovery of overpayment of VA pension benefits in the calculated amount of $4,096 is denied. ____________________________________________ D. C. Spickler Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs