Citation Nr: 1003571 Decision Date: 01/25/10 Archive Date: 02/01/10 DOCKET NO. 03-29 404 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Waco, Texas THE ISSUE Entitlement to a waiver of recovery of an overpayment of disability compensation benefits in the amount of $3,441.14. REPRESENTATION Appellant represented by: The American Legion WITNESS AT HEARING ON APPEAL Appellant ATTORNEY FOR THE BOARD N. T. Werner, Counsel INTRODUCTION The Veteran served on active duty from May 1980 to May 1984. This appeal comes before the Board of Veterans' Appeals (Board) from an April 2003 overpayment determination of the Department of Veterans Affairs (VA) Regional Office (RO) in Waco, Texas, and from a June 2003 decision by the Committee on Waivers and Compromises (Committee) which granted a waiver of recovery of compensation overpayment in the amount of $2,328.00, out of a total overpayment in the amount of $5,820.34. Following receipt of notification of the June 2003 determination, the Veteran perfected a timely appeal with respect to the issue of entitlement to a waiver of recovery of the remaining balance of the overpayment in the amount of $3,492.34. In May 2006, the Veteran testified at a hearing before the undersigned Acting Veterans Law Judge. In December 2007, the Board remanded the appeal for additional development. While the appeal was in remand status, a March 2008 decision granted an additional $51.20 waiver, thereby reducing the amount of the overpayment to $3,441.14. Accordingly, the issue on appeal has been modified to reflect this change on the first page of this decision. In December 2008, the Veteran filed with the New Orleans, Louisiana, VA regional office (RO), a request to transfer his VA claims file to the New Orleans RO from the Waco RO. He also requested a direct deposit of his VA compensation benefits be started, and to change his representative from the Texas Veterans Commission to the American Legion. With respect to the request to transfer the claims file to the New Orleans RO and to start a direct deposit of VA compensation benefits, these matters are referred to the Appeals Management Center (AMC) for appropriate handling or further referral on remand. As to the request to revoke the existing designation of representation in favor of the Texas Veterans Commission and appoint the American Legion as the new representative, this motion is approved by the Board. In view of the nature of the present disposition, there is no harm to the appellant in proceeding with the present remand as the newly designated representative will have an opportunity to fully address the claim on remand. This appeal is REMANDED to the RO via the AMC in Washington, DC. VA will notify the appellant if further action is required. REMAND In cases where there has been no finding of fraud, misrepresentation, or bad faith on the Veteran's part, repayment of the subject debt may be waived. 38 U.S.C.A. § 5302(a). Waiver will be granted when recovery of the indebtedness would be against equity and good conscience. 38 U.S.C.A. § 5302(a); 38 C.F.R. §§ 1.963(a), 1.965(a). Pursuant to the provisions contained in 38 U.S.C.A. § 5302 and 38 C.F.R. § 1.964(e), a request for a waiver of an overpayment must be made within 180 days of the date of notification of the indebtedness. The standard of "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. 38 C.F.R. § 1.965(a). In deciding whether collection would be against equity and good conscience, the following factors are for consideration: (1) fault of debtor, where actions of the debtor contribute to creation of the debt; (2) balancing of faults, weighing fault of 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. These factors are not meant to be all inclusive. 38 C.F.R. § 1.965(a). It is the responsibility of the recipient of VA benefits to notify VA of all circumstances which will affect entitlement to receive the rate of the benefit being paid, and such notice must be provided when the recipient acquires knowledge that his or her income or other circumstances which would affect the entitlement to receive, or the rate of, the benefit being paid, has changed. 38 C.F.R. § 3.660(a)(1). A Veteran who is incarcerated in a federal, state, or local penal institution in excess of 60 days for conviction of a felony committed after October 7, 1980, and is rated 10 percent disabled shall be paid compensation at one half the rate of compensation beginning on the 61st day of incarceration. 38 U.S.C.A. §§ 1114, 5313; 38 C.F.R. § 3.665. A review of the record reveals that a June 1984 rating action granted service connection for residuals of an acromioclavicular joint dislocation and fractures of the left shoulder (left shoulder disability) and awarded a compensable evaluation of 20 percent, effective from May 1984. By a May 1986 decision, the RO reduced this evaluation to 10 percent, effective from August 1986. This disability remains the Veteran's only compensable service-connected disorder. The Veteran was convicted of a felony and sentenced to a 16- year period of incarceration that began on November 24, 1992, with the 61st day of incarceration being January 23, 1993, and his expected release date being June 17, 2008. The Veteran was granted parole in July 2004. In April 2003, the RO determined that an overpayment in the amount of $5,820.35 was created when the Veteran received full disability compensation payments at the 10 percent compensation level during his felony incarceration for the period beginning from January 23, 1993 (61st day after incarceration) to April 30, 2003 (the effective date of VA's adjustment of the Veteran's disability compensation payment). The overpayment at issue resulted from the retroactive reduction and adjustment of the appellant's compensation benefits after it was learned by the Waco RO that the Veteran was incarcerated for a felony. In June 2003, VA determined that a waiver in the amount of $2,328.00 was warranted for the period of June 21, 1999, to April 30, 2003, because VA had received notification from the Veteran of his incarceration on June 21, 1999, but had failed to adjust his disability benefit award accordingly. In March 2008, VA determined that an additional waiver in the amount of $51.20 was warranted because VA actually received notice of the Veteran's incarceration on May 19, 1999. In reviewing the matter on appeal, including the additional evidence associated with the record following the prior remand, the Board finds that additional development is warranted to address the merits of the Veteran's claims. The Veteran asserts that a waiver of overpayment should be granted because VA has known since 1992 that he was incarcerated because, starting in 1992, VA began mailing to him, at his prison address, an annual summary of the amount due on a VA home loan guarantee indebtedness that had been incurred in the late 1980's. The Veteran also states that he thought his (criminal defense) attorney had notified VA in 1992 of his incarceration and, therefore, no further action was required on his behalf. Neither a review of the VA home loan guarantee folder or the other documentation of record, however, including the Compensation and Pension award coding sheets, contains copies of these annual summary notices or the address to which they were mailed. Because any such notices created by VA would clearly be in the possession of VA, and therefore should be of record, and because confirmation of the Veteran's allegation would have an impact on assigning fault if were to be confirmed that VA had indeed starting sending notices of indebtedness to the prison address starting in 1992, a remand is required for purposes of attempting to obtain copies of any such notices. Additionally, on remand, the Agency of Original Jurisdiction (AOJ) should again contact the Veteran and request that he submit a completed VA Form 5655, Financial Status Report. While the AOJ sent a request to the Veteran in February 2008 to submit this form, no response was received from him. In view of the other required reasons for remand, the Veteran should again be requested to complete and return this form for purposes of supporting his waiver of indebtedness request. In that regard, he is reminded that "the duty to assist is not always a one-way street. If a Veteran wishes help, he cannot passively wait for it in those circumstances where he may or should have information that is essential in obtaining the putative evidence." Wood v. Derwinski, 1 Vet. App. 190, 192 (1991); see also Olson v. Principi, 3 Vet. App. 480, 483 (1992). Accordingly, this case is remanded to the AOJ for the following actions: 1. The AOJ should attempt to obtain copies of all notices of indebtedness sent to the Veteran by VA from the late 1980's until around 1999 concerning the debt owed on a VA home loan guarantee indebtedness. If such records only exist as part of electronic coding sheets, or copies of the actual notices, if any, are not available, the AOJ should obtain a memorandum from an appropriate source which summarizes what notices were sent, and to what address(es), for the period of 1992 to 1999 concerning the loan guarantee indebtedness, including whether notice was sent to the prison address. 2. Additionally, the AOJ should obtain a memorandum from an appropriate source which discusses to what address or addresses the Veteran's VA disability compensation checks were sent during the period of 1992 to 1999, including whether the checks were being deposited electronically or not, and whether any payments or amounts of payments were withheld by VA for payment of the loan guaranty indebtedness. 3. The Veteran should be requested to submit a VA Form 5655, Financial Status Report. 4. Following the completion of the above, the AOJ should readjudicate the Veteran's claim. If any claim remains denied, the AOJ should issue an appropriate SSOC and provide an opportunity to respond. A Veteran has the right to submit additional evidence and argument on a matter the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369, 370 (1999) (per curiam). This claim must be afforded expeditious treatment. The law requires that all claims that are remanded by the Board of Veterans' Appeals or by the United States Court of Appeals for Veterans Claims for additional development or other appropriate action must be handled in an expeditious manner. See 38 U.S.C.A. §§ 5109B, 7112. ____________________________________________ Richard C. Thrasher Acting Veterans Law Judge, Board of Veterans' Appeals Under 38 U.S.C.A. § 7252, only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Appeals for Veterans Claims. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b).