Citation Nr: 1124865 Decision Date: 06/30/11 Archive Date: 07/06/11 DOCKET NO. 10-01 263 ) DATE ) ) On appeal from the Department of Veterans Affairs (VA) Regional Office in Louisville, Kentucky THE ISSUES 1. Whether the overpayment of VA benefits in the amount of $14,125.00 due to a change in the Veteran's marital status was properly created. 2. Entitlement to waiver of overpayment of VA compensation benefits due to a change in the Veteran's marital status in the amount of $14,125. REPRESENTATION Appellant represented by: Kentucky Department of Veterans Affairs WITNESS AT HEARING ON APPEAL The Veteran ATTORNEY FOR THE BOARD Suzie S. Gaston, Counsel INTRODUCTION The Veteran served on active duty from June 1968 to July 1974 and from June 1978 to April 1989. This matter comes before the Board of Veterans' Appeals (hereinafter Board) on appeal from a February 2009 determination by the Louisville, Kentucky, Regional Office (RO), which determined that an overpayment of VA benefits in the amount of $14, 125.00 was made to the veteran due to change in his marital status. In September 2010, the Veteran appeared at the Louisville RO and testified at a videoconference hearing before the undersigned, sitting in Washington, DC. A transcript of the hearing has been associated with the claims file. The Board notes that while the Veteran has requested a waiver of the overpayment in question, the statement of the case did not address the waiver issue, and the Board's decision is limited to the issue of whether the overpayment was properly created. The issue of entitlement to a waiver of recovery of an overpayment of compensation benefits in the amount of $14, 125 is addressed in the REMAND portion of the decision below and is REMANDED to the RO via the Appeals Management Center (AMC), in Washington, DC. FINDINGS OF FACT 1. The Veteran married his former wife M. M. J. in December 1965. 2. By rating decision of December 1989, the Veteran was granted service connection for several disabilities; the total disability rating was 60 percent, effective April 25, 1989; additional benefits were included for a dependent spouse. 3. By letters dated in February 1990, April and May 1991, and February 1998, the RO advised the Veteran that additional benefits had been included in his compensation for his spouse, and that he must tell VA immediately if there were any changes in the number or status of his dependents. He was further advised that failure to promptly tell VA of a dependency change would result in an overpayment of his benefits, which would have to be repaid by him. 4. The Veteran obtained a divorce from M. M. J. on August [redacted], 2000, and on August [redacted], 2000, he married C. B. S. 5. The Veteran did not inform VA of his divorce or his remarriage until November 2008, when he responded to the RO's request to verify his continued entitlement to additional benefits for a dependent spouse. 6. The RO retroactively terminated payment of additional benefits on behalf of the previous dependent spouse effective August 1, 2000, and did not grant additional benefits on behalf of the new dependent spouse until December 1, 2008. 7. For the period from August 1, 2000 to December 1, 2008, the Veteran received dependency benefits for "M. M. J." to which he was not entitled because he was not married to her at that time; this resulted in an overpayment to the Veteran of $14,125. 8. VA was not solely at fault in the creation of the debt. CONCLUSION OF LAW An overpayment of compensation benefits in the amount of $14,125 was properly created. 38 U.S.C.A. §§ 5107, 5110, 5111, 5112 (West 2002 & Supp. 2010); 38 C.F.R. §§ 3.400, 3.401, 3.500, 3.501, 3.660 (2010). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. Veterans Claims Assistance Act of 2000. The VCAA, codified in part at 38 U.S.C.A. §§ 5103, 5103A, and implemented in part at 38 C.F.R § 3.159, amended VA's duties to notify and to assist a claimant in developing information and evidence necessary to substantiate a claim. The VCAA duties to notify and to assist do not apply to the claim for relief under Chapter 53 of Title 38 of the United States Code, pertaining to waiver of recovery of overpayments, which includes the validity of the debt. See Schaper v. Derwinski, 1 Vet. App. 430 (1991) (challenging validity of debt); see Reyes v. Nicholson, 21 Vet. App. 370 (2007) (the notice provisions of 38 U.S.C. § 5103(a) do not apply to chapter 53 proceedings (special provisions for the waiver of recovery of overpayments), citing Barger v. Principi, 16 Vet. App. 132 (2002)). II. Factual background. The Veteran filed an original claim for disability benefits with the VA in July 1989. On the claim form, he reported that he was married to M. M. J.; they were married on December [redacted], 1965. He also provided a copy of the marriage certificate, showing that he and M. M. J. were married on December [redacted], 1965. By a rating action in December 1989, the RO granted service connection for bipolar affective disorder, evaluated as 50 percent disabling, hypertension, evaluated as 10 percent disabling, closed head injury with headaches, evaluated as 10 percent disabling, and hallux rigidus, right foot, and hallux rigidus, left foot, each evaluated as 0 percent disabling. A combined evaluated of 60 percent was assigned effective April 25, 1989. By letter dated in February 1990, the Veteran was informed that the compensation benefits he was receiving included an additional amount for his spouse and child. He was also informed that he must tell the VA immediately if there was any change in the number or status of his dependents. He was advised that any failure to inform the VA of a dependency change would result in the creation of an overpayment in his account. Similar notice was provided to the Veteran in April and May 1991. By letter dated in February 1998, the Veteran was informed that the compensation benefits he was receiving included an additional amount for his spouse and child, and he was responsible for reporting any changes in the number of his dependents. The Veteran was informed that in order to verify his continued entitlement to the additional benefits, he must complete and return the status of dependents questionnaire. He was informed that if the number of dependents has changed, to include the loss or addition of a dependent, the VA would reduce or increase the payments accordingly. On a status of Dependency Questionnaire (VA Form 21-0538), dated in March 1998, the Veteran confirmed that he was married to M. M. J.; he noted that they were married on December [redacted], 1965. By letter dated in February 2008, the Veteran was informed that VA had sent a form asking about his dependents, and they had not received a response. Therefore, the VA proposed to reduce his compensation benefits. Similar letters were sent to the Veteran in August 2008 and November 2008. Received in November 2008 was a declaration of status of dependents (VA Form 21-686c), wherein the Veteran indicated that he was divorced from M. M. J.; he also indicated that he and C. B. S. were married on August [redacted], 2000 and they were still married. In a statement in support of claim (VA Form 21-4138), dated November 17, 2008, the Veteran indicated that his marriage to M. M. J. lasted from 1965 until July 2000; he then married C. B. S. in August 2000 and they are still married. Therefore, he argues that he has had a dependent spouse from 1965 until the present, with the exception of one week in 2000. In February 2009, the RO retroactively terminated payment of additional benefits on behalf of the previous dependent spouse effective August 1, 2000, and did not grant additional benefits on behalf of the new dependent spouse until December 1, 2008. This action resulted in an overpayment of $14,125. The Veteran challenged the dates of the termination and subsequent reinstatement of benefits on behalf of a dependent spouse. The Veteran indicated that he never received a form to change his dependents. In addition, the Veteran argued that while the name of his wife changed, the number of his dependents remained unchanged; he stated that his divorce from M. M. J. in July 2000 occurred almost simultaneously with his marriage to C. B. S. in August 2000. At his personal hearing in September 2000, the Veteran reported that the time frame between his divorce from M. M. J. and his marriage to C. B S. was only a 7 day period. The Veteran stated that he did not notify the VA because there was virtually no break during which time his marital status actually changed. It was argued that the notices just advised to report a change in status; he stated that in his mind, there really was no change because he was continuously married, though not to the same person. The Veteran maintained that he should not lose the equivalence of two years of pay because of what happened in one week; he stated that he should not be penalized for a technicality. III. Legal analysis. In this case, the Veteran contends that there should be no overpayment established from August 1, 2000 to December 1, 2008 since he was actually married during that time period. The Veteran maintains that the only thing that changed was the name of his dependent rather than the number of dependents; therefore, the status of his dependents never changed. The law provides for the rates of disability compensation, and for payment of additional compensation for dependents of veterans who are at least 30 percent disabled. 38 U.S.C.A. §§ 1114(c), 1115, 1134, 1135. During the period relevant to this issue, the Veteran had a combined evaluation for compensation of 60 percent disabling from April 25, 1989 for his service- connected disabilities. Under 38 U.S.C.A. § 5112(b)(2), the effective date of reduction or discontinuance of compensation by reason of divorce of a dependent of a payee shall be the last day of the month in which such divorce occurs. See also 38 C.F.R. § 3.501(d) (2). The effective date of the award of any benefit or increase by reason of marriage shall be the date of that event if proof is received by VA within a year from the date of marriage. 38 U.S.C.A. § 5110(n). Under 38 C.F.R. § 3.401(b), the effective date for the award of additional compensation for a dependent is the latest of (1) the date of claim, which is either the date of his marriage, if evidence of the event is received within one year of the event, or the date notice is received of the dependent's existence, if evidence is received within one year of VA's request; (2) the date the dependency arises; (3) the effective date of the qualifying disability rating, provided evidence of dependency is received within one year of notification of such rating action; or (4) the date of commencement of the Veteran's award. Applying the foregoing regulation to the facts of the present case, the Board finds that overpayment of additional benefits on behalf of a dependent spouse was properly created. There can be no dispute that the effective date of termination of additional benefits for M. M. J. was the date of divorce in July 2000. See 38 C.F.R. § 3.501(d) (2) which provides that benefits discontinue the last day of the month in which the divorce occurred. The only real dispute in this case is when the benefits on behalf of the second dependent spouse should commence. Under the foregoing law and regulation, the date of benefits is not the date of marriage, but rather the date the VA is notified of the marriage. The only exception to that rule is where notification is received by VA within a year of the marriage. That exception does not apply in this case. The RO properly terminated benefits effective August 1, 2000, and did not reinstate dependent benefits until the date of receipt of notice of the remarriage which was received in November 2008. Thus, the overpayment of additional benefits on behalf of a dependent spouse was properly created. The Veteran divorced in July 2000 and remarried in August 2000 but did not inform VA of the remarriage until November 2008. During the period from September 1, 2000 to November 2008 the Veteran received disability compensation that included an additional payment for a dependent spouse. The record does not disclose that the veteran informed VA of his divorce and subsequent remarriage any earlier than the November 2008 date. In sum, applicable regulations specify that the Veteran was not entitled to additional compensation benefits on account of having M. M. J. as a dependent as of July 31, 2000. He nevertheless received such benefits for M. M. J. until November 2008. There is no persuasive evidence showing that he notified VA of, or that VA was otherwise aware of, his divorce from M. M. J. until at least November 2008. Nor is there otherwise any indication of administrative error on the part of VA. Applicable regulations also provide that he was not entitled to additional compensation benefits for C. B. S. until at least November 2008. Based on these facts, and the applicable regulations governing the effective date of the removal of M. M. J. from the Veteran's award, the overpayment at issue was properly created. Therefore, the debt was properly created and was properly calculated in the amount of $14,125; the weight of the evidence is against the claim and the appeal is denied. ORDER The overpayment of compensation benefits for a dependent spouse in the amount of $14,125.00 was properly created, and the appeal is denied. REMAND The record indicates that, in a July 2009 decision, the Committee on Waivers at the RO denied entitlement to waiver of recovery of a debt due to overpayment of compensation to the Veteran due to the change of marital status. In a statement in support of claim, dated in August 2009, the Veteran has also expressed disagreement with the RO's denial of waiver of overpayment of VA compensation in the amount of $14,125. However, the December 2009 statement of the case (SOC) only addresses the validity of the debt issue. The United States Court of Appeals for Veterans Claims (Court) has held that where a notice of disagreement has been filed with regard to an issue, and a statement of the case has not been issued, the appropriate Board action is to remand the issue to the agency f original jurisdiction for issuance of a statement of the case. Manlincon v. West, 12 Vet. App. 238 (1999). Thus this claim is being remanded for issuance of a statement of the case and to give the Veteran the opportunity to complete an appeal. 38 U.S.C.A. § 7105 (West 2002); 38 C.F.R. § 19.26 (2010); See Manlincon v. West, 12 Vet. App. 238 (1999). Additionally, the Board notes that the November 2008 financial statement from the Veteran is more than two years old. As his circumstances may have since changed, new financial information would be needed in order to adjudicate the waiver issue if it is perfected on appeal. Thus, the Veteran should also be asked to provide a VA Form 20-5655, Financial Status Report, which reflects his current financial situation. Under the circumstances of this case, further assistance is required. Accordingly, the case is REMANDED to the RO for the following development and consideration: 1. The Veteran should be furnished another Financial Status Report (VA Form 20-5655) and given an opportunity to provide current income and expense data, for review by the Committee on Waivers and Compromises. 2. The Veteran should be provided a Statement of the Case which addresses the issue of entitlement to waiver of recovery of an overpayment of compensation benefits. If, and only if, the appeal is perfected by a timely filed substantive appeal, this issue should be certified to the Board. The case should then be returned to the Board for further appellate review, if otherwise in order. No action is required of the appellant unless he is notified. The purposes of this remand are to ensure notice is complete, and to assist the Veteran with the development of his claim. The appellant has the right to submit additional evidence and argument on the matter or matters the Board has remanded. Kutscherousky v. West, 12 Vet. App. 369 (1999). 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 (West Supp. 2010). ______________________________________________ L. M. BARNARD Acting Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs