Citation Nr: 1127223 Decision Date: 07/21/11 Archive Date: 07/29/11 DOCKET NO. 06-30 780 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in North Little Rock, Arkansas THE ISSUE Entitlement to additional retroactive payment for dependency and indemnity compensation (DIC) benefits. REPRESENTATION Appellant represented by: The American Legion WITNESS AT HEARING ON APPEAL Appellant ATTORNEY FOR THE BOARD R. Erdheim, Associate Counsel INTRODUCTION The Veteran had active military service from September 1968 to July 1970; he died in August 2000. The appellant is the Veteran's surviving spouse; her claim for service connection for DIC benefits was granted in a rating decision issued by the RO in April 2005. The effective date for that grant of service connection was in August 2000. This case comes before the Board of Veterans' Appeals (Board) on appeal of a retroactive payment for DIC benefits in the amount of $67,458.93 that was paid out in April 2005. In December 2007, a Travel Board hearing was held at the RO before the undersigned Veterans Law Judge who was designated by the Chairman to conduct that hearing, pursuant to 38 U.S.C.A. § 7107. A transcript of that hearing has been associated with the claims file. This case was previously before the Board in June 2008 and was remanded for further development. The Board finds that the agency of original jurisdiction (AOJ) substantially complied with the remand orders and no further action is necessary in this regard. See Dyment v. West, 13 Vet. App. 141, 146-47 (1999) (remand not required under Stegall v. West, 11 Vet. App. 268 (1998), where the Board's remand instructions were substantially complied with), aff'd, Dyment v. Principi, 287 F.3d 1377 (2002). Specifically, on remand, the RO made use of the Board's provided table to conduct an accounting of the Veteran's payments, and also included a separate table of their own making. Accordingly, the Board finds that no further development is necessary with regard to the appellant's claim. FINDINGS OF FACT 1. In July 2000, the appellant was granted death pension benefits, effective June 3, 2000. Notice of her entitlement was accompanied by information that set forth factors affecting the right to payment. 2. In April 2002 and in October 2002, the RO learned of alternate sources of income for which the appellant was in receipt and advised the appellant of a reduction of, and possible overpayment of, death pension benefits. 3. The appellant's death pension benefits were terminated effective May 1, 2001, resulting in an overpayment of $23,095.00. For the period from June 3, 2000, to May 1, 2001, the appellant was entitled to $5,986.00 in death pension benefits. 4. In April 2005, the appellant was granted service connection for DIC benefits, effective August 10, 2000. The appellant was due a retroactive award of $96,539.00. 5. When deducting the assessed overpayment and monies already paid to the appellant, a balance of $67,458.93 was due and paid to the appellant. 6. The appellant was provided with due notice of the collection of the overpayment from the April 2005 retroactive award. The appellant did not file a timely waiver of indebtness with regard to repayment of the debt, and no undue hardship has been shown in collecting the debt. CONCLUSION OF LAW The recovery of the death pension indebtedness in the amount of $23,095.00 from the $97,702.93 retroactive DIC payment was proper. 38 U.S.C.A. §§ 5107, 5314 (West 2002 & Supp. 2010); 38 C.F.R. § 1.911, 1.912(a), 1.963(a) (2010). REASONS AND BASES FOR FINDINGS AND CONCLUSION I. VA's Duties to Notify and Assist The Veterans Claims Assistance Act of 2000 (VCAA) and implementing regulations impose obligations on VA to provide claimants with notice and assistance. 38 U.S.C.A. §§ 5102 , 5103, 5103A, 5107 (West 2002 & Supp. 2010); 38 C.F.R §§ 3.102, 3.156(a), 3.159, 3.326(a) (2010). In this case, VA has met all statutory and regulatory notice and duty to assist provisions. Specifically, the Board finds that the appellant was provided with reasonable notice of the adjustment to, and termination of, her death pension benefits, and the overpayment subsequently created. The Board also finds that the appellant was provided with reasonable notice with regard to the withholding of the previous overpayment from the April 2005 retroactive DIC award. In particular, in October 2000, April 2002, and October 2002, the appellant was informed of the monthly rate, and adjustments to the monthly rate, at which she would receive death pension benefits based upon her current income. She was also informed of the factors affecting her right to payment, including her obligation to notify the VA of a change to her income and the possibility of an overpayment in that instance. In April 2002, the appellant was informed of her right to request wavier of any overpayment. Additionally, she received notice in October 2002 of the proposal to terminate her monthly death pension benefits, and of her right to submit additional evidence or to request a personal hearing prior to the termination of benefits. In January 2003, the appellant was notified of the reduction and termination of her death pension benefits, and she was advised that an overpayment had occurred on her account. In April 2005, the appellant was notified that any retroactive payment of her DIC award due would be offset by the collection of any withholdings. In the August 2006 statement of the case and in the July 2009 supplemental statement of the case, the appellant was further notified of the figures used to offset her retroactive award by the overpayment and monies already paid. Further, during the appeal period, she has been furnished with two accountings upon which her retroactive DIC award was based. Thus, the Board finds that the appellant has been properly notified and informed as to the decisions made with regard to the payment of her death pension benefits and her DIC benefits. 38 U.S.C.A. § 5103(a) (West 202 & Supp. 2010; 38 C.F.R. § 3.159(b)(1); Quartuccio v. Principi, 16 Vet. App. 183, 187 (2002). As the issue on appeal is controlled by the appellant's level of annual income, there is no medical controversy and development of any medical evidence would have no bearing on the decision. The appellant has provided financial information for the period in question, and VA has obtained her annual Social Security Administration (SSA) income information and her annual Civil Service Retirement and Disability (Civil Service) income information. 38 U.S.C.A. § 5103A, 38 C.F.R. § 3.159. There is no indication in the record that any additional evidence, relevant to the issue decided herein, is available or is not part of the claims file. Pelegrini v. Principi, 18 Vet. App. 112 (2004). As there is no indication that any failure on the part of VA to provide additional notice or assistance reasonably affects the outcome of the case, the Board finds that any such failure is harmless. See Mayfield v. Nicholson, 19 Vet. App. 103, 121 (2005), rev'd on other grounds, 444 F.3d 1328 (Fed. Cir. 2006); see also Dingess/Hartman v. Nicholson, 19 Vet. App. 473 (2006). II. Analysis The appellant contends that when she was awarded DIC benefits in April 2005, she should have received a retroactive payment that was at least $30,000.00 higher than was issued to her. She contends that she was not properly notified that a previous overpayment, based upon receipt of death pension benefits, would be deducted from the retroactive payment, and thus the deduction was improper. By way of history, following the death of the Veteran in August 2000, the appellant was awarded death pension benefits, effective September 1, 2000. Death pension benefits are generally available for surviving spouses, as a result of the veteran's nonservice-connected death. 38 U.S.C.A. § 1541(a) (West 2002). A surviving spouse awarded death pension benefits will be paid the maximum rate of death pension, reduced by the amount of countable income. 38 U.S.C.A. § 1541; 38 C.F.R. § 3.23. In determining income for this purpose, payments of any kind from any source are counted as income during the 12-month annualization period in which received unless specifically excluded. 38 U.S.C.A. § 1503; 38 C.F.R. § 3.271. In determining annual income, all payments of any kind or from any source including salary, retirement or annuity payments, or similar income, which has been waived, shall be included except for listed exclusions. 38 U.S.C.A. § 1503(a); 38 C.F.R. § 3.271(a). Exclusions from income include the expenses of the veteran's last illness and burial and for the veteran's just debts, debts not incurred to secure real or personal property, if paid by the appellant. 38 C.F.R. § 3.272(h). Such expenses may be deducted only for the 12- month annualization period in which they were paid. 38 C.F.R. § 3.272(h). Exclusions from income do not include Social Security disability benefits. 38 C.F.R. § 3.272. That income is therefore included as countable income. Medical expenses in excess of five percent of the maximum income rate allowable, which have been paid, may be excluded from an individual's income for the same 12-month annualization period, to the extent they were paid. 38 C.F.R. § 3.272(g)(1)(iii). The rates of death pension benefits are published in tabular form in appendix B of Veterans Benefits Administration Manual M21-1 (M21-1), and are given the same force and effect as if published in the Code of Federal Regulations. 38 C.F.R. § 3.21. At the time that the appellant was granted death pension benefits, she had reported to the VA that she and her four children received no income and had no savings. She reported no medical expenses. Thus, she was awarded the applicable monthly rate for death pension benefits when counting herself and four dependent children, $1,040.00 per month. In December 2000, that amount was increased to $1,077.00 per month based upon a cost of living increase. In March 2002, the RO received information that the appellant was receiving Social Security Administration (SSA) payments, and a request for clarification was sent to the SSA. The SSA reported that the appellant has been receiving benefits in the amount of $113.00 per month for the year of 2002. Subsequently, the RO learned that the appellant had begun to receive Civil Service Retirement and Disability (Civil Service) payments. Verification with the Office of Personnel Management demonstrated that beginning in December 2000, the appellant was awarded benefits in the amount of $506.00 per month. In April 1, 2001, the amount was increased to $1,514.00 for herself and her dependent children. There is no indication that the appellant informed the VA of this additional income. In April 2002, the RO sent a letter to the appellant with notice that because her countable income had increased to $1,356.00 per year, based solely upon her SSA benefits, her death pension benefits would necessarily be decreased to $993.00 per month, effective January 1, 2002. In October 2002, the RO proposed to decrease and then terminate the appellant's death pension benefits, explaining that her SSA income and Civil Service income exceeded the maximum allowable rate for death pension benefits. In January 2003, her death pension benefits were decreased to $585.00 per month, effective January 1, 2001, to $34.00 per month, effective April 1, 2002, and then were terminated, effective May 1, 2002, based upon her income for those months. Specifically, in January 2001, the appellant's countable income was $5,905.00 per month. When subtracting that amount from the maximum allowable income for 2001, $12,926.00, divided by 12, a $585.00 monthly payment was appropriate. Similarly, because her income was calculated to be $12,507.00 beginning in March 2001, when subtracting that amount from the maximum allowable income for 2001, $12,926.00, divided by 12, a $34.00 monthly payment was appropriate. Finally, beginning in April 2001, when the appellant's dependent children were added to her Civil Service income, her total income was calculated to be $24,603.00, which exceeded the maximum allowable income for entitlement to pension for a spouse with four dependants in April 2001, and thus payments were terminated. Because the appellant's death pension benefits were adjusted based upon her income, an overpayment occurred, and the appellant was notified of the occurrence in January 2003. Specifically, whereas she received $1,077.00 per month from January 2001 to March 2002, and then $993.00 per month from April 2002 to December 2002, she should have instead received $585.00 per month from January 2001 to March 2001, $34.00 in April 2001, $0.00 from May 2001 to December 2002, when payments were terminated. Accordingly, an overpayment of $23,095.00, was created. The Board notes that in reviewing this case, and when calculating the amount of overpayment determined by the RO, a discrepancy arose. For, the Board has calculated that the overpayment amount was in fact $23,303.00. In so doing, the Board calculated the difference of the benefits actually paid to the Veteran from January 2001 to December 2002 against the payments to which she was actually entitled. Specifically, from January 2001 to March 2001, there was a difference of $492.00 per month ($1,077.00 - $585.00). In April 2001, there was a difference of $1,043.00 ($1,077.00 - $34.00). From May 2001 to March 2002, there was a difference of $1,077.00 per month ($1,077.00 - $0.) Finally, from April 2002 to December 2002, there was a difference of $993.00 per month ($993.00 - $0.) However, in resolving the benefit of the doubt in favor of the Veteran, the lower $23,095.00 amount determined by the RO will be used in rendering the decision on appeal. Further, the Board has no reason to doubt that figure, along with the computation of the appellant's income for the period in question, because on numerous accountings completed throughout the appeal period, those numbers have remained consistent. Accordingly, after determining that an overpayment in the amount of $23,095.00 was in fact created from the period from January 2001 to December 2002, the next question before the Board is whether that overpayment was correctly withheld from the April 2005 award of retroactive DIC benefits. In that regard, the Board turns to the two audits that were prepared for review on remand. Those audits agree with one another in the determination that no further monies are due to the appellant. The audits demonstrate that, without taking into account any adjustments or withholdings, the appellant was entitled to a payment of $96,539.00 for the retroactive award of DIC benefits. That figure was calculated based upon the monthly disability benefits warranted for each year since August 2000, with cost living adjustments as well as adjustments for when the minor children reached the age of 18. Next, the audits indicate that a figure of $5,986.00 was deducted from the $96,539.00 retroactive payment. The $5,986.00 represented the death pension benefits that the appellant was actually entitled to, or, $1,040.00 from September 2000 to November 2000, $1,077.00 for the month of December 2000, $585.00 from January 2001 to March 2001, and $34.0 for the month of April 2001. Such was deducted because the appellant is not entitled to received both a death pension award and a DIC award concurrently by law. See 38 C.F.R. § 3.700. The appellant has been notified of the law in that regard. Thus, the remaining balance was $90,553.93. When further deducting the death pension overpayment, $23,095.00, the appellant was left with $67,458.93, the amount that she received in April 2005. Thus, after carefully reviewing the claims file, it appears that as a matter of law, there are no further monies to which the appellant is entitled. Lastly, the appellant contended at her December 2007 hearing before the Board that she did not receive proper notice that the death pension overpayment was to be withheld from the April 2005 retroactive award. In this case, although the issue of whether the appellant is entitled to waiver of the overpayment is not properly before the Board, a brief discussion of that theory appears pertinent to the appellant's claim. To that extent, the Board initially finds that no timely claim for waiver of the recovery of the death pension indebtness was filed. 38 U.S.C.A. § 5302(a) (West 2002); 38 C.F.R. § 1.963(b)(2) (2010). Thus, no relief is available under that criteria. Next, the Board finds that, as explained more thoroughly above, the appellant received notice both that she should report any change of income to the VA immediately to prevent an overpayment and that, later, an overpayment had in fact been created. She was also informed of her rights and responsibilities to refute the overpayment. She was also provided with an explanation as to why the April 2005 retroactive award was lower than she had imagined in a February 2006 telephone conversation and in the August 2006 statement of the case and the July 2009 supplemental statement of the case. Finally, in considering the totality of the evidence of record, the Board finds that recovery of the overpayment was accomplished in equity and good conscience. The phrase equity and good conscience means the arrival 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, (2) balancing of faults between the debtor and VA, (3) undue hardship of collection on the debtor, (4) defeat of the purpose of an existing benefit to the appellant, (5) unjust enrichment of the appellant, and (6) whether the appellant changed positions to his or her detriment in reliance upon a granted VA benefit. 38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. § 1.965(a) (2010). However, the Board finds that, as discussed above, the overpayment was created by the fault of the appellant, and not the VA. Once the VA was informed of the appellant's increased income, by sources other than the appellant, the VA took the necessary steps to adjust and then terminate the appellant's death pension benefits, notifying the appellant of the creation of the overpayment. Further, the Board is cognizant that the collection of the overpayment in April 2005 was from a large retroactive payment not yet given to the appellant. In other words, the appellant did not owe the VA monies from her own salary or savings, but rather, the monies were deducted from a large award that she had not yet received. At her hearing before the Board, the appellant further testified that she had in no way relied upon the higher figure to her detriment, i.e. signed a contract based upon the projected retroactive amount. Therefore, for these reasons, the Board finds that undue hardship is not shown in this case. Accordingly, the Board finds that there is no indication that collecting the overpayment from the April 2005 retroactive DIC award was inequitable or placed undue hardship on the appellant. In sum, when all the factors are considered as set forth in the above analysis, the weight of the evidence demonstrates that no additional retroactive payment is due to the appellant. Further, the VA properly withheld the Veteran's previous death pension overpayment from the April 2005 retroactive DIC award. Therefore, the claim must be denied. ORDER Entitlement to additional retroactive payment for DIC benefits is denied. ____________________________________________ C. TRUEBA Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs