Citation Nr: 1121392 Decision Date: 06/02/11 Archive Date: 06/09/11 DOCKET NO. 09-32 227A ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in New Orleans, Louisiana THE ISSUE Entitlement to a waiver of recovery of overpayment of additional compensation benefits for a spouse in the amount of $1,340, to include the preliminary issue of the validity of the debt. REPRESENTATION Appellant represented by: Stephen C. Resor, Attorney at Law WITNESS AT HEARING ON APPEAL The Veteran ATTORNEY FOR THE BOARD Paul S. Rubin, Counsel INTRODUCTION The Veteran served on active duty from June 1944 to April 1945. The "validity of the debt" matter comes before the Board of Veterans' Appeals (Board) on appeal from an October 2008 decision of the Department of Veterans Affairs (VA) Regional Office (RO) New Orleans, Louisiana. The "waiver" matter comes before the Board of Veterans' Appeals (Board) on appeal from a March 2009 administrative decision by the Committee on Waivers and Compromises (Committee) of the RO in Milwaukee, Wisconsin. Ultimate jurisdiction of both issues on appeal was transferred to the RO in New Orleans, Louisiana, which is closer to the Veteran's current domicile. In March 2011, the Veteran presented testimony at a hearing before the undersigned Veterans Law Judge at the RO (Travel Board hearing). Please note this appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2010). 38 U.S.C.A. § 7107(a)(2) (West 2002). FINDINGS OF FACT 1. The Veteran has been in receipt of service-connected compensation benefits for a left shoulder and left arm muscle injury, rated as 30 percent disabling since September 11, 1946, entitling him to additional compensation payments for dependents. 2. VA made the Veteran aware that he must promptly advise VA of changes in marital status and changes in dependency status, in order to continue with his additional compensation benefits. 3. The Veteran married his former wife S.B. in August 1976. He divorced her in July 1995. 4. The Veteran married his current wife E.H. in November 1995. 5. VA did not become aware of the Veteran's divorce and remarriage until four years later in November 1999, when the Veteran informed VA of his remarriage. 6. An overpayment was created because the Veteran was receiving additional VA compensation benefits for his former spouse S.B. from August 1995 to December 1999 to which he was not entitled, since they were divorced during this time. 7. The overpayment was not the result of sole VA administrative error; moreover, the Veteran's failure to advise VA of his divorce and remarriage in 1995 contributed to the creation of the debt. Simply stated, the Veteran should not have waited until 1999 to report his divorce and remarriage. 8. There is no evidence of fraud, misrepresentation, or bad faith on the Veteran's part in the creation of this debt. 9. Recovery of the overpayment by VA would not be against equity and good conscience. CONCLUSIONS OF LAW 1. The overpayment of additional VA compensation benefits for a spouse in the amount of $1,340 from August 1995 to December 1999 was legally created, and was not based upon sole VA administrative error, such that the debt was valid. 38 U.S.C.A. §§ 1115, 5110, 5112, 5302 (West 2002 & Supp. 2010); 38 C.F.R. §§ 1.911, 1.956, 1.962, 3.4(b), 3.401, 3.500, 3.501, 3.660 (2010). 2. Recovery of the overpayment of additional VA compensation benefits for a spouse, in the calculated amount of $1,340, would not be against equity and good conscience. 38 U.S.C.A. §§ 5107, 5302(a) (West 2002 & Supp. 2010); 38 C.F.R. §§ 1.962, 1.963(a), 1.965(a) (2010). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS VA's Duty to Notify and Assist The Veterans Claims Assistance Act of 2000 (VCAA), codified at 38 U.S.C.A. §§ 5100, 5102-5103A, 5106, 5107, 5126 (West 2002 & Supp. 2010), imposes obligations on VA in terms of its duties to notify and assist claimants. But the U. S. Court of Appeals for Veterans Claims (Court) has held that the VCAA is not applicable to claims for waiver of recovery of overpayment. Reyes v. Nicholson, 21 Vet. App. 370, 379-380 (2007); Barger v. Principi, 16 Vet. App. 132, 138 (2002). See also Lueras v. Principi, 18 Vet. App. 435 (2004) (the VCAA does not apply to a waiver). Although the VCAA does not apply, the Board sees that the Agency of Original Jurisdiction (AOJ) nonetheless notified the Veteran of the relevant regulations, discussed the relevant evidence, and explained its decision in its March 2009 Committee Decision, November 2009 Committee Decision, November 2009 Statement of the Case (SOC), August 2009 SOC, and February 2010 Supplemental Statement of the Case (SSOC). Further, the Veteran was sent a September 2008 VA Debt Management Center (DMC) letter with enclosure, which notified him of the amount of his debt and informed him of his appellate rights - including his right to a hearing. Moreover, the VA letters throughout the appeal provided him with information and analysis regarding the specifics of obtaining recovery of this debt. He has not identified any additional evidence that needs to be obtained. He has provided written statements in support of his claim, financial information, attorney argument, and hearing testimony. So he has been appropriately notified of the governing regulations and given the opportunity to submit any additional evidence he might have to support his request. Thus, the Board will now address the merits of the Veteran's validity of the debt and waiver requests. Pertinent Facts The Veteran has been in receipt of service-connected compensation benefits for a left shoulder and left arm muscle injury, rated as 30 percent disabling since September 11, 1946. The Veteran was married to S.B. in August 1976. Since he had a 30 percent service-connected disability rating, over the years he was in receipt of additional compensation benefits for his spouse, S.B. As early as May 1950 and January 1951, the Veteran submitted Declarations As to Marital Status (VA Form 8-686(c)), after being awarded VA compensation. In March 1988, VA sent the Veteran a notice letter informing him that he may be entitled to additional compensation for a spouse, children, or parents, and to submit the necessary forms. The Veteran responded by submitting an April 1988 Declaration of Status of Dependents (VA Form 21-686(c)). The VA responded with an April 1988 VA award letter (VA Form 20-8993), in which the Veteran was awarded additional compensation benefits for his spouse. The Veteran was advised that any change in the number or status of dependents must be reported promptly to VA. Also enclosed was a Disability Award Attachment Important Information (VA Form 21-8764) which also advised that since the Veteran had a 30 percent disability rating, he must promptly advise of any change in the status of dependents. An October 1991 VA award letter also advised that for the Veteran to continue to receive additional compensation for dependents, he must complete a form listing his dependent children or spouse. The Veteran responded with a November 1991 Status of Dependents Questionnaire. In light of the above, overall, the Veteran was made aware that he must promptly advise VA of changes in marital status and changes in dependency status, in order to continue with his additional compensation benefits. The Veteran divorced S.B. in July 1995. He was unmarried from August 1995 to November 1995. The Veteran remarried in November 1995, this time to E.H. However, he did not notify VA of his divorce or remarriage until four years later in November 1999, when he filed Declaration of Status of Dependents (VA Form 21-686(c)). In the November 2009 SOC, for the time period from August 1995 through November 1999, VA determined that there was an overpayment of $1,340, due to the Veteran's receipt of additional compensation benefits for his spouse S.B., even though he was not married to her during that time. In the November 2009 SOC, for the subsequent period from November 1999 to December 2007, VA returned the overpayment of $3,636 to the Veteran since the Veteran was married to E.H. during this time period, and had notified VA of his marriage to E.H. in November 1999. VA found that the previous overpayment for this time period was due to sole administrative error by VA, since VA was advised of the Veteran's remarriage in November 1999, but failed to act. The overpayment from November 1999 to December 2007 was restored to the Veteran and is therefore no longer at issue. The Veteran and his attorney concede that the Veteran is not entitled to restoration of the overpayment for the 3-4 months he was unmarried from August 1995 through November 1995; for that reason, they state VA can keep that portion of the overpayment. However, they argue that the subsequent overpayment from December 1995 to December 1999 should be restored, since the Veteran was married to E.H. during that time, even if VA did not have notice of the marriage. Governing Law and Regulations for Validity of Debt "Compensation" means a monthly payment made by VA to a Veteran because of service-connected disability, or to a surviving spouse, child, or parent of a Veteran because of the service-connected death of the Veteran. 38 U.S.C.A. § 101(13) (West 2002); 38 C.F.R. § 3.4 (2010). Moreover, a Veteran with service-connected disability rated at not less than 30 percent shall be entitled to additional compensation for dependents to include his spouse. 38 U.S.C.A. § 1115 (West 2002 & Supp. 2010); 38 C.F.R. § 3.4(b)(2) (2010). An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. See 38 U.S.C.A. § 5302; 38 C.F.R. § 1.962. An overpayment may arise from virtually any benefits program administered pursuant to VA law, including pension, compensation, dependency and indemnity compensation (DIC), educational assistance benefits and subsistence allowance, insurance benefits, burial and plot allowances, clothing allowance, and automobile or other conveyance and adaptive equipment allowances. 38 C.F.R. § 1.956(a). For compensation benefits, it is the responsibility of the recipient of VA compensation benefits to notify VA of all circumstances which will affect entitlement to receive the rate of the benefit being paid. That is, the recipient of VA benefits must notify VA when he or she acquires knowledge that income, marital status, or dependency status will change or other circumstances which would affect his or her entitlement to receive, or the rate of, the benefit being paid. 38 C.F.R. § 3.660(a)(1) (2010). Moreover, where the dependency of another person ceased on or after October 1, 1982, due to marriage annulment, divorce or death, the reduction or discontinuance shall be effective the last day of the month in which dependency ceased (i.e., the date of the divorce). 38 C.F.R. § 3.660(a)(2). Moreover, where there is change in the payee's marital status or status of dependents which would permit payment at a higher rate and the change in status is by reason of the claimant's marriage, the effective date of the increase will be the date of the event (i.e., the date of the new marriage), if the required evidence is received within 1 year of the event. Overpayments created by retroactive discontinuance of benefits will be subject to recovery if not waived. 38 C.F.R. § 3.660(a)(3). VA generally is required to recover erroneous VA payments or overpayment of benefits. See Edwards v. Peake, 22 Vet. App. 57, 59 (2008); 38 U.S.C. § 5314(a) (generally requiring VA to deduct from future benefit payments a debt arising from a person's participation in a VA benefits program); 38 C.F.R. § 1.912a(a) (same); 38 U.S.C. § 5316 (authorizing VA to recover a benefits related debt by bringing a suit if the person fails to appropriately respond to reasonable administrative efforts to collect the debt). A request for waiver of indebtedness must be made within 180 days following the date of notice of the indebtedness issue by VA to the debtor. 38 U.S.C.A. § 5302(a) (West 2002 & Supp. 2010); 38 C.F.R. § 1.963(b)(2) (2010). That is, under the applicable statute, 38 U.S.C.A. § 5302(a), the application for waiver should be made within 180 days from the date of notification of indebtedness by the Secretary to the payee, or within such longer period as the Secretary determines is reasonable in a case in which the payee demonstrates to the satisfaction of the Secretary that such notification was not actually received by such payee within a reasonable period after such date. The preliminary 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, 437 (1991). In other words, before deciding a request for waiver, VA must first consider the validity of the debt. See also 38 U.S.C. § 5314(b) (prohibiting offset of a debt from future benefit payments unless VA first makes a determination with respect to the beneficiary's dispute of existence or amount of debt). A debtor may dispute the amount or existence of a debt, which is a right that may be exercised separately from a request for waiver or at the same time. See 38 C.F.R. § 1.911(c)(1) (2010); see also VAOPGCPREC 6-98. The propriety and amount of the overpayment at issue are matters that are integral to a waiver determination. See Schaper, 1 Vet. App. at 434. For a determination that the overpayment was not properly created, such that the debt was not valid, it must be established that the appellant was either legally entitled to the benefits in question or, if the appellant was not legally entitled, then it must be shown that VA was solely responsible for the appellant being erroneously paid benefits. 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 connotes that the appellant neither had knowledge of nor should have been aware of the erroneous award. Further, neither the appellant's actions nor his or her failure to act must have contributed to payment pursuant to the erroneous award. 38 U.S.C.A. § 5112(b) (9), (10) (West 2002 & Supp. 2010); 38 C.F.R. § 3.500(b)(2) (2010); 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). Thus, a finding of sole administrative error requires not only error on the part of VA, but that the beneficiary is unaware that the payments are erroneous. The Court noted that, "[s]tated another way, 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." Erickson v. West, 13 Vet. App. 495, 499 (2000). In other words, if a debt is the result solely of administrative error, the effective date of the reduction of benefits is the date of the last payment based on this error and, consequently, there would be no overpayment charged to the Veteran for an overpayment attributable to administrative error. 38 U.S.C.A. § 5112(b)(10); 38 C.F.R. § 3.500(b). Where, however, an erroneous award is based on an act of commission or omission by a payee or with the payee's knowledge, the effective date of the discontinuance of the erroneous payment is the date the award became erroneous, but not earlier than the date entitlement ceased. 38 U.S.C.A. § 5112(b)(9); 38 C.F.R. § 3.500(b). The effective date of a reduction of compensation benefits by reason of divorce on or after October 1, 1982, shall be the last day of the month in which such divorce occurs. 38 U.S.C.A. § 5112(b)(2); 38 C.F.R. § 3.501(d)(2). The effective date of payment of benefits for a dependent spouse is the date of marriage, if the claim is received within one year, otherwise, the date notice is received of the dependent's existence. 38 U.S.C.A. § 5110(f); 38 C.F.R. § 3.401(b). The Court has held that an award of dependency benefits is not contingent on the "mailing" of the required evidence, but rather its "receipt" by VA. McColley v. West, 13 Vet. App. 553, 556-557 (2000). In order to receive an additional payment for a spouse, sufficient proof of marriage is necessary. 38 C.F.R. §§ 3.204, 3.205. The earliest that the additional award of compensation for a dependent(s) can occur is the first day of the month following the effective date. 38 U.S.C.A. § 5111(a); 38 C.F.R. § 3.31. Analysis - Validity of the Debt There is a minor discrepancy in the amount of the alleged debt - the Veteran states that the amount is $1,724, while the VA indicates the amount is $1,340. See hearing testimony at page 3 vs. November 2009 SOC. In any event, the central contention in this case is the Veteran's challenge to the validity of the actual debt, which is a creation issue. The Veteran admits that he failed to report the July 1995 divorce until four years later in November 1999. Thus, he concedes that part of the overpayment is valid and he owes VA a debt from the time of his divorce in July 1995 until he remarried in November 1995. In other words, according to the Veteran, the only valid overpayment was the 3-4 months in between his divorce and his remarriage. He acknowledges he was single and unmarried during those 3-4 months from July 1995 to November 1995, such that he was not entitled to additional compensation benefits for a spouse. He says VA can keep those benefits. However, after his remarriage to E.H. in November 1995, from December 1995 to December 1999, he asserts he is entitled to additional compensation benefits for a spouse. He believes there was no overpayment during this time period. He alleges VA failed to account for his remarriage in November 1995. Since he was remarried from December 1995 to December 1999, he does not understand why he could not receive additional compensation benefits for his new spouse during that period. He also adds he was not aware he had a duty to inform VA of any changes in marriage or dependency. He maintains he did not know at the time of his remarriage that a married Veteran with 30 percent disability was entitled to additional compensation for a spouse. See January 2010 Veteran statement; December 2008 and May 2009 Notices of Disagreement (NODs); March 2009 attorney letter; March 2011 hearing testimony at pages 2-3, 6-7. In the present case, VA must initially determine whether the debt is valid and not due to sole administrative error by VA. If the debt is determined to be valid, the VA must then determine whether recovery of the overpayment is against equity and good conscience. 38 U.S.C.A. § 5302(a); 38 C.F.R. § 1.962. Turning to the initial question of whether the overpayment at issue was validly created, in this case, the appellant was clearly paid additional compensation benefits from August 1995 to December 1999, for his former spouse, S.B., to which he was not entitled. In this respect, the effective date of a reduction of compensation benefits by reason of divorce on or after October 1, 1982, shall be the last day of the month in which such divorce occurs. 38 U.S.C.A. § 5112(b)(2); 38 C.F.R. § 3.501(d)(2). In the present case, since the Veteran was divorced from S.B. in late July 1995, the proper effective date of the reduction of additional compensation benefits is August 1, 1995. The only real dispute in this case is when the additional compensation benefits on behalf of the second dependent spouse E.H. should commence - November 1995 (date of marriage) or November 1999 (date of notice of marriage). In this regard, the effective date of payment of benefits for a dependent spouse is the date of marriage, if the claim is received within one year; otherwise, the date notice is received of the dependent's existence. 38 U.S.C.A. § 5110(f); 38 C.F.R. § 3.401(b). In the present case, although the Veteran remarried in November 1995 to E.H., the claims folder contains no notification by the Veteran to VA of his remarriage within a year of the November 1995 marriage. More importantly, the Veteran admits he did not promptly notify VA of the date of his 1995 divorce or 1995 remarriage until 1999. See hearing testimony at pages 1, 3-4. In fact, specifically, the claims folder confirms that the Veteran did not notify VA of his November 1995 marriage until nearly four years later, when he filed a November 1999 Declaration of Status of Dependents (VA Form 21-686(c)). Therefore, the proper effective date for the restoration of additional compensation benefits based on the Veteran's marriage to his new spouse E.H. would be December 1, 1999, the first day of the month after notice was received of the dependent's existence. See 38 C.F.R. § 3.31. In summary, in view of the above VA regulations, the appellant was clearly paid additional compensation benefits from August 1995 to December 1999 to which he was not legally entitled, since he failed to notify VA of his remarriage within one year. See 38 C.F.R. §§ 3.401(b); 38 C.F.R. § 3.501(d)(2); 38 C.F.R. § 3.660(a). As to the validity of the debt, the evidence of record also does not show that the overpayment was the result of sole VA 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 not have known, that the additional compensation payments were erroneous. In other words, a finding of sole administrative error requires not only error on the part of VA, but that the beneficiary is unaware that the payments are erroneous. 38 U.S.C.A. § 5112(b) (9), (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). As to what the Veteran knew or should have known, a review of the evidence in the claims folder reveals that the Veteran had earlier notice from VA prior to 1995 that continued entitlement to additional compensation benefits for a dependent spouse was based on his accurate reporting of changes in marital status or changes in dependency status. The Veteran's allegations to the contrary at the Travel Board hearing are not credible, and are outweighed by other evidence in the claims folder. That is, as early as May 1950 and January 1951, the Veteran submitted Declarations As to Marital Status (VA Form 8-686(c)), after being awarded VA compensation. In March 1988, VA sent the Veteran a notice letter informing him that he may be entitled to additional compensation for a spouse, children, or parents, and to submit the necessary forms. The Veteran responded by submitting an April 1988 Declaration of Status of Dependents (VA Form 21-686(c)). The VA responded with an April 1988 VA award letter (VA Form 20-8993), in which the Veteran was awarded additional compensation benefits for his spouse. The Veteran was advised that any change in the number or status of dependents must be reported promptly to VA. Also enclosed was a Disability Award Attachment Important Information (VA Form 21-8764) which also advised that since the Veteran had a 30 percent disability rating, he must promptly advise of any change in the status of dependents. An October 1991 VA award letter also advised that for the Veteran to continue to receive additional compensation for dependents, he must complete a form listing his dependent children or spouse. The Veteran responded with a November 1991 Status of Dependents Questionnaire. In light of the above, overall, the Veteran was made aware prior to 1995 that he must promptly advise VA of changes in marital status and changes in dependency status, in order to continue with his additional compensation benefits. Failure to notify the VA of any changes could immediately result in an overpayment subject to recovery by VA. None of the above letters were returned as undeliverable. Written notification is considered adequate even if the Veteran did not actually read the notification because that was his responsibility, not VA's. The Veteran should have known it was improper to accept additional compensation payments for his former spouse, S.B. By the exercise of reasonable care, he should have known he was not entitled to these additional payments. By the exercise of reasonable care, he should have promptly informed VA of his divorce and remarriage in 1995, instead of waiting until 1999. In addition, it is clear that ignorance cannot be used as an excuse for failure to follow a promulgated regulation. See Morris v. Derwinski, 1 Vet. App. 260 (1991), citing Fed. Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384-85 (1947). See also Velez v. West, 11 Vet. App. 148, 156-57 (1998). The Court in Morris noted that the Supreme Court of the United States had held that persons dealing with the Government were charged with knowledge of Federal statutes and lawfully promulgated agency regulations, regardless of actual knowledge or hardship resulting from innocent ignorance. Morris, 1 Vet. App. at 265. As to error on the part of the VA, a review of the evidence in the claims folder reveals that VA had no notice of the Veteran's 1995 divorce or remarriage until 1999. That is, VA did not receive notice of the Veteran's remarriage until a November 1999 Declaration of Status of Dependents (VA Form 21-686(c)) was submitted by the Veteran. As such, there is insufficient evidence of sole administrative error on behalf of the VA for the overpayment from August 1995 to December 1999. In this case, the appellant received additional compensation benefits for a spouse that he was not entitled to. In view of the finding that the overpayment from August 1995 to December 1999 was legally created and was not the result of sole administrative error on the part of VA, the Board finds that the RO's decision to attempt to recover the $1,340 was proper and that the debt is a valid debt to VA. 38 U.S.C.A. § 5112(b) (9), (10); 38 C.F.R. §§ 3.401(b), 3.500(b)(2), 3.501(d)(2), 3.660(a); Jordan v. Brown, 10 Vet. App. 171 (1997). Governing Law and Regulations for Waiver / Equity and Good Conscience Even if the debt is deemed valid and properly created, the debtor still has the right to request waiver of collection of the debt. But any indication of fraud, misrepresentation of a material fact, or bad faith on the part of on the part of the appellant will preclude waiver of the debt. 38 U.S.C.A. § 5302(c); 38 C.F.R. §§ 1.962(b), 1.963(a), 1.965(b). An indication of either "fraud, misrepresentation or bad faith" on the part of the appellant is found, a waiver is automatically precluded, and the principles of "equity and good conscience" will not even be considered or analyzed. See 38 C.F.R. § 1.963(a). "Bad faith" refers to "unfair or deceptive dealing by one who seeks to gain thereby at another's expense." 38 C.F.R. § 1.965(b)(2). Although not undertaken with actual fraudulent intent, conduct by a claimant with intent to seek an unfair advantage, with knowledge of the likely consequences, and with resulting loss to the Government is required for a showing of bad faith. Id. Also, there shall be no recovery of overpayment of VA benefits if it is determined that recovery would be against "equity and good conscience." 38 U.S.C.A. § 5302(a); 38 C.F.R. § 1.962. 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 Appellant and the Government. 38 C.F.R. § 1.965. In making this determination, consideration is given to the following elements, which are not intended to be all-inclusive: (1) fault of the debtor (where actions of the debtors contribute to the creation of the debt); (2) balancing of faults (weighing fault of the debtor versus the fault of VA); (3) undue hardship (whether collection would deprive the 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). 38 C.F.R. § 1.965. In the evaluation of whether equity and good conscience necessitates a favorable waiver decision, the Board must consider all the specifically enumerated elements applicable to a particular case. Ridings v. Brown, 6 Vet. App. 544, 546 (1994); Cullen v. Brown, 5 Vet. App. 510, 512 (1993). If warranted, the Board may waive a portion of the debt. Jordan v. Brown, 10 Vet. App. 171 (1997). Analysis - Waiver of Overpayment In the alternative, if the debt is deemed valid by VA, the Veteran requests waiver of the debt on the basis that recovery of the debt is against equity and good conscience. In particular, he says the overpayment is not his fault in that he was not aware he had a duty to inform VA of any changes in marriage or dependency. He also maintains he did not know at the time of his remarriage in 1995 that a married Veteran with 30 percent disability was entitled to additional compensation for a spouse. In addition, he says that he had no intent to defraud VA. See October 2008 waiver; March 2009 attorney letter; March 2011 hearing testimony at pages 2-3, 6-7. It is also initially worth noting that the Veteran's October 2008 waiver request was timely, as it was submitted within 180 days of the September 2008 notice of indebtedness sent by the DMC. See 38 C.F.R. § 1.962(b)(2). The Board, like the Committee, does not find any indication of fraud, misrepresentation, or bad faith on the Veteran's part that would preclude waiver. 38 U.S.C.A. § 5302(c); 38 C.F.R. §§ 1.962(b), 1.963(a), 1.965(b). His actions simply do not rise to this level. There is no specific information that he purposely lied to VA regarding his divorce and marital status. He remarried only 3-4 months after his divorce. Accordingly, the evidence of record does not clearly show fraud, misrepresentation, or bad faith on his part in the creation of the overpayment. Therefore, the Board must determine whether recovery of the overpayment of additional compensation benefits for a spouse is against equity and good conscience. 38 U.S.C.A. § 5302(a); 38 C.F.R. § 1.962. In the present case, the Board finds that such recovery by VA is not against equity and good conscience, and that VA is entitled to recover its overpayment in the amount of $1,340. Specifically, with respect to fault of the debtor, there is no written, confirmatory evidence the Veteran notified VA of his 1995 divorce and 1995 remarriage until November 1999, when he filed Declaration of Status of Dependents (VA Form 21-686(c)). The Veteran admits that he failed to report the July 1995 divorce until four years later in November 1999. The Veteran and his attorney concede that the Veteran is not entitled to restoration of the overpayment for the 3-4 months he was unmarried from August 1995 through November 1995; for that reason, they state VA can keep that portion of the overpayment. However, they argue that the subsequent overpayment from December 1995 to December 1999 should be restored, since the Veteran was married to E.H. during that time. But as discussed above, prior to 1995, the Veteran was advised on several occasions that he must promptly advise VA of changes in marital status and changes in dependency status, in order to continue with his additional compensation benefits. The Veteran's allegations to the contrary at the Travel Board hearing are not credible, and are outweighed by other evidence in the claims folder. The Veteran should have known it was improper to accept additional compensation payments for his former spouse, S.B. By the exercise of reasonable care, he should have known he was not entitled to these additional payments. By the exercise of reasonable care, he should have promptly informed VA of his divorce and remarriage in 1995, instead of waiting until 1999. It was his actions, or rather, inaction, which caused the overpayment. Consequently, he bears significant fault for the creation of the overpayment of additional compensation benefits for his spouse. With respect to balancing of faults, a review of the evidence in the claims folder reveals that VA had no notice of the Veteran's 1995 divorce or remarriage until 1999. That is, VA did not receive notice of the Veteran's remarriage until a November 1999 Declaration of Status of Dependents (VA Form 21-686(c)) was submitted by the Veteran. The Board acknowledges VA failed to inform the Veteran of the debt when it received notice of the Veteran's marriage in 1999. That is, VA did not act until early 2008 to recover the debt. Regardless, for the period of overpayment from November 1999 to December 2007, VA already restored the overpayment of $3,636 to the Veteran because VA conceded it had notification of his marriage in to E.H. in November 1999. See November 2009 SOC. VA found that the previous overpayment for this time period was due to sole administrative error by VA, since VA was advised of the Veteran's remarriage in November 1999, but failed to act. Thus, the previous overpayment from November 1999 to December 2007 is therefore no longer at issue, as his benefits were restored for that period. As such, VA's fault, if at all present from 1995 to 1999, is minimal in this case, especially in comparison to the Veteran's. With respect to undue hardship, neither the Veteran nor his attorney has specifically alleged undue hardship. In fact, in November 2008 the Veteran submitted a Financial Status Report (FSR, VA Form 20-5655). In this FSR, the Veteran reported a net monthly income of $2,661.00 and no expenses. Thus, he has a monthly surplus. Although he is 86 and retired, he also has assets of $10,000.00. He emphasized that his current spouse E.H. is of "substantial means" in that she is able to pay all living expenses. The Veteran lives in her house as well. There is also no evidence or allegation of bankruptcy, either pending or a final determination, or inability to pay his creditors. Therefore, the Veteran has sufficient income to enable repayment of the debt to VA without resulting in deprivation of basic necessities. Overall, in view of the monthly surplus, it is not shown that recovery of the overpayment has resulted in financial hardship upon him. With respect to defeating the purpose of VA benefits, the law is clear that the purpose of additional VA compensation for dependants is to provide extra income for dependants of Veterans who are 30 percent disabled veterans. And since the Veteran erroneously received a certain sum of money, $1,340, for additional compensation benefits from August 1995 to December 1999 he knew or should have known he was not entitled to, it follows that the recovery of these benefits to which he was not entitled by law does not defeat the purpose of the benefits. In addition, as noted above, since the overpayment of additional compensation benefits for his spouse is a valid debt to the government, there is no reason the Veteran should not accord the government the same consideration that he accords his private creditors. With respect to unjust enrichment, it is not equitable for the Veteran to retain benefits that have been erroneously provided. To waive recovery and allow him to retain these benefits would result in an unfair gain to him. He is subject to VA laws and regulations just as other Veterans are. By VA law, he simply was not entitled to these additional benefits. By the exercise of reasonable care, he should have promptly informed VA of his divorce and remarriage in 1995, instead of waiting until 1999. Finally, the Board finds no indication or allegation that the Veteran relied on additional VA compensation benefits for his spouse to his detriment with consequent relinquishment of a valuable right or incurrence of a legal obligation. The record reveals no other factors that would make recovery of the overpayment inequitable. In conclusion, the Board finds that recovery of the overpayment of additional VA compensation benefits for his spouse would not be against equity and good conscience. 38 U.S.C.A. § 5302(a); 38 C.F.R. § 1.962. Therefore, waiver of recovery of the overpayment in the amount of $1,340 is denied. ORDER The overpayment of additional compensation benefits for a spouse in question is a valid debt and was properly created. The request for a waiver of recovery of the overpayment of additional compensation benefits for a spouse in the amount of $1,340 is denied. ____________________________________________ A. BRYANT Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs