Citation Nr: 1234916 Decision Date: 10/09/12 Archive Date: 10/17/12 DOCKET NO. 08-00 651 ) DATE ) ) On appeal from the Committee on Waivers and Compromises of the Department of Veterans Affairs (VA) Pension Center in Milwaukee, Wisconsin THE ISSUE Entitlement to a waiver of recovery of an overpayment of VA pension benefits already recouped in the approximate amount of $7010 to include whether the overpayment was properly created. REPRESENTATION Veteran represented by: Illinois Department of Veterans Affairs WITNESS AT HEARING ON APPEAL Veteran ATTORNEY FOR THE BOARD Heather J. Harter, Counsel INTRODUCTION The Veteran served on active duty from September 1960 to September 1964. This matter comes to the Board of Veterans' Appeals (Board) on appeal from a February 2007 decision of the Pension Center's Committee on Waivers and Compromises (Committee) which denied the Veteran's request for a waiver of $32,956 indebtedness resulting from an overpayment of VA pension benefits. The amount of the Veteran's debt was reduced to $21,599 in July 2008, based upon the Veteran's submission of documentation showing his medical expenses during the time period at issue. The Veteran presented sworn testimony in support of his appeal during a September 2009 hearing before the undersigned Veterans Law Judge. In April 2010, the Board remanded the matter for further evidentiary and procedural development. This development was only partially completed. In a November 2011 decision, the committee waived recovery of the Veteran's remaining overpayment debt, which was calculated as $16,039. It is unclear how this figure was calculated. Unfortunately, the appeal must again be REMANDED to the Pension Center via the Appeals Management Center (AMC), in Washington, DC. VA will notify the Veteran if further action on his part is required. REMAND Initially, the Board observes that claims for waiver of debt owed to the VA are governed by the provisions of Chapter 53 of Title 38 of the United States Code. This statute contains its own specific notice provisions. The provisions of the Veterans Claims Assistance Act of 2000 (VCAA), 38 U.S.C.A. § 5100 et seq. (West 2002) are relevant to a different chapter of title 38, and do not apply to this appeal. See Barger v. Principi, 16 Vet. App. 132 (2002). In a January 2003 decision, the Veteran was awarded VA pension benefits effective in September 2002, based upon his disability status and his income. According to the January 2003 letter notifying the Veteran of the pension grant, the monthly amount of his VA pension was calculated based upon the assumption that he had no income whatsoever. However, in January 2004, the Veteran was awarded Social Security disability benefits. He apparently failed to report this additional income to VA, however, and VA continued to pay his pension benefits at a level based upon the assumption that he had no other income. As noted above, a portion of the Veteran's debt was cleared when he submitted documentation of extraordinary medical expenses, so as to reduce the amount of his income, allowing the Committee to recalculate his income and thus his overpayment debt. A second large portion of the Veteran's debt was cleared when the Committee waived recovery of the Veteran's unrecovered debt in a November 2011 decision. The remainder appears to represent an amount of money which was withheld by the Social Security Administration from the Veteran's monthly Social Security disability check and then paid to the VA, together with any amount of money which may have been withheld by VA from the Veteran's recalculated VA pension benefits. In the April 2010 remand, the Board made reference to the contents of a June 2008 Supplemental Statement of the Case. Thus, it would appear that the Board had reviewed the June 2008 Supplemental Statement of the Case at that time. However, currently, the file does not contain a June 2008 Supplemental Statement of the Case. The RO is therefore requested to prepare a memorandum reflecting the efforts taken to search for this document and the reasons for concluding that it is now unavailable. See 38 C.F.R. § 3.159(c)(2). We note, however, that, as when the case was previously before the Board, there continue to be lapses in documentation which frustrate appellate review. For instance, there is no accounting of the actual money which has been collected to satisfy the debt. Although the VA notified the Veteran in a September 2008 letter that, "we will take all or part of your [monthly VA pension payment of approximately $150] check to apply towards [your overpayment] debt," there is no indication as to whether such action was taken. Records from Social Security reflect that that agency began withholding $160 from the Veteran's monthly Social Security check in June 2008. They continued to withhold a portion of his monthly check through June 2011 when the records were provided to VA, and likely beyond that point as well. In any case these records show that from June 2008 through June 2011, the Social Security Administration withheld a total of $6162.37 from the Veteran's benefits. However, these statements do not contain any information as to why the money was withheld or where it was sent. It is consistent with the other information in the file, and reasonable as well, to presume that this figure represents the amount of money paid to VA by Social Security for purposes of recouping the Veteran's pension overpayment debt, but it is not clear from the record that this is actually what happened. Furthermore, we do not know whether Social Security continued to withhold money from the Veteran's monthly check after June 2011, although it is reasonable to assume that they did. Thus, for example, assuming that Social Security continued to withhold $169.65 from the Veteran's check each month from July 2011 through November 2011, when the Committee granted a waiver of the Veteran's "remaining" debt, the Veteran would have effectively paid an additional $848.25 toward his VA debt, for a total of $7010.62. In other words, the source of the money being attributed to the recovery of the Veteran's debt is not clearly identified and the accounting as to the amount of money which has been repaid through recoupment is impossible to follow in the available records. In any event, assuming that the original calculation of the Veteran's debt as having been $32,599 was accurate, we know that his debt was reduced by $11,000 worth of medical expenses, for a remaining total of $21,599. We also know that the Committee waived recovery of $16, 039 of what was termed "remaining" debt in November 2011, with the stated purpose of reducing the Veteran's overall debt to $0 effective as of December 2011. Thus, it would appear that the Committee calculated the amount of debt which had already been recouped to be approximately $5,560. The Committee's method of calculation is entirely unclear, however, and does not correspond with the records from the Social Security Administration showing that at least $6162.37 was withheld from his Social Security benefits. During the September 2009 hearing on appeal and in his substantive appeal, the Veteran and his representative requested that the Board obtain records from the Veterans Hospital Administration to substantiate the Veteran's report that he told the VA Medical Center in North Chicago about his Social Security benefits, in the context of notifying the Medical Center of his Medicare insurance. Therefore, in the April 2010 remand, the Board requested that these records be obtained. Although the Committee requested such records, no response was received from the Medical Center. VA medical records are deemed to be constructively of record in proceedings before the Board and should be obtained prior to further review of the claims file. Bell v. Derwinski, 2 Vet. App. 611 (1992). Furthermore, the RO is required to fully complete the development ordered by the Board. Stegall v. West, 11 Vet. App. 268 (1998); Ascherl v. Brown, 4 Vet. App. 371, 377 (1993). All of the above goes toward the question of whether the debt was validly created. If the VA had constructive knowledge of the Veteran's award of Social Security disability benefits, yet continued to pay the Veteran VA pension benefits, without adjusting for his additional income, then the concept of VA administrative error comes into play. In this case, if the debt is adjudicated as solely the result of administrative error, the effective date of the adjustment/reduction of VA pension benefits, would be the date that the Veteran notified VA of his Social Security award, and there would be no overpayment charged to the Veteran for the portion of the overpayment attributable to administrative error. 38 U.S.C.A. § 5112(b)(10); 38 C.F.R. § 3.500(b); see Jordan v. Brown, 10 Vet. App. 171 (1997). Under these circumstances, some or all of the currently-declared overpayment would not be validly created. Furthermore, identifying the exact amount of the debt at issue is a critical part of the creation analysis. We emphasize that the Board does not intend to overturn any portion of the decisions which have been made that are favorable to the Veteran. Therefore, the November 2011 waiver of $16,039 stands, absent any indication of fraud, and the questions remaining are whether the debt was validly created and whether the amount of debt which has been collected from the Veteran was accurately-calculated. In this regard, we observe that the VA is responsible for ensuring that the SSA in fact ceased to withhold a portion of the Veteran's SSA disability benefits, effective as of the November 2011 Committee decision. The Veteran and his representative are hereby notified to contact the VA if this action did not occur as of December 2011, so that corrective action may be taken. Accordingly, the case is REMANDED for the following action: 1. The RO should undertake a reasonable search for the June 2008 Supplemental Statement of the Case, to include asking the Veteran if he has a copy of it in his own files. If it is not located, a Memorandum of Unavailability should be prepared for the file. 2. The VA medical system in the Chicago region should be contacted to obtain any financial information pertaining to the Veteran's Social Security and/or Medicare benefits and documentation of the date(s) when he submitted such information. If it is easier for the medical system to provide the Veteran's entire Medical Administration File, then the entire file should be provided. 3. A paid and due audit should be prepared showing the exact amount and the source(s) of each "payment" made toward the Veteran's debt, and the total amount of money accepted by VA toward the Veteran's debt. Toward this end, it must be ascertained whether VA itself withheld any of the Veteran's VA pension benefit payments to recoup the debt. VA must also ascertain whether the figures cited above from the Social Security Administration in fact represent money recouped for the purpose of paying the Veteran's debt to the VA. 4. After accomplishing the actions requested above, the Committee should readjudicate the validity of the creation of the debt, establishing the amount of the veteran's debt, to include any additional necessary evidentiary development, and honoring the November 2011 waiver of $16,039. The Veteran should be provided with notice of the decision and an opportunity to respond. 5. If further analysis and application of the standard of equity and good conscience is required at this point, (i.e., if the Committee finds that the Veteran's already-recouped debt was validly created), then appropriate evidentiary development pertaining to the elements to be considered under the standard of equity and good conscience, must be undertaken. The Committee should then review the complete record, applying the standard of equity and good conscience to Veteran's application for waiver of his remaining debt. If the waiver remains denied, wholly or in part, the Veteran and his representative should be furnished a supplemental statement of the case and given the opportunity to respond thereto. The Veteran has the right to submit additional evidence and argument on the matter 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 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. 2011). _________________________________________________ K. PARAKKAL Veterans Law Judge, Board of Veterans' Appeals Under 38 U.S.C.A. § 7252 (West 2002), 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) (2011).