Citation Nr: 1237174 Decision Date: 10/26/12 Archive Date: 11/09/12 DOCKET NO. 10-20 541 ) DATE ) ) Received from the Department of Veterans Affairs Regional Office and Insurance Center in Philadelphia, Pennsylvania THE ISSUE Entitlement to a waiver of recovery of an overpayment of Department of Veterans Affairs (VA) disability compensation benefits in the calculated amount of $8,725.47. REPRESENTATION Appellant represented by: Vietnam Veterans of America ATTORNEY FOR THE BOARD Michael T. Osborne, Counsel INTRODUCTION The Veteran had active service from April 1966 to February 1970, including in the Republic of Vietnam. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a December 2009 administrative decision issued by the Committee on Waivers & Compromises (COWC) at the Department of Veterans Affairs (VA) Regional Office (RO) and Insurance Center in Philadelphia, Pennsylvania, that denied a waiver of indebtedness in the calculated amount of $8,725.47 resulting from overpayment of VA disability compensation benefits. Although the Veteran lives within the jurisdiction of the RO in Boston, Massachusetts, because this appeal involves a waiver of overpayment, the COWC at the RO and Insurance Center in Philadelphia, Pennsylvania, retains jurisdiction. Unfortunately, as is explained below, the appeal is REMANDED to the RO via the Appeals Management Center (AMC), in Washington, DC. VA will notify the Veteran if further action is required on his part. REMAND Inasmuch as the Board sincerely regrets the additional delay of the adjudication of this matter, a remand is necessary before the Veteran's request for waiver of overpayment of VA disability compensation benefits in the calculated amount of $8,725.47 can be adjudicated. Under VA law and regulation, a person who is incarcerated in a Federal, State, local or other penal institution or correctional facility for a period in excess of 60 days for conviction of a felony will not be paid compensation in excess of that amount specified in 38 C.F.R. § 3.665(d) beginning on the 61st day of incarceration. 38 U.S.C.A. § 5313(a)(1) (West 2002); 38 C.F.R. § 3.665(a) (2011). In the case of a Veteran with a service-connected disability rated at 20 percent or more, the Veteran shall not be paid an amount that exceeds the rate under 38 U.S.C.A. § 1114(a), which is at the rate of 10 percent. 38 C.F.R. § 3.665(d). If a disability evaluation is less than 20 percent, the Veteran shall receive one-half the rate of compensation payable under 38 U.S.C.A. § 1114(a). 38 C.F.R. § 3.665(d). Upon release from incarceration, the released person's award shall be resumed on the date of release from incarceration if VA receives notice of release within 1 year following release; otherwise the award shall be resumed the date of receipt of notice of release. 38 C.F.R. § 3.665(i). A review of the record reveals that service connection is in effect for posttraumatic stress disorder (PTSD), evaluated as 50 percent disabling prior to May 20, 2002, and as 70 percent disabling thereafter, tinnitus, evaluated as 10 percent disabling effective March 16, 1995, status-post cholesteatoma surgery on the left ear associated with a perforated left eardrum, evaluated as 10 percent disabling effective May 8, 1999, post-surgical neuropathy with headaches associated with status-post cholesteatoma surgery on the left ear, evaluated as 10 percent disabling effective May 9, 1999, a perforated left eardrum, evaluated as zero percent disabling effective March 16, 1995, residuals of a laceration of the left middle finger, evaluated as zero percent disabling effective March 16, 1995, and for hearing loss, evaluated as zero percent disabling effective May 20, 2002. The Veteran's combined disability evaluation for compensation is 80 percent effective May 20, 2002. The Veteran also is in receipt of a total disability rating based on individual unemployability (TDIU) effective May 20, 2002. In February 2009, the RO received a VA and Social Security Administration (SSA) Prisoner Computer Match form which showed that the Veteran had been incarcerated in a New Hampshire state prison on August 12, 2002 and had been released on February 17, 2003. In March 2009, RO personnel then contacted the New Hampshire state prison where the Veteran had been incarcerated and confirmed the dates of his incarceration. Unfortunately, there is no information in the claims file, including on the February 2009 SSA Prisoner Computer Match or on the March 2009 VA Form 119, "Report of Contact," which indicates whether the Veteran had been incarcerated in a New Hampshire state prison between August 2002 and February 2003 following a felony conviction. The RO issued a letter to the Veteran later in March 2009 in which it proposed to reduce his VA disability compensation benefits owing to his incarceration. The RO stated in this letter that VA had been informed by SSA that the Veteran had been incarcerated "following a felony." The RO subsequently notified the Veteran in May 2009 correspondence that it had reduced his VA disability compensation to 10 percent retroactive to the dates of his incarceration between August 2002 and February 2003. This action by the RO created the overpayment that resulted in the current appeal. The Veteran does not dispute that he was incarcerated between August 2002 and February 2003 or that he did not inform VA of this period of incarceration. He has contended instead in his Notice of Disagreement and Substantive Appeal (VA Form 9) that he was incarcerated between August 2002 and February 2003 for a parole violation and not because of a felony conviction. Because it is not clear from a review of the record whether the Veteran's incarceration between August 2002 and February 2003 was the result of a felony conviction, the Board finds that appellate review of the Veteran's request for waiver of overpayment must be deferred pending a remand for clarification of the nature of the offense(s) that prompted the Veteran's incarceration and led to the overpayment. The Board notes in this regard that the Veteran's most recent VA Form 5655, "Financial Status Report," is dated in May 2010. Because this claim is being remanded for additional development, the Board finds that the Veteran should be given the opportunity to submit an updated Financial Status Report. Accordingly, the case is REMANDED for the following action: 1. Send the Veteran a blank VA Form 5655, "Financial Status Report," and ask him to provide updated information concerning his current financial status. An appropriate period of time should be allowed for a response. 2. Contact the New Hampshire State Prison in Concord, New Hampshire, and request that this facility provide detailed information concerning the offense(s) which prompted the Veteran's incarceration between August 12, 2002, and February 17, 2003. This facility should indicate the nature of the offense(s) which prompted the Veteran's incarceration between August 12, 2002, and February 17, 2003and whether, under New Hampshire state law, the Veteran was incarcerated during this time period for a felony or a misdemeanor. A copy of any request(s) sent to this facility, and any response, to include any information concerning the nature of the Veteran's offense(s), must be included in the claims file. 3. Then, submit any information obtained in response to the remand directives listed above to the Committee on Waivers & Compromises (COWC) at the RO in Philadelphia, Pennsylvania. The COWC should provide the Veteran with an updated accounting of the amount of the alleged overpayment of compensation benefits owed to VA. The COWC also should provide the Veteran with a new notification letter regarding any overpayment found to be present. A copy of any correspondence sent to the Veteran, to include an updated accounting of the amount of the alleged overpayment of compensation benefits owed to VA, and any reply, should be associated with the claims file. 4. Prepare a written audit of the Veteran's disability compensation during the period of the assessed overpayment which reflects the amounts actually paid to the Veteran as well as the amounts properly due on a month-by-month basis. A copy of any written audit must be included in the Veteran's claims file and should be sent to the Veteran. Send the Veteran a letter confirming the exact amount of overpayment along with information detailing the process by which the overpayment was calculated. A copy of any correspondence sent to the Veteran, to include the written audit, and any reply, must be included in the claims file. 5. Review all evidence received since the last prior adjudication and readjudicate the Veteran's request for waiver of overpayment. If the determination remains unfavorable to the Veteran, then the COWC at the RO should issue a supplemental statement of the case that contains notice of all relevant actions taken, including a summary of the evidence and applicable law and regulations considered pertinent to the issue. An appropriate period of time should be allowed for response by the Veteran and his service representative. Thereafter, the case should be returned to the Board for further appellate consideration, if in order. 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. 2011). _________________________________________________ MARJORIE A. AUER 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).