Citation Nr: 1237802 Decision Date: 11/05/12 Archive Date: 11/09/12 DOCKET NO. 10-36 135A ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Seattle, Washington THE ISSUE Entitlement to a waiver of recovery of an advance payment of educational assistance benefits in the amount of $3,000.00. (The issues of entitlement to an increased disability rating for lumbosacral strain and for service connection for a neurological disorder are the subject of a separate Board decision under a different docket number.) ATTORNEY FOR THE BOARD K. A. Kennerly, Counsel INTRODUCTION The Veteran served on active duty in the United States Marine Corps from November 13, 1996 to January 27, 1996, and in the United States Army from August 2001 to May 2005. This matter comes before the Board of Veterans' Appeals (Board) on appeal from a June 2010 administrative decision of the Department of Veterans Affairs (VA) Education Center in Muskogee, Oklahoma. This decision of the Committee on Waivers and Compromises (Committee) notified the Veteran that he was responsible for repayment of a debt in the amount of $3,000.00 for an advance payment of educational assistance benefits. The Veteran disagreed with the denial of his waiver request in June 2010, and timely perfected his appeal in September 2010. The Veteran was scheduled for a Board hearing in April 2011, to which he did not report. The Veteran has also failed to provide good cause for his failure to report to this hearing. As such, his hearing request is deemed withdrawn. See 38 C.F.R. § 20.704(d) (2012). FINDING OF FACT Recovery of the advance payment in the amount of $3,000.00 would not be against equity and good conscience because a failure to collect advance payment would result in unjust enrichment. CONCLUSION OF LAW Recovery of the advance payment of educational assistance benefits in the amount of $3,000.00 would not be against equity and good conscience. 38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. §§ 1.962, 1.963, 1.965 (2012). REASONS AND BASES FOR FINDING AND CONCLUSION I. Duties to Notify and Assist The United States Court of Appeals for Veterans Claims (Court) has held that the provisions of the Veterans Claims Assistance Act of 2000 (VCAA), Pub. L. No. 106-475, 114 Stat. 2096 (2000) are not applicable to cases pertaining to the issues of validity of overpayments and waiver requests. See Barger v. Principi, 16 Vet. App. 132, 138 (2002). This is so because the relevant provisions to this issue are found in Chapter 53 of Title 38 of the United States Code, which contains its own notice provisions. Id. (The Court upheld its holding in Barger in Reyes v. Nicholson, 21 Vet. App. 370, 379-80 (2007).) II. Backround On September 25, 2009, the Secretary announced that VA had authorized emergency checks for up to $3,000.00 to be given to students who had applied for educational benefits and who had not yet received their Government payment. It was noted that "students should be focusing on their studies, not worrying about financial difficulties." Delays in educational assistance payments were in part due to the overwhelming popularity of the Post-9/11 GI Bill, resulting in tens of thousands of claimants. Significantly, the announcement made clear that the advanced money would be deducted from future education payments. According to the Education Center, the Veteran applied for advance payment via the internet in October 2009. A history of education assistance payments documents that the Veteran was issued a Treasury check for $3,000.00 on October 6, 2009. On November 5, 2009, he began to receive regular education assistance payments (totaling in excess of $3,000.00). According to the Education Center, when the Veteran made the request for the advance payment, he certified that he would have to repay the advance. In February 2010, the Debt Management Center (DMC) established the debt for advance payment and notified the Veteran that it was necessary to recoup the $3,000.00. In May 2010, the Veteran submitted a Financial Status Report reflecting that he was no longer employed and that his net monthly income was $1,500.00, due to VA benefits, Social Security, or other income. He also reported that his wife received $500.00 per month due to VA benefits, Social Security, or other income. He indicated that the recoupment of the advance created an undue financial hardship. Later in May 2010, VA received the Veteran's request for a waiver of indebtedness of the $3,000.00 advance payment he received. In June 2010, as noted in the Introduction, the Committee denied the waiver request. It was determined that the Veteran would be unjustly enriched by the advance payment if he did not repay the advance because he would have essentially received duplicate payments for the same educational assistance benefits at the expense of the Government. III. Analysis Recovery of an overpayment may be waived if there is no indication of fraud, misrepresentation, or bad faith, on the part of the person or the persons having an interest in obtaining the waiver, and recovery of such indebtedness would be against equity and good conscience. See 38 U.S.C.A. § 5302(c) (West 2002); 38 C.F.R. §§ 1.962, 1.963 (2012). In the absence of fraud, misrepresentation, or bad faith, consideration may be given as to whether recovery of the overpayment would be against equity and good conscience. 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 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) the fault of the debtor; (2) balancing of faults between the debtor and VA (3) undue hardship of collection on the debtor; (4) whether collection would defeat the purpose of an existing benefit to the veteran; (5) whether failure to collect a debt would result in the unjust enrichment of the veteran; and (6) whether the veteran changed positions to his detriment in reliance upon a granted VA benefit. See 38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. § 1.965(a) (2012); Ridings v. Brown, 6 Vet. App. 544, 546 (1994). Generally, for a notice of indebtedness issued on or after April 1, 1983, a request for waiver of the indebtedness shall only be considered if made within 180 days following the date of notice. See 38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. § 1.963(b) (2012). There is no issue of timeliness in the Veteran's case as the request for a waiver was received within 180 days following the date of notice of indebtedness. In considering the "equity and good conscience" elements, the "fault" of this debt is equally that of the Veteran and VA. That is, the $3,000.00 advance payment was ostensibly a beneficial plan that both parties expressly chose to participate in. "Fault" is not a particularly useful element in this case because the primary purpose of the advance payment was to create a debt. Along those lines, collection of the advance payment would not defeat the purpose of an existing benefit to the Veteran because, as noted, the primary purpose of this benefit was an advance payment that would necessarily result in a debt. Additionally, there is no indication that the Veteran changed positions to his detriment in reliance upon a granted VA benefit. Instead, the creation of the debt was to his benefit. The Veteran's principal argument is that collection of the advance payment has created an undue financial hardship. He indicates that he has a negative net monthly income on account of living expenses and other debts. The Board does not find the Veteran's contention to be persuasive in the consideration of equity and good conscience. He was provided with an advance payment of $3,000.00 to be used in lieu of forthcoming educational assistance payments. The Veteran's action of not retaining $3,000.00 for repayment frustrated the purpose of the Secretary's authorization of emergency advance payments. The element of "equity and good conscience" most applicable to the Veteran's case is that a failure to collect the advance payment would result in the unjust enrichment. When the Veteran made the request for the advance payment, he certified that he would have to repay the advance. He has acknowledged that he was aware that he was supposed to repay the $3,000.00. Failing to collect the advance payment would result in unjust duplicative educational assistance payments at the expense of the Government. Additionally, in authorizing the advance payment, it was expected that the amount would be recouped by an offset or reduction in future education payments. This recoupment plan has been implemented accordingly in the Veteran's case. In sum, consideration of equity and good conscience as to the facts and circumstances in the Veteran's case does not indicate a need for reasonableness and moderation in the exercise of the Government's rights. In view of the Board's findings, recovery of the advance payment in the amount of $3,000.00 would not be against equity and good conscience. Accordingly, the Veteran's request for a waiver must be denied. ORDER Waiver of recovery of an advance payment of educational assistance benefits in the amount of $3,000.000 is denied. ____________________________________________ MARJORIE A. AUER Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs