Citation Nr: 1300634	
Decision Date: 01/08/13    Archive Date: 01/16/13

DOCKET NO.  12-28 444	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Regional Office in Milwaukee, Wisconsin


THE ISSUE

Entitlement to waiver of overpayment of death pension benefits in the amount of $21,211.00.


REPRESENTATION

Appellant represented by:	Hugh F. Daly, Attorney at Law


ATTORNEY FOR THE BOARD

G. A. Wasik, Counsel



INTRODUCTION

The Veteran served on active duty from October 1950 to October 1953.  The Veteran is deceased.  The appellant is the Veteran's surviving spouse.  

This matter comes before the Board of Veterans' Appeals (Board) on appeal from a July 2011 determination by the Committee on Waivers and Compromises (Committee) at the Department of Veterans Affairs (VA) Regional Office (RO) in Milwaukee, Wisconsin.

This appeal has been advanced on the Board's docket pursuant to 38 C.F.R. § 20.900(c) (2012).  38 U.S.C.A. § 7107(a)(2) (West 2002).


FINDINGS OF FACT

1.  The overpayment in death pension benefits to the appellant was not the result of conduct on her part which amounted to "fraud," "misrepresentation of a material fact," or "bad faith."

2.  The appellant was solely at fault in the creation of the overpayment of VA death pension benefits, in the amount of $21,211.00, due to her failure to timely inform VA that she was in receipt of retirement benefits from the City of Cincinnati.  

3.  A recovery of the $21,211.00 of overpaid VA death pension benefits would not result in an undue hardship of the appellant and would not deprive her of basic necessities.

4.  The recovery of the overpayment would not tend to defeat the purpose for which the benefits were intended.

5.  A failure by the appellant to make restitution would result in unfair gain to the appellant because she received monetary benefits to which she had no entitlement.

6.  There is no indication that the appellant relinquished a valuable right or incurred a legal obligation in reliance upon the benefits received.

7.  A recovery of the overpayment of VA death pension benefits in the amount of $21,211.00 would not be against equity and good conscience.


CONCLUSION OF LAW

Recovery of an overpayment of death pension benefits in the calculated amount of $21,211.00 would not be against equity and good conscience.  38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. §§ 1.963, 1.965 (2012). 


REASONS AND BASES FOR FINDINGS AND CONCLUSION

Veterans Claims Assistance Act of 2000

Initially, the Board notes that the Veterans Claims Assistance Act of 2000 (VCAA), Pub. L. No. 106-475, 114 Stat. 2096 (2000) and the regulations implementing it are not applicable to the appellant's waiver claim.  See Barger v. Principi, 16 Vet. App. 132 (2002).  However, the Board notes that the facts pertinent to this claim have been properly developed and that no further development of the record is required. 

Factual Background

The record reflects that the appellant was awarded death pension benefits, effective in September 2007, on the basis that her countable annual income did not exceed the maximum annual limit.  She was informed that the only income used in the determination was income from Social Security.  Enclosed with the November 2007 award letter was VA Form 21-8767, which essentially informed her that pension is an income-based program, and that she was obligated to report changes in income immediately to VA.  

In December 2008 and December 2009, the appellant received notification from VA that she was not required to complete an Eligibility Verification Report (EVR) for those years.  She was informed that individuals who only receive Social Security income do not have to complete an EVR.  

In a May 2010 Report of Contact, it was recorded that the Veteran informed a VA employee she was in receipt of additional income in the amount of $1,400.00 per month from a retirement account from the City of Cincinnati.  

In a May 2011 letter, the appellant wrote that she applied for the pension from VA because she needed the income and that she thought this was a benefit VA allowed for all veteran's wives.  With regard to the overpayment, she did not see any way possible that she could repay any amount as she was still in need of the pension.  She argued that VA should not have sent her the benefit if she was not eligible for it.  

A May 2011 Financial Status Report (FSR) completed by the appellant apparently indicates the appellant was in receipt of monthly income of $1,633.50 from a retirement account and $1,146.00 for Social Security.  The FSR also indicates monthly expenses of $1,443.00, including $468.00 for mortgage, $125.00 for food, $106.00 for utilities and heat, $38.00 for phone, $57.00 for cable, $8.00 for medical transportation, $8.00 for a house cleaning service, $10.00 for laundry, $100.00 for clothes and $74.00 for hair care.  She reported $1,075.00 in the bank and $125.00 cash on hand.  Installment contracts and other monthly debts were listed as $4,000.00 to Fifth Third Bank with a monthly payment of $100.00; $2,708.00 to Chase Bank with a monthly payment of $50.00; $110.00 to Sears with a monthly payment of $50.00; and $198.00 to St Paul's Church for tithing and ministry dues.  

According to the July 2011 Committee decision, the reduction in death pension benefits was ordered after the RO learned that the appellant was in receipt of retirement income in excess of what was reported on her application for compensation.

The appellant's August 2011 notice of disagreement indicates she believed that she had reported all her income on the original application for compensation.   

Analysis

Pursuant to 38 U.S.C.A. § 5302(c) (West 2002), a finding of fraud, misrepresentation or bad faith precludes a grant of a waiver of recovery of the overpayment.  The RO concluded that the facts in this case do not show the presence of any of the preceding factors and the Board will accept that conclusion.  As a result, the Board's decision on appeal will be limited to the determination of whether waiver of recovery of the overpayment of death pension benefits is warranted on the basis of equity and good conscience. 

The RO has denied the appellant's claim for waiver on the basis that recovery of the overpayment would not be against equity and good conscience.  38 U.S.C.A. § 5302; 38 C.F.R. § 1.963(a) (2012).  The standard of "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.  Fault of the debtor.  Whether the actions of the debtor contributed to the creation of the debt. 

2.  Balancing of faults.  Weighing of the fault of the debtor against that 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.  Whether failure to make restitution would result in unfair gain to the debtor. 

6.  Changing position to one's detriment.  Whether reliance on VA benefits resulted in relinquishment of a valuable right or the incurrence of a legal obligation.  38 C.F.R. § 1.965(a) (2012). 

Based on a review of the entire record and having considered the contentions of the appellant, the Board concludes that the appellant was at fault in the creation of the debt because she failed to report the total income received by her from 2007 to 2010-specifically, her additional retirement income from the City of Cincinnati-in a timely manner.  The appellant was informed on numerous occasions that receipt of the death pension was income based and that the only income being used to evaluate her eligibility was her Social Security benefits.  There is no indication that VA was at fault in creation of the overpayment.  VA provided proper notification to the appellant of the eligibility and reporting requirements pertaining to death pension benefits.  The appellant, for whatever reason, failed to inform VA of her receipt of the retirement income in question in a timely manner.  Balancing of faults weighs against the appellant's claim.  

The Board finds that collection of the overpayment would not result in undue hardship.  The evidence included in the May 2011 FSR demonstrates that the appellant had a positive cash flow after her reasonable expenses and installment contract payments were made without looking into the underlying nature of the reported expenses.  When the nature of the underlying expenses is examined, the Board finds more reason to determine that recoupment of the overpayment would not result in financial hardship.  The Board notes that one of the reported installment contract debts listed was for tithing to the appellant's church.  While admirable, this payment of $190.00 per month is entirely of the appellant's own volition and not required by law.  Reduction of this payment would have no legal consequences for the appellant.  

As to the element of "undue financial hardship," the Board observes that the regulation provides that consideration should be given to whether collection of the indebtedness would deprive the debtor or her family of the basic necessities.  As there is evidence that the appellant's income is in excess of her monthly expenses including those required for the basic necessities of life, the Board finds no undue financial hardship would result from VA's collection of this debt to the government. The Board notes that the appellant has installment contract debt which she has been current in her payments on and reminds the appellant that a debt to VA must be accorded the same regard given to those other creditors.  The Board is of the opinion that collection of the debt would not have an adverse impact on the appellant's ability to provide for life's basic necessities.  

The Board also finds that collection of the debt would not defeat the purpose of paying benefits by nullifying the objective for which the benefits were intended.  The purpose of the compensation benefits is defined by statute as is the authority for termination of those benefits.  

Additionally, the Board finds that failure to make restitution would result in unfair gain to the appellant because she received monetary benefits to which she was not entitled.  The VA made erroneous payments of benefits based on incorrect information provided by the appellant, and she, in turn, benefited.  To allow her to profit by retaining money erroneously paid as a result of her own fault under these circumstances would clearly constitute unjust enrichment. 

The evidence does not demonstrate that the appellant changed positions to her detriment in reliance upon the VA pension benefits, or that the recovery of the overpayment would defeat the purpose for which the benefits are intended.  The appellant has not alleged such a fact pattern.

After weighing all the evidence of record, the Board finds that recovery of the overpayment would not be against equity and good conscience.  

When all the evidence is assembled VA is then responsible for determining whether the evidence supports the claim or is in relative equipoise, with the claimant prevailing in either event, or whether a preponderance of the evidence is against the claim in which case the claim is denied.  Gilbert v. Derwinski, 1 Vet. App. 49, 55 (1990); Ortiz v. Principi, 274 F. 3d 1361 (Fed. Cir. 2001).  The preponderance of the evidence is against a waiver of the assessed overpayment and the claim must be denied.


ORDER

Waiver of recovery of the debt in the amount of $21,211.00 is denied.



____________________________________________
RYAN T. KESSEL
Acting Veterans Law Judge, Board of Veterans' Appeals


Department of Veterans Affairs