Citation Nr: 1307741 Decision Date: 03/08/13 Archive Date: 03/11/13 DOCKET NO. 08-23 223A ) DATE ) ) On appeal 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 nonservice-connected (NSC) pension benefits in the amount of $19,672.00 (US dollars), to include the issue of whether the debt was properly created. REPRESENTATION Appellant represented by: Georgia Department of Veterans Services WITNESSES AT HEARING ON APPEAL Veteran and T.H. ATTORNEY FOR THE BOARD H. Hoeft, Counsel INTRODUCTION The Veteran served on active duty from March 1966 to October 1969. This matter comes before the Board of Veterans' Appeals (Board) from a February 2008 decision of the Committee on Waivers and Compromises (Committee) of the Philadelphia, Pennsylvania, Regional Office (RO) of the Department of Veterans Affairs (VA). That action denied the Veteran's request for a waiver of recovery of an overpayment of NSC pension benefits. The Veteran submitted a Notice of Disagreement in May 2008; a statement of the case (SOC) was issued in June 2008; and a timely substantive appeal (VA Form 9) was submitted in August 2008. The Veteran's Virtual VA record was reviewed in conjunction with the claims folder. As noted in the June 2008 SOC, the Veteran initially incurred two, separate overpayments for two different reasons. Specifically, an overpayment in the amount of $19,672.00 was incurred as a result of duplicate pension (NSC) payments; a second overpayment in the amount of $7,789.00, was incurred due excessive Social Security income. The Veteran did not submit a waiver request as to the latter overpayment, and the debt was subsequently repaid in full ($7,789.00) as of February 2008. As such, the only issue before the Board pertains to the validity and waiver of the $19,672.00 overpayment, as noted on the cover page of this decision. The Veteran testified at a hearing before the undersigned Veterans Law Judge in October 2012. A transcript of those proceedings has been associated with the Veteran's claims file. FINDINGS OF FACT The overpayment of nonservice-connected pension benefits was solely the result of VA administrative error; neither the Veteran's actions, nor his failure to act contributed to the creation of the debt. CONCLUSION OF LAW The overpayment of nonservice-connected pension benefits in the amount of $19,762.00, was based solely upon VA administrative error, such that the debt was not valid and the overpayment was not properly created. 38 U.S.C.A. §§ 5112, 5304 (West 2002); 38 C.F.R. §§ 1.911(c), 1.956, 1.962, 1.963, 21.5824(a) (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veterans Claims Assistance Act of 2000 (VCAA) As discussed below, the Board has determined that the $19,672.00 debt is the result of administrative error (i.e., it is not valid) and shall not be assessed against the Veteran. The issue of entitlement to a waiver of recovery of an overpayment is therefore moot. Accordingly, the Board finds that any error related to due process or the VCAA on this appeal is also moot. See 38 U.S.C. §§ 5103, 5103A (West 2002 ); 38 C.F.R. § 3.159 (2012); Mlechick v. Mansfield, 503 F.3d 1340 (Fed. Cir. 2007). Validity of Debt The 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 (1991). In order for the Board to determine that the overpayment was not properly created, such that the debt was not valid, it must be established that the Veteran was legally entitled to the benefits in question or, if the Veteran was not legally entitled, then it must be shown that VA was solely responsible for the Veteran being erroneously paid benefits. In this case, the Veteran contends that he should not be held responsible for a $19,672.00 overpayment, which was created when duplicate VA pension payments were paid to him. For the reasons that follow, the Board concludes that the overpayment was due solely to administrative error on the part of the RO and that the debt is not valid. The primary controversy in this case surrounds duplicative nonservice-connected pension benefits. Historically, the Veteran had been in receipt of NSC pension since September 2004. See September 2004 Rating Decision, Granting NSC. In April 2006, the Pension Maintenance Center (PMC) discovered that the Veteran was receiving two NSC pensions. Specifically, VA had been issuing one NSC pension check under the Veteran's social security number, and a second NSC pension check under the Veteran's VA claim number. As such, the PMC proposed to terminate the benefits under the VA claim number effective September 1, 2004. See April 21, 2006, Letter to Veteran. In July 2006, the duplicate pension was terminated and thus an overpayment of $19,672.00 was created. The PMC notified the Veteran later that month that they had terminated the duplicate pension, resulting in an overpayment. In July 2007, the Debt Management Center (DMC) notified the Veteran of the $19,672.00 debt/overpayment and his waiver rights. In October 2007, the Veteran submitted a waiver request for the recovery of the overpayment; the Committee denied the waiver in a February 2008 decision, citing that the Veteran was at fault in creation of the debt, and that the amount overpaid would constitute unjust enrichment at the expense of the government. See Decision On Waiver Of Indebtedness, February 2008. The Veteran appealed that determination. Again, the Veteran's primary contention is that the duplicative payments were solely the result of administrative error on VA's part, and that he should not be held responsible for the overpayment created. The Veteran presented credible testimony to this effect at an October 2012 Board hearing. Specifically, upon receiving two checks, the Veteran testified that he immediately called the VA office, described the checks and the two different numbers under which they were issue, and inquired about the accuracy of the two payments. The VA office told him not to "worry" and that he was, in fact, entitled to both checks. VA continued to send him two checks in spite of his repeated inquiries to the VA office. Because the Veteran had also applied for disability benefits under 38 U.S.C.A. § 1151 around the same time he applied for NSC benefits, it was his belief that the two checks were possibly being issued for two, different purposes - i.e., one check for pension and another check for disability. At one point, the Veteran even returned the checks via registered mail to the two different VA facilities from which they were issued, but the letters were returned to him. Again, despite the Veteran's persistent and honest attempts to reconcile the two checks, VA repeatedly informed the Veteran that he was entitled to such payments, and his efforts to return the checks via registered mail proved fruitless. It is based upon these facts that the Veteran claims that the overpayment was due to sole administrative error. 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 Veteran neither had knowledge of nor should have been aware of the erroneous award. Further, neither the Veteran'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); 38 C.F.R. § 3.500(b)(2) (2012); 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 United States Court of Appeals for Veterans Claims (Veterans 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 this case, the Veteran was clearly not legally entitled to two NSC pensions. However, based on the uncontroverted actions of VA, and further considering the Veteran's credible testimony concerning the circumstances surrounding the issuance of the duplicative payments, the Board finds that the overpayment was solely due to administrative error by VA. As an initial matter, the Board notes that VA inexplicably issued two checks, for the same VA benefit, under two different numbers (i.e., one check under the Veteran's social security number and another check under the claim number which VA had created for him). It is through no fault of the Veteran that duplicate pensions were issued in this manner; nor should the Veteran be penalized for VA's inability to cross check or otherwise ensure that only one check per benefit/per Veteran is issued. Further, there is no evidence that the Veteran had knowledge of, or should have been aware of the erroneous pension award. Indeed, the Veteran reported that he appropriately contacted VA upon initial receipt of the checks and was informed by the VA office (on more than one occasion) that he was "entitled" to such benefits. It was not until after he confirmed entitlement with the VA office that he cashed the checks. With this in mind, the Veteran could not be expected to know that the benefits were erroneous if, in fact, the issuing authority continued to inform him otherwise. Again, the Veteran has presented credible testimony to this effect, and there is no reason for the Board to doubt the veracity of his statements. Based on the foregoing then, it cannot be said the Veteran had knowledge of the erroneous payments. Moreover, as the Veteran contacted VA on several occasions to inform them of the checks and to confirm that the payments were accurate, it also cannot be said that his actions (or failure to act) contributed to the overpayment. In sum, the Board finds that the duplicative NSC pension benefit payments were the sole result of administrative error by VA and that Veteran neither had knowledge of nor should have been aware of the erroneous award. Further, neither the Veteran's actions nor his or her failure to act contributed to payment pursuant to the erroneous award. See Jordan. The debt of $19,672.00 was solely the product of administrative error. The debt was therefore not validly created. 38 C.F.R. § 1.911(c). In the absence of a validly created debt, consideration of whether the requirements of a waiver of such debt have been met is not necessary. The Board concludes that discussion of a waiver is moot. Statutory Bars to Waiver of Recovery of Overpayment As a final matter, under 38 U.S.C.A. § 5302(c); 38 C.F.R. § 1.963, a finding of fraud, misrepresentation, or bad faith precludes waiver of recovery of an overpayment. The Committee's February 2008 waiver denial concluded that the facts in this case did not show the presence of fraud, misrepresentation, or bad faith. The Board concurs with the Committee's conclusion regarding the absence of fraud, misrepresentation, or bad faith in this case. As explained above, the Veteran appropriately notified VA regarding the duplicative payments and his subsequent actions (or non-action) were not intentional acts that would constitute one of the statutory bars to recovery. Accordingly, there is no statutory bar to waiver of recovery of the improperly created overpayment of $19,672.00. ORDER The overpayment of VA nonservice-connected pension benefits in the amount of $19,672.00 was not properly created and is thus invalid. ____________________________________________ DEBORAH W. SINGLETON Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs