Citation Nr: 1309034 Decision Date: 03/18/13 Archive Date: 03/25/13 DOCKET NO. 10-27 100 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Buffalo, New York THE ISSUE Entitlement to waiver of recovery of an overpayment of nonservice-connected pension benefits in the calculated amount of $10,528.27, to include whether the debt resulting from the overpayment was properly created. WITNESS AT HEARING ON APPEAL The Veteran ATTORNEY FOR THE BOARD Tiffany Berry, Associate Counsel INTRODUCTION The Veteran had active military service from November 1970 to October 1972. This appeal to the Board of Veterans' Appeals (Board) arises from a November 2009 decision of the Committee on Waivers and Compromises (COWAC) at a Department of Veterans Affairs (VA) Regional Office (RO) that denied entitlement to a waiver. The Board notes the Veteran resides within the jurisdiction of the Buffalo, New York RO, but that the Pension Management Center of the VA Regional Office in Philadelphia, Pennsylvania appears to be the office addressing his pension benefits. The Veteran presented testimony at a video conference hearing before the undersigned Veterans Law Judge in May 2012. A copy of the transcript has been associated with the claims file. The Board notes that, in addition to the paper claims file, there is a paperless, electronic claims file associated with the Veteran's claims. A review of the documents in such file reveals that they are either duplicative of the evidence in the paper claims file or are irrelevant to the issues on appeal. The appeal is REMANDED to the RO via the Appeals Management Center (AMC), in Washington, DC. VA will notify the appellant if further action is required. REMAND A review of the record indicates that the debt at issue in this case was created as a result of the Veteran's incarceration after conviction of a felony. Under 38 C.F.R. § 3.666, if any individual to or for whom nonservice-connected pension is being paid under a public or private law administered by VA is imprisoned in a Federal, State, or local penal institution as the result of conviction of a felony or misdemeanor, such pension payments will be discontinued effective on the 61st day of imprisonment following conviction. 38 U.S.C.A. § 5313 (West 2002). The Veteran has appealed the denial of a waiver of recovery of the debt of $10,528.27 due to overpayment of VA nonservice-connected pension benefits. The debt at issue stems from his incarceration from April 17, 2007 to March 3, 2008, during which he continued to receive his nonservice-connected pension benefits. Upon learning of the Veteran's incarceration, the RO notified the Veteran via letter dated in July 2008 that his nonservice-connected pension benefits would be discontinued. He was also notified that because he had a service-connected disability rated at 10 percent, he would be paid compensation at half the 10 percent rate in accordance with 38 U.S.C.A. § 5313. See 38 C.F.R. § 3.665 (veterans rated 10 percent disabled for compensation purposes shall receive one-half the rate of compensation payable). He was notified that he had 60 days to submit evidence contesting the reduction. In December 2008, after he had failed to submit any evidence contesting the reduction, the RO reduced his benefits effective June 17, 2007. In January 2009, in response, he submitted a statement requesting a waiver and indicating that he disputed the amount of the debt owed. In November 2009, his request for waiver of recovery of this indebtedness was denied, and the Veteran filed a timely appeal. On a May 2010 VA Form 9, the Veteran asked why his children were not given an apportionment of his benefits while he was incarcerated and why that factor was not taken into consideration in the creation of the debt. In Schaper v. Derwinski, 1 Vet. App. 430 (1991), the United States Court of Appeals for Veterans Claims (Court) held that, before a claim for waiver of an overpayment may be adjudicated, the matter of whether the overpayment was properly created must first be addressed if the appellant asserts the invalidity of the debt. The issue of whether the overpayment was validly created is inextricably intertwined with the issue of whether the Veteran is entitled to a waiver of an overpayment in the amount of $10,528.27. While the record includes some indication that the Veteran's challenge to the validity of the debt was acknowledged by VA personnel at the RO and/or the VA Pension Management Center, there does not appear to be any actual adjudication of that question in the statement of the cases or a supplemental statement of the case. As such, the Board finds that the validity of the debt matter must be adjudicated prior to appellate review. See Harris v. Derwinski, 1 Vet. App. 180 (1991). Additionally, there is a January 2011 letter in the file noting indebtedness in the amount of $12,203.11. It appears from the record that this may represent a different overpayment that has been created as a result of a change in reported income, but this is unclear from the record. Likewise, the Veteran expressed confusion during his hearing as to the actual amount of the debt on appeal. Clarification should be provided. Accordingly, the case is REMANDED for the following action: 1. The RO/AMC should prepare an audit of the Veteran's benefits paid and due, clearly setting forth the time period of the overpayment at issue to include the month and year when the overpayment began and the month and year when it ended. The total amount of the overpayment should be indicated in the audit. Associate the audit report with the claims folder, and send a copy to the Veteran. 2. After completion of the above, and any other development deemed necessary, adjudicate the issue of the validity of the debt and then readjudicate the issue of entitlement to waiver of compensation overpayment on appeal. In doing so, the RO/AMC should: a. Clarify whether the January 2011 letter advising the Veteran of a $12,203.11 represents a matter separate from the indebtedness arising from the Veteran's incarceration; and b. Address the Veteran's argument concerning whether an apportionment of his nonservice-connected pension benefits should have been made during his incarceration, which could thereby reduce the amount of his overpayment. If the appeal remains denied, the Veteran should be furnished an appropriate supplemental statement of the case and afforded an opportunity to respond. The case should then be returned to the Board, 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. 2012). _________________________________________________ K. A. BANFIELD 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) (2012).