Citation Nr: 1309675 Decision Date: 03/22/13 Archive Date: 04/01/13 DOCKET NO. 09-02 145 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in Chicago, Illinois THE ISSUE Entitlement to waiver of overpayment of VA compensation benefits due to a change in the Veteran's marital status in the amount of $4,134.00. REPRESENTATION Appellant represented by: Illinois Department of Veterans Affairs ATTORNEY FOR THE BOARD T. Stephen Eckerman, Counsel INTRODUCTION The Veteran served on active duty from October 1961 to August 1962, and from August 1963 to July 1966. This matter comes before the Board of Veterans' Appeals (hereinafter Board) on appeal from an October 2006 determination by the Chicago, Illinois, Regional Office (RO), which determined that an overpayment of VA benefits in the amount of $4,134.00 was made to the Veteran due to a change in his marital status. FINDINGS OF FACT 1. As of 1976, the Veteran has been in receipt of VA disability compensation; a total rating on the basis of individual unemployability due to service-connected disability (TDIU) has been in effect since 1997. 2. On August 30, 2003, the Veteran's second wife ("B.") passed away; at the time the Veteran was in receipt of a dependency allowance for her. 3. On January 31, 2004, the Veteran married his third wife ("R."). 4. On February 1, 2006, the Veteran first notified VA of the death of his second wife (B.), and the marriage to his third wife (R.). 5. Between September 1, 2003 and March 2006, the Veteran was overpaid compensation benefits in the total amount of $4,134.00, based upon receipt of a dependency allowance for his second wife (B.). 6. The overpayment of VA pension benefits in the amount of $4,134.00 was not due to the Veteran's fraud, misrepresentation or bad faith. 7. The creation of the debt was due to fault on the part of the Veteran. 8. The collection of any portion of the debt would not constitute an undue hardship, would not be against equity and good conscience. CONCLUSION OF LAW Recovery of the overpayment of compensation benefits in the amount of $4,134.00 would not be against equity and good conscience. 38 U.S.C.A. §§ 5107, 5302 (West 2002 & Supp. 2011); 38 C.F.R. §§ 1.963, 1.965 (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSION The Veteran seeks waiver of recovery of an overpayment due to a change in his marital status in the amount of $4,134.00. He argues that he informed VA of the death of his second wife, and of his marriage to his third wife, "immediately" after he married his third wife (in January 2004). See Veteran's appeal (VA Form 9), received in January 2009. He argues that he provided VA with this information on more than one occasion. Id. The Veteran has been in receipt of disability benefits since 1976; a total rating on the basis of individual unemployability due to service-connected disability (TDIU) has been in effect since 1997. As of 2003, he was received an additional amount for his spouse "B," as a dependent. On February 1, 2006, the Veteran notified VA of the death of his second wife (B.), and the marriage to his third wife (R.). In March 2006, the Veteran was notified that an overpayment had been created, and that he would be notified of the amount of the overpayment. In May 2006, the Veteran was notified that an overpayment of $4,134.00 had been created. He was further notified that his benefits would be withheld effective August 2006 until the amount was recouped. In September 2006, the Veteran requested a waiver of the overpayment. In October 2006, the Committee on Waivers and Compromises (Committee) denied the Veteran's request for a waiver of recovery of the overpayment, which it was determined was for the period from September 1, 2003 to March 1, 2006, and that it amounted to $4,134.00. The Committee determined that there was no fraud, no misrepresentation of a material fact, and no showing of bad faith on the Veteran's part. However, the Veteran was determined to be significantly at fault in creation of the overpayment because he should have known to report all dependency changes in a timely manner. The Committee also noted that the Veteran had entered into a payment plan with VA's Debt Management Center in St. Paul. In December 2007, the RO notified the Veteran that it had denied his request for a waiver of recovery of the overpayment. The claims file includes Compensation and Pension award documents which provide the basis for the COWC's determination of the amount of the overpayment in issue, and the Board is satisfied that the debt was properly created. Therefore, that question need not be examined further. See Schaper v. Derwinski, 1 Vet. App. 430, 434 (1991). The remaining issue is whether the Veteran is entitled to waiver of recovery of the overpayment of disability benefits in the amount of $4,134.00. The Board notes that the Committee concluded that the appellant had not demonstrated fraud, misrepresentation, or bad faith in the creation of the overpayment now at issue. Notwithstanding this, however, the Board must render an independent determination on this issue. See Ridings v. Brown, 6 Vet. App. 544, 546 (1994). A party who is receiving pension must notify VA of any material change or expected change in income that would affect entitlement to receive, or the rate, of the benefit being paid. The notice must be made when the recipient acquires knowledge that he will begin to receive additional income. 38 C.F.R. § 3.660(a) (1) (2012). Overpayments created by retroactive discontinuance of an award are subject to recovery if recovery is not waived. Waiver of repayment of indebtedness is statutorily precluded if there is any indication of fraud, misrepresentation of a material fact, or bad faith on the part of the person having an interest in obtaining a waiver. 38 U.S.C.A. § 5302(c); 38 C.F.R. § 1.965(b). See Ridings v. Brown, 6 Vet. App. 544, 546 (1994) (citing 38 C.F.R. § 1.965 ). If the debtor's conduct is deemed not to have constituted fraud, misrepresentation of a material fact, or bad faith, the request for waiver will be evaluated pursuant to the principles of equity and good conscience found in 38 C.F.R. § 1.965(a). In applying the equity and good conscience standard to a case, the factors to be considered by the adjudicator are: (1) whether actions of the debtor contributed to the creation of the debt, (2) whether collection would deprive the debtor or the debtor's family of basic necessities, (3) whether recovery of the debt would nullify the objective for which benefits were intended, (4) whether failure to make restitution would result in unfair gain to the debtor, and (5) whether the debtor has changed position to his detriment due to his reliance upon receipt of VA benefits. Additionally, the adjudicator must conduct a "balancing of the faults," weighing the fault of the debtor against any fault attributable to the VA. 38 C.F.R § 1.965(a). Based on a review of the claims file and having considered the contentions of the Veteran, it is clear that the Veteran was at fault in the creation of the debt because of his failure to notify VA of a dependency change (the death of B.) in a timely manner. In this regard, although he has asserted that he notified VA of the death of B., and his marriage to R., on more than one occasion (to include doing so shortly after his marriage to R. in January 2004), there is no record of any such communication. Had any of these letters been received by VA, there is a "presumption of regularity" that they would have been marked as received, and then entered into the record. See Mindenhall v. Brown, 7 Vet. App. 271 (1994); Ashley v. Derwinksi, 2 Vet. App. 62, 64 (1992) (the "presumption of regularity" applies to the official acts of public officers, and in the absence of clear evidence to the contrary, it must be presumed that they have properly discharged their official duties). Since the overpayment at issue resulted solely from the Veteran's failure to notify VA promptly of a dependency change, and since he continued to receive VA disability benefits to which he knew, or should have known, that he was not entitled, there is no basis to conclude that his actions did not overwhelmingly contribute to the creation of the debt. No fault can be attributed to the VA with respect to the creation of the debt. The Board must next consider whether reliance on benefits resulted in relinquishment of a valuable right or the incurrence of a legal obligation. The Veteran has not contended, nor does the evidence show, that he had relinquished a valuable right or incurred a legal obligation in reliance on his VA benefits. Another factor to be considered is whether recovery of the overpayment would defeat the purpose for which the benefits are intended. The Board finds that recovery of the debt would not nullify the objective for which benefits were intended. The purpose of dependency benefits is to provide additional income to veterans who have dependents to assist with their cost of living. As the Veteran received additional income for someone who was no longer a dependent, he received income to which he was not entitled. Without the benefit of accurate and timely information, the VA is unable to determine whether a veteran has eligible dependents. Therefore, the Board finds that to recover the overpayment of such benefits does not nullify the objective of the payment, as the Veteran did not provide the information which was required to determine his entitlement to the benefits received. In addition, failure to make restitution would result in the Veteran's unjust enrichment by virtue of the fact that he has retained money to which he was not legally entitled. Finally, the Board must also consider whether recovery of the debt would result in financial hardship to the Veteran. In October 2006, the Veteran submitted a Financial Status Report (VA Form 5655). In that report, the Veteran indicated that he had not worked during the last two years, that he had no income other than $3,802.00 per month in VA benefits, that he was not married, and that he had no other dependents. He reported that he had $3,727.00 per month in expenses, to include monthly expenses of approximately $400.00 for food, $235.00 for utilities and heat, $1,024.00 for rent, and $2,068.00 in other expenses (not detailed). He indicated that he had real estate assets worth $105,000, a car worth $5,500, $900 in debts (which he was paying off at $200 per month), and no cash in the bank, or cash on hand. The Board finds that the collection of this overpayment has not subjected the Veteran to undue hardship. The aforementioned FSR, which shows that the Veteran's expenses and income are about the same, and although the Veteran claimed to have $2,068 in other monthly expenses, these were not otherwise detailed or itemized. The Board further notes that the COWC's October 2006 decision shows that it noted that the Veteran had entered into a payment plan with VA's Debt Management Center in St. Paul. The Board therefore finds that undue financial hardship would not be incurred by the Veteran. Because recovery of the overpayment of disability compensation does not result in any undue hardship to the Veteran, and the evidence of record does not show any reason why VA should not recover the overpayment, the Board concludes that recovery of the overpayment is not against equity and good conscience and there is no basis for allowance of a waiver in this case. See 38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. §§ 1.963, 1.965. It is recognized that the elements as discussed are not all inclusive; however, the Veteran has not advanced any other facts which would be of any significance in applying the equity and good conscience standard. Having considered all of the equities in this case, the Board concludes that waiver of recovery of the overpayment of disability benefits in the amount of $4,134.00 is not warranted. As the preponderance of the evidence is against the Veteran's claim, the benefit of the doubt doctrine does not apply. 38 U.S.C.A. § 5107(b) (West 2002). As a final matter, on November 9, 2000, the President signed into law the Veterans Claims Assistance Act of 2000 (VCAA), which redefined VA's duty to notify and to assist claimants for VA benefits. See 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5107, 5126 (West 2002); 38 C.F.R. §§ 3.102, 3.156, 3.159, and 3.326 (2012). However, the United States Court of Appeals for Veterans Claims (Court) has held that the notice and duty-to-assist provisions of the VCAA do not apply to claims for waiver of recovery of overpayments. Barger v. Principi, 16 Vet. App. 132 (2002). ORDER Waiver of the recovery of an overpayment of VA nonservice-connected pension benefits in the amount of $4,134.00 is denied. ____________________________________________ JONATHAN B. KRAMER Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs