Citation Nr: 1310813 Decision Date: 04/02/13 Archive Date: 04/11/13 DOCKET NO. 10-49 159 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office and Insurance Center in Philadelphia, Pennsylvania THE ISSUE Entitlement to waiver of recovery of nonservice-connected disability pension benefit overpayment in the calculated amount of $28,859.00, to include whether the overpayment was validly created. REPRESENTATION Appellant represented by: Massachusetts Department of Veterans Services ATTORNEY FOR THE BOARD J. M. Kirby, Counsel INTRODUCTION The Veteran served on active duty from October 1991 to March 1994, including service in the Southwest Asia theater of operations. This matter comes before the Board of Veterans' Appeals (Board) on appeal from the Department of Veterans Affairs (VA) Regional Office (RO) and Insurance Center in Philadelphia, Pennsylvania. FINDINGS OF FACT 1. An April 2006 rating decision granted entitlement to nonservice-connected disability pension, effective from February 7, 2006. 2. VA received notice in March 2007 that the Veteran had been in receipt of Social Security Administration (SSA) benefits effective December 2004. 3. In October 2006, VA notified the Veteran that the July 2006 proposal of an overpayment in the amount of $28,859.00 had been promulgated. 4. The overpayment was created because the Veteran did not report the existence or amount of his SSA benefits, despite being informed that he was required to report any change in income, and that an overpayment would likely result from failure to do so. 5. While the overpayment resulted in unjust enrichment of the Veteran, denying his request for a waiver would result in both undue hardship, and defeat the purpose of the benefit. CONCLUSIONS OF LAW 1. The overpayment in the amount of $28,859.00 was validly created. 38 U.S.C.A. § 3562 (West 2002); 38 C.F.R. § 3.667 (2012). 2. The criteria for waiver of recovery of the overpayment of VA nonservice-connected disability pension benefits, in the calculated amount of $28,859.00, have been met. 38 U.S.C.A. § 5302 (West 2002); 38 C.F.R. § 1.965(b) (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSIONS The Board has considered VA's duty to inform the Veteran of the evidence needed to substantiate his claim and to assist him in obtaining the relevant evidence. However, the United States Court of Appeals for Veterans Claims (Court) has held that those provisions pertaining to VA's duties to notify and to assist do not apply to Chapter 53 of Title 38 of the United States Code, and questions pertaining to the waiver of recovery of an indebtedness due VA. Barger v. Principi, 16 Vet. App. 132, 138 (2002). Therefore, the Board will not address whether VA's duties to notify and to assist have been satisfied in this case. Validity of Overpayment The purpose of VA pension benefits is to provide a subsistence income for veterans of a period of war who are totally disabled, and who are otherwise unable to maintain a basic, minimal income level. Pension benefits are based upon total family income and the amount of pension benefits is adjusted based upon the number of dependents the veteran supports. Recipients of pension income are required to report any changes in income and number or status of their dependents in a timely fashion. 38 U.S.C.A. §§ 1521, 1522 (West 2002). In determining income for the purposes of nonservice-connected pension benefits, payments of any kind from any source shall be counted as income during the 12-month annualization period in which received unless specifically excluded by 38 C.F.R. § 3.272 (2012). See 38 C.F.R. § 3.271(a) (2012). A veteran who is receiving a pension must notify VA of any material change or expected change in income which 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). The Veteran's original claim for nonservice-connected pension was received by VA in February 2006; therein, he noted that he received no income from the Social Security Administration (SSA). The April 2006 rating decision awarded nonservice-connected pension benefits. In the accompanying April 2006 letter, the Veteran was notified that his VA pension was directly related to his income, and that he must notify VA immediately if his income changed. SSA benefit income was specifically identified as being relevant income. In March 2007, VA received notice from SSA that the Veteran had been in receipt of SSA benefits effective June 2005. In July 2008, VA notified the Veteran that it proposed to terminate his VA pension benefit, effective February 2006. In October 2008, the Veteran was notified that the proposed action had been taken, and was notified of the overpayment. After consideration of the record and the applicable regulatory provisions, the Board finds that the Veteran did not timely report his SSA benefits and did so with knowledge of the likely consequences, and with resulting loss to the government. As noted above, the Veteran was instructed to report income and any changes in income, and advised that his pension award was based on income, including that which he may receive from SSA. It does appear, based on VA's February 2006 and October 2006 inquiries to SSA, that the Veteran's SSA benefits may not have been awarded until after his VA benefits were awarded, and thus that the Veteran was not misrepresenting his SSA income amount in his February 2006 claim. However, he did not notify VA about the increase in his income when the SSA benefits were awarded, and continued to receive benefits from both agencies. Indeed, the first time the Veteran informed VA of his SSA benefits was in the November 2008 Financial Status Report, when he requested a waiver of the created overpayment, which was more than 18 months after VA had learned of his SSA benefits award. His failure to report the receipt of SSA benefits was the direct cause of the overpayment of VA benefits. The Board has considered, but does not accept, the Veteran's assertion in his July 2010 notice of disagreement that he was not fully informed of the criteria used to determine his benefit payment or of his rights and responsibilities to be eligible to receive pension benefits. The April 2006 notice letter that accompanied the rating decision granting nonservice-connected pension benefits indicates, as enumerated above, both that the pension was based on income and that any change in income should be reported. To the extent that the Veteran asserts that VA must provide documentation of a certified letter advising him of his obligations with respect to reporting a change in income, there is no such requirement for VA to deliver notice of such requirements in the form of a certified letter, only that it be mailed to the claimant at the last known address of record. Review of the claims file does not establish that this letter was not delivered to the Veteran at the address on record; "[t]here is a presumption of regularity under which it is presumed that government officials 'have properly discharged their official duties.'" Ashley v. Derwinski, 2 Vet. App. 307, 308 (1992) (quoting United States v. Chem. Found., Inc., 272 U.S. 1, 14-15, 47 S. Ct. 1, 71 L. Ed. 131 (1926)). To rebut the presumption, the appellant, not VA, in addition to asserting non-receipt, bears the burden of producing clear evidence that VA did not follow its regular mailing practices or that its practices were not regular. See Ashley, 2 Vet. App. at 309. Absent such clear evidence, which the Veteran has not submitted, timely delivery is assumed. The Board has also considered, and does not accept, the Veteran's assertion in his November 2008 request for waiver that he did not know that he could not collect VA and SSA benefits simultaneously, and that since the SSA was aware of his VA benefits and still paid him SSA benefits, he assumed that VA was also aware of the simultaneous payments being that they are both government agencies. Again, however, the April 2006 letter specifically indicated that if the Veteran's income were to change, to include through benefits from the Social Security Administration, he was to notify VA. He did not do so until after the overpayment was created and he desired a waiver of that overpayment. On these bases, the Board finds that the overpayment in question was validly created. Waiver A waiver of indebtedness may be authorized in a case in which collection of the debt would be against equity and good conscience. 38 U.S.C.A. § 5302(b). In essence, equity and good conscience means fairness to both the veteran and to the government. 38 C.F.R. § 1.965(a) (2012). Under the regulation, equity and good conscience involves a variety of elements: (1) fault of the debtor, (2) balancing of the faults, (3) undue hardship, (4) whether recovery would defeat the purpose of the benefit, (5) unjust enrichment, and (6) changing position to one's detriment. 38 C.F.R. § 1.965. The list of elements is not all-inclusive. See Ridings v. Brown, 6 Vet. App. 544, 546 (1994). The law also precludes waiver of recovery of an overpayment or waiver of collection of any indebtedness where any one of the following elements is found to exist: (1) fraud; (2) misrepresentation; or (3) bad faith. 38 U.S.C.A. § 5302(c) (West 2002); 38 C.F.R. § 1.965(b). Only one of three elements (fraud, misrepresentation, or bad faith) need be shown to preclude consideration of waiver of recovery of the indebtedness. 38 U.S.C.A. § 5302(c). The Veteran's November 2008 request for a waiver of his overpayment was denied in September 2009. The Veteran filed a notice of disagreement in July 2010, citing financial hardship. In the October 2010 Statement of the Case, the Committee on Waivers and Compromises concluded that the Veteran's failure to notify VA of his receipt of SSA benefits while simultaneously receiving VA benefits constituted unjust enrichment and that a waiver could not be granted. The Veteran perfected his appeal in December 2010, stating that with the debt intercepted through his SSA disability benefits, his net income was approximately $750.00 per month, which in light of his unemployability was insufficient with which to pay rent and other monthly expenses. After review of the evidence of record, there are elements both in favor and against granting a waiver of the validly created overpayment. The Board agrees with the Committee on Waivers and Compromises that the Veteran's failure to notify VA of his receipt of SSA benefits while simultaneously receiving VA benefits constituted unjust enrichment. This is especially the case considering the above discussion as to the notice the Veteran received as to his duty to report a change in income to VA, as well as the total amount of the overpayment: $28,859.00. However, it would be against equity and good conscience to require this particular Veteran to repay the amount of the overpayment. The record reflects that, for pension purposes only, the Veteran's acquired psychiatric disability has been rated as 70 percent disabling, which suggests a significant level of social and occupational impairment. See 38 C.F.R. § 4.130; see also American Psychiatric Association's DIAGNOSTIC AND STATISTICAL MANUAL OF MENTAL DISORDERS, 4th Edition (1994) (DSM-IV). Similarly, that the SSA also found the Veteran's degree of employability to warrant disability benefits also speaks to what would likely be an inability for the Veteran to provide for himself during the period in which his VA benefits would be recouped due to the overpayment. Ultimately, the Board finds that while the overpayment resulted in unjust enrichment of the Veteran, denying his request for a waiver would result in both undue hardship, and defeat the purpose of the benefit, which in this case is to provide a certain level of financial support to a veteran whose disabilities preclude him from being able to remain financially self-sufficient. Accordingly, waiver of the validly created overpayment in the amount of $28,859.00 is warranted. ORDER Waiver of recovery of overpayment of nonservice-connected pension, in the amount of $28,859.00, is granted. ____________________________________________ STEVEN D. REISS Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs