Citation Nr: 1314207 Decision Date: 04/30/13 Archive Date: 05/15/13 DOCKET NO. 10-43 531 ) DATE ) ) On appeal from the Department of Veterans Affairs Regional Office in St. Louis, Missouri THE ISSUE Whether a debt for overpayment of nonservice-connected pension benefits was properly created. REPRESENTATION Appellant represented by: Veterans of Foreign Wars of the United States WITNESS AT HEARING ON APPEAL The Veteran ATTORNEY FOR THE BOARD W.T. Snyder, Counsel INTRODUCTION The Veteran had active service in the U.S. Navy from September 1974 to July 1977. At the outset, the Board notes that the claims file does not specify the exact amount of the overpayment calculated by the RO- however, the absence of this figure does not preclude analysis as to the debt's validity and thus there is no prejudice to the Veteran in adjudicating the matter at this time. This appeal to the Board of Veterans' Appeals (Board) arose from a December 2009 letter notice by letter the Department of Veterans Affairs (VA) Pension Management Center (Center) at Milwaukee, Wisconsin, that informed the Veteran he had received an overpayment of VA pension benefits, effective May 2009. The Board notes that while the Center issued the initial action and has provided various appellate documents to the Veteran, the Regional Office (RO) in St. Louis, Missouri, is the Veteran's servicing office based on where he resides. In August 2011, the Veteran proffered testimony before the undersigned Veterans Law Judge (VLJ) at the RO in St. Louis. A transcript of that hearing is in the claims folder and has been reviewed. The United States Court of Appeals for Veterans Claims (Court) has interpreted the provisions of 38 C.F.R. § 3.103(c)(2) (2012) as imposing two distinct duties on VA employees, including Board personnel, in conducting hearings: the duty to explain fully the issues and the duty to suggest the submission of evidence that may have been overlooked. Bryant v. Shinseki, 23 Vet. App. 488 (2010) (per curiam). At the hearing, the issue was identified, and the undersigned ensured that the Veteran was aware that application for a waiver of indebtedness was a separate issue which was not before the undersigned. As noted later, that issue is referred to the Agency of Original Jurisdiction (AOJ). Hence, the Board finds Bryant was complied with. The issue of entitlement to waiver of recovery of overpayment of VA pension benefits has been raised by the record, but has not been adjudicated by the AOJ. Therefore, the Board does not have jurisdiction over it, and it is referred to the AOJ for appropriate action. FINDINGS OF FACT 1. The Veteran has been notified of an overpayment of pension benefits. 2. The preponderance of the evidence shows VA does not bear sole responsibility for creation of the overpayment. CONCLUSION OF LAW An overpayment of pension benefits was not due to VA's administrative error. The debt is valid. 38 U.S.C.A. §§ 5112, 5302 (West 2002); 38 C.F.R. §§ 1.911, 1.962, 3.271, 3.273, 3.500 (2012). REASONS AND BASES FOR FINDINGS AND CONCLUSION Veteran's Claims Assistance Act of 2000 (VCAA) The VCAA describes VA's duty to notify and assist claimants in substantiating a claim for VA benefits. 38 U.S.C.A. §§ 5100, 5102, 5103, 5103A, 5107, 5126 (West 2002 & Supp. 2012); 38 C.F.R. §§ 3.102, 3.156(a), 3.159, 3.326(a). The Board notes the VCAA is not applicable to claims such as the one decided herein. Cf. Barger v. Principi, 16 Vet. App. 132 (2002). In Barger, the Court held that the VCAA, with its expanded duties to notify and assist, is not applicable to cases involving the waiver of recovery of overpayment claims, pointing out that the statute at issue in such cases was not found in Title 38, United States Code, Chapter 51 (i.e., the laws changed by VCAA). As well, the statute at issue in this case is not found in Chapter 51 (rather, in Chapter 35). Applicable Law and Regulation An overpayment is created when VA determines that a beneficiary or payee has received monetary benefits to which he or she is not entitled. See 38 U.S.C.A. § 5302; 38 C.F.R. § 1.962. Applicable to pension benefits, the monthly rate of pension payable to a beneficiary shall be computed by reducing the beneficiary's applicable maximum pension rate by the beneficiary's countable income, which includes compensation paid by the Social Security Administration (SSA). 38 C.F.R. §§ 3.271(g), 3.273. Thus, the preliminary determination in this appeal concerns the validity of the debt. See Schaper v. Derwinski, 1 Vet. App. 430 (1991). A debtor may dispute the amount or existence of a debt, which is a right that may be exercised separately from a request for waiver or at the same time. See 38 C.F.R. § 1.911(c)(1); see also VAOPGCPREC 6-98. The propriety and amount of the overpayment at issue are matters that are integral to a waiver determination. See Schaper, 1 Vet. App. at 434. In order for the Board to determine that an overpayment was not properly created, thereby invalidating the debt, the record must establish the Veteran was legally entitled to the benefits in question or, if he was not legally entitled, then it must be shown that VA was solely responsible for the Veteran being erroneously paid pension benefits. 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. 27,757 (1990). Sole administrative error connotes the Veteran neither had knowledge of nor should have been aware of the erroneous award. Further, neither the Veteran's actions nor his failure to act must have contributed to payment pursuant to the erroneous award. 38 U.S.C.A. § 5112(b) (9), (10); 38 C.F.R. § 3.500(b)(2); 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 Court explained 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 other words, if a debt is the result solely of administrative error, the effective date of the reduction of benefits is the date of the last payment based on this error and, consequently, there would be no overpayment charged to the Veteran for an overpayment attributable to administrative error. 38 U.S.C.A. § 5112(b)(10); 38 C.F.R. § 3.500(b). Analysis There is no dispute in this case as to the salient facts. A November 2008 rating decision granted the Veteran a nonservice-connected pension, effective in February 2008. His monthly VA benefit was $931.00 per month, which was increased to $985.00 effective December 2008. A December 2008 letter from the Social Security Administration (SSA) informed the Veteran that he was awarded SSI benefits, effective July 2007. As of December 31, 2008, however, the Veteran was switched from SSI to SSB. The Veteran's initial SSB monthly benefit was $927.00 per month. The copy of the letter in the claims file reflects the RO received a copy in January 2009. In mid-January 2009, the Veteran informed the RO, via letter, of his SSB, and that it was his understanding he was only entitled to the difference between his SSB and his VA benefit, which was $58.00 per month ($985.00-$927.00). He requested confirmation from the RO. The Veteran wrote "VOID" on the face of his December 2008 check and returned it with the letter. A June 2009 Deferred Rating Decision references notice from SSA that the Veteran had switched from SSI to SSB and the check the Veteran returned. A copy of a computer share screen reflects that the Veteran had received a retroactive payment from SSA of $24,484.11, and appropriate action was required. A September 2009 Center letter informed the Veteran that his monthly pension benefit was reduced to $58.00, effective January 1, 2009; and, effective May 1, 2009, he no longer was entitled to VA pension benefits because the amount of his annual SSB benefits, $24,484.00, exceeded the maximum allowable income of $11,830.00. The Veteran has no argument with the fact he was no longer entitled to VA pension benefits, resulting in an overpayment. However, as indicated in his notice of disagreement (NOD), he believes that he should only be responsible for pension payments received after the September 2009 letter alerting him of the overpayment. As the Veteran explained in his January 2009 letter, the local VA office instructed him to send the letter and the check. In his NOD, however, the Veteran stated, "from the rumors I had heard," he was only supposed to keep the difference between his VA and SSB payments, so he returned the check in January. After he continued to receive a VA check, however, he concluded that his belief that he was only entitled to the difference between SSB and VA benefits had been mistaken. It was not until he received the September 2009 Center letter that he knew for certain he was not entitled to his pension checks. On his Substantive Appeal (VA Form 9), the Veteran asserted that he called VA and was told he could keep both; he called back and was told he could keep the difference; and, in another telephone call to the RO, he was told he could keep both, and he was to disregard anything else. The Veteran asserted that a VA counselor told him what to do. At the hearing, the Veteran identified his information source as a service representative organization (SRO). See Transcript, p. 3. Thus it was the SRO that provided varying answers to his inquiry. The Veteran did not indicate in his testimony that RO representatives gave him conflicting information. The remainder of the Veteran's testimony primarily related to the issue of a waiver of indebtedness rather than the validity of the debt. In the process of making certain that the Veteran understood the difference between the issue of validity and waiver, and his basis for his claim of validity, the undersigned summarized the Veteran's position, stating that he had acted on a lot of different information and had chosen what seemed to him the most logical solution. The Veteran agreed with that characterization by again referencing his January 2009 letter. Id., at pp. 9-10. As noted earlier, VA had notice of the Veteran's initial SSA award in January 2009. Nonetheless, the Veteran was also aware that the amount of his pension benefits would change; and, to his credit, he took appropriate action to inform VA. Sole administrative error, however, entails no knowledge or fault on the part of the debtor. See Jordan, 10 Vet. App. 171. Further, the Veteran's actions after his January 2009 letter do not support his appeal. The Veteran's SSA benefits changed significantly as of May 2009. Nevertheless, he did not indicate in his NOD, Form 9, or his hearing testimony, when SSA may have notified him of the lump sum payment of $24,484.11. It was that payment, prorated over a 12-month period, that ended his entitlement to VA pension benefits of any amount. The June 2009 Deferred rating decision noted the lump sum payment, which indicates that SSA had already awarded it. The Board must infer the Veteran also knew of it. The Board is constrained to find that a reasonable person would have entertained significant doubt as to continued entitlement to VA pension benefits after receipt of such an increase of SSA benefits. Id. Thus, the Board also finds VA was not solely responsible for the overpayment. The elapsed time between VA's receipt of notice in January 2009 and its response in September 2009 does not change the fact the Veteran had knowledge, nor does it mitigate his responsibility. In light of the above, the Board finds the creation of the overpayment was valid. In so finding, the Board makes no determination as to whether such overpayment should be waived. Again, the question of waiver of overpayment has not been adjudicated by the AOJ, and is not in appellate status at this time. Rather, such is being referred back for appropriate action. (CONTINUED ON NEXT PAGE) ORDER The overpayment of nonservice-connected pension benefits is valid, and the appeal is denied. ____________________________________________ ERIC S. LEBOFF Veterans Law Judge, Board of Veterans' Appeals Department of Veterans Affairs