Citation Nr: 1314481	
Decision Date: 05/02/13    Archive Date: 05/15/13

DOCKET NO.  11-19 976	)	DATE
	)
	)

On appeal from the
Department of Veterans Affairs Regional Office in Cleveland, Ohio


THE ISSUE

Entitlement to a waiver of recovery of overpayment of education benefits in the amount of $3,000.


REPRESENTATION

Appellant represented by:	Disabled American Veterans


WITNESS AT HEARING ON APPEAL

The Veteran


ATTORNEY FOR THE BOARD

M. Mills, Associate Counsel


INTRODUCTION

The Veteran served on active duty from October 1972 to July 1974.

This matter comes to the Board of Veterans' Appeals (Board) on appeal from a June 2010 decision of the Committee on Waivers and Compromises of the Department of Veterans Affairs (VA) Regional Office (RO) in Muskogee, Oklahoma, which determined that the Veteran was not entitled to a waiver of recovery of overpayment of $3,000.00 in VA benefits.  

The Veteran provided testimony at a February 2012 hearing before the undersigned Veterans Law Judge.  A transcript of the hearing is associated with the claims file.

A review of the Virtual VA paperless claims processing system does not reveal any additional documents pertinent to the present appeal.


FINDINGS OF FACT

1.  There is no indication of fraud, misrepresentation, or bad faith on the part of the Veteran in matters involving creation of the debt at issue in this matter.

2.  Recovery of the advance payment in the amount of $3,000.00 would not be against equity and good conscience and a failure to collect advance payment would result in unjust enrichment.


CONCLUSION OF LAW

Recovery of the advance payment of educational assistance benefits in the amount of $3,000 would not be against equity and good conscience. 38 U.S.C.A. § 5107, 5302 (West 2002); 38 C.F.R. §§ 1.962, 1.963, 1.965, 3.102 (2012).

REASONS AND BASES FOR FINDINGS AND CONCLUSION

The Veterans Claims Assistance Act of 2000 (VCAA), Pub. L. No. 106-475, 114 Stat. 2096 (2000), defines the obligations of VA with respect to the duty to assist and includes an enhanced duty to notify a claimant as to the information and evidence necessary to substantiate a claim for VA benefits.  

First, VA has a duty to notify the Veteran of any information and evidence needed to substantiate and complete a claim.  38 U.S.C.A. §§ 5102, 5103 (West 2002); 38 C.F.R. § 3.159(b).  Second, VA has a duty to assist the Veteran in obtaining evidence necessary to substantiate a claim.  38 U.S.C.A. § 5103A (West 2002); 38 C.F.R. § 3.159(c).  

However, the Court of Appeals for Veterans Claims (Court) has held that the notice and duty-to-assist provisions of the Veterans Claims Assistance Act of 2000 do not apply to claims for waiver of recovery of overpayment.  See Barger v. Principi, 16 Vet. App. 132 (2002); see also Lueras v. Principi, 18 Vet. App. 435 (2004).

Notwithstanding the fact that the VCAA is not controlling in these matters, the Board observes that the RO has explained to the Veteran the bases for finding that he is not eligible for a waiver of recovery of overpayment.  It also afforded him a fair opportunity to present arguments and evidence in support of his request for waiver of overpayment.  Finally, the Board afforded the Veteran an opportunity to testify at a hearing in February 2012.   During the hearing, the undersigned Veterans Law Judge (VLJ) clarified the issue on appeal.  The actions of the VLJ supplement the requirements for fair development of the appeal and any related duties owed during a hearing. 38 C.F.R. § 1.911.  The claim may be fairly adjudicated on its merits.

Law and Regulations

Recovery of overpayment of any benefits made under laws administered by VA may be waived if there is no indication of fraud, misrepresentation, or bad faith on the part of the person or persons having an interest in obtaining the waiver. 38 U.S.C.A. § 5302(c); 38 C.F.R. § 1.963(a).  "Bad faith" is defined in VA regulations as "unfair or deceptive dealing by one who seeks to gain thereby at another's expense.  Thus, a debtor's conduct in connection with a debt arising from participation in a VA benefits/services program exhibits bad faith if such conduct, although not undertaken with actual fraudulent intent, is undertaken with intent to seek an unfair advantage, with knowledge of the likely consequences, and results in a loss to the government." 38 C.F.R. § 1.965(b).

If there is no indication of fraud, misrepresentation, or bad faith in the record, the indebtedness shall be waived if the recovery of the overpayment would be against equity and good conscience.  38 U.S.C.A. § 5301(a); 38 C.F.R. §§ 1.962, 1.965.

Consideration of equity and good conscience is intended to reach a result that is not unduly favorable or adverse to either the claimant or the Government.  It is intended to achieve a result that is fair.  38 C.F.R. § 1.965(a).  Six non-exclusive elements are set forth in the regulations that must be addressed to determine whether the facts and circumstances in a particular case dictate that collection of an overpayment would be against equity and good conscience.  The following six elements, which are not intended to be all-inclusive, consist of: (1) the fault of the debtor; (2) balancing of faults between the debtor and VA; (3) undue hardship of collection on the debtor; (4) a defeat of the purpose of an existing benefit to the veteran; (5) the unjust enrichment of the veteran; and (6) whether the veteran changed positions to his/her detriment in reliance upon a granted VA benefit. 38 U.S.C.A. § 5302; 38 C.F.R. § 1.965(a).  Each of the six elements must be addressed.  See Ridings v. Brown, 6 Vet. App. 544, 546 (1994).

The standard of proof to be applied in decisions on claims for veterans' benefits is set forth in 38 U.S.C.A. § 5107 (West 2002).  A veteran is entitled to the benefit of the doubt when there is an approximate balance of positive and negative evidence. See 38 C.F.R. § 3.102.  When a veteran seeks benefits and the evidence is in relative equipoise, the veteran prevails.  See Gilbert v. Derwinski, 1 Vet. App. 49 (1990).  The preponderance of the evidence must be against the claim for benefits to be denied.  See Alemany v. Brown, 9 Vet. App. 518 (1996).

Analysis

The Veteran has been charged with an overpayment of $3,000 for education benefits.  It has been noted that he was not enrolled in an educational program at the time he received the VA education benefits which resulted in the overpayment.

The RO indicates that in January 2010, the application for advance payment for VA education benefits was submitted through the Internet.  In January 2010, VA issued the advance payment for $3,000.  The VA established a debt for the advance payment, and the Debt Management Center issued a notification of debt letter in February 2010.

Upon notification, the Veteran provided a Financial Status Report in March 2010 with a request for a payment plan and for the overpayment to be waived.

In multiple statements, the Veteran has asserted that did not apply for VA education benefits, and that he was the victim of a scheme.  The Veteran has argued that he believed he was applying for $3,000 in "stimulus money."  The Veteran contends that an individual offered to help him apply for $3,000.00 in "stimulus money" in exchange for a $500 processing fee.  The Veteran provided the individual with his name, address, social security number, and branch of service.  The Veteran admits that he accepted the $3,000.  However, he contends that he was unaware that he was in receipt of an advance payment for VA education benefits until he received the February 2010 letter from the VA Debt Management Center.

In June 2010, the Committee on Waivers and Compromises found that the Veteran had acted in bad faith surrounding the circumstances involving the creation of the indebtedness of $3,000, and on these grounds denied the Veteran's request for a waiver of overpayment.

As noted above, the Veteran contends that he was unaware that the $3,000 in "stimulus money" was actually an advance payment for VA education benefits.  The Board finds his statements about his role in the creation of the debt to be credible.  The Board finds that there was no fraud, misrepresentation, or bad faith on the part of the Veteran in the creation of the overpayment, thus removing any legal impediment to the granting of a waiver in this matter.  Therefore, the pertinent inquiry here is whether the facts dictate that a waiver should be granted under the standard of "equity and good conscience."

In considering the equity and conscience elements, the Board finds that the fault of the debt is fully that of the Veteran.  While the Veteran contends that he was unaware he was receiving benefits that he was not entitled to receive, he has not challenged the validity of the debt or the amount of the debt.  Moreover, he has not provided persuasive arguments as to why recovery of the advance payment for education benefits would be against equity and good conscience. 

Collection of the advance payment would not defeat the purpose of an existing benefit to the Veteran because the purpose of paying VA education benefits is to provide educational assistance.  The Veteran was not enrolled in school during the time he received VA education benefits or at any point during the appeal.  There is no indication that the monetary benefits have been used in furtherance of academic pursuits.  Additionally, the Veteran has not claimed that he changed positions to his detriment in reliance upon the overpayment of the VA benefit.  Indeed, in a June 2010 statement, the Veteran indicated that he agreed to apply for the "stimulus money" because he already moved into a new apartment and could use the money.

The Veteran contends that repayment of the overpayment would cause undue financial hardship.  The Board has reviewed the Veteran's March 2010 Financial Status Report.  The Veteran reported that he is not working and his monthly income exceeds his monthly expenses by $84.  The Board emphasizes that after taking care of basic necessities such as shelter and food, the Veteran is expected to accord a debt to the VA.  Furthermore, the Board notes that the Veteran has offered to make partial payments to take care of his debt in monthly installments.  His statement indicates that while the payments may be difficult for the Veteran, that they remain feasible and do not constitute and undue hardship.  Given, the Veteran's current income and assets, the Board finds that the collection of $3,000 debt would not deprive him of the basic necessities of life.  

Finally, the element of equity and good conscience most applicable to collect the advancement of payment would result in unjust enrichment.  The Veteran consistently claimed that he was unaware that an application for VA education benefits was submitted on his behalf.  However, the Veteran accepted the payment.  Clearly, there is an element of fault for accepting funds for which he was not entitled.  His insistence that he did not know what he was doing and therefore should not have to repay the debt defies logic and is not an acceptable basis to waive recovery of the debt.  The failure of the Government to insist upon repayment of the assessed overpayment would, therefore, result in unjust enrichment of the Veteran.  

The Board's inquiry is not necessarily limited to the six factors discussed above.  However the record does not suggest other specific reasons for waiver of the charged indebtedness created by overpayment, nor has the Veteran or his representative identified any.  In totality, the Board finds that the denial of waiver of overpayment was proper.

The facts of this case do not demonstrate that recovery of the overpayment would be against the principles of equity and good conscience. 38 C.F.R. §§ 1.963, 1.965 (2012).  For these reasons, the Board finds that a preponderance of the evidence is against the Veteran's claim for a waiver of recovery of the overpayment of VA education benefits in the amount of $3,000.  Because the preponderance of the evidence is against the claim, the benefit of the doubt doctrine is not for application. See 38 U.S.C.A. § 5107; 38 C.F.R. § 3.102 (2012). 

ORDER

Waiver of recovery of an overpayment of VA benefits in the amount of $3,000 is denied.


____________________________________________
H. N. SCHWARTZ
Veterans Law Judge, Board of Veterans' Appeals

Department of Veterans Affairs